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Technology > Marketing Technology

Advisors and Technology: A Love-Hate Relationship

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The broker-dealer industry is going through a less-than-wonderful transition to a more automated and tech-connected world, according to many experts and insiders at TechLeaders 2013.

The annual conference, which ended Friday in the greater Dallas area and drew about 150 professionals, highlighted the multiple challenges faced by independent advisors and their broker-dealers in the face of rapidly changing technology, regulations and investor demands.

For one, there are generational issues at play.

Take social media. “As valuable as social media is for client relations and for keeping up with clients’ families and milestones, it probably won’t be fully embraced by financial advisors for another 20 years,” said Peter Montoya, the event’s executive producer, in an interview with AdvisorOne. “It’s an age issue, and as the younger advisors age, you will see its use grow.”

For some broker-dealers, social media seems to be little more than a headache. “Why do we have to make ‘em do it?” asked one IT executive during a roundtable discussion on Friday.

The answer, judging from a variety of responses in the crowd, seems to be that there is little choice. Montoya agrees.

“At the heart of this business are the client relationships,” said the Newport Beach, Calif.-based expert.  “Some advisors say that, when they are selling their businesses, they are selling their client assets. But it really comes down to their relationships.

The use of social media can help strengthen relationships with long-term clients, he notes. Plus, it can help advisors find prospects and build business with new clients.

“The model is not about cold calling anymore,” Montoya explained. “Now, it is social media. Again, it’s all about relationships.”

In terms of broker-dealers, “There was lots of pushback initially [to social media] because of compliance issues. But now we are seeing a shift as they come to grips with how to overcome these concerns, especially with webpages,” said David Lawrence, president of, a San Diego-based consulting firm, in an interview.

While there will always be exceptions, “I’m getting more latitude with the small guys, who are more nimble,” explains Lawrence, who that works with small and large broker-dealers. “Also, I see the big guys coming around—over time.”

Connecting the Dots

To improve the relationship between advisors and technology, staff members at broker-dealers need to sit down with advisors, according to the consultant, “and take them through the process of learning how to leverage social media in ways that will bring results.”

The same is true for advisors’ use of other IT tools, Lawrence adds, which can have a positive impact on advisors’ practice management and results.

“We are confronting the fact that advisors feel they already have too much work,” he noted. “And they don’t equate having a social media presence with real results. I’ve heard them say the same thing about websites.”

Sharing “hard” analysis (i.e., numbers) with advisors on how technology can improve their relationships and hence their business is critical.

“When we demonstrate the benefits [of technology tools like social media] and find ways for advisors to manage and maintain these entities, it’s a win-win for them,” Lawrence said.

Still, Montoya thinks it will be some time before social media and other technology is universally accepted.

“By and large, you can say that the tech-centric reps are doing more, while the balance of reps let their staff do it.”


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