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November 27, 2013 at 09:10 AM
Imagine your best client leaving — and, adding salt to the wound — not even for another advisor but for a robo-advisor.
Far-fetched? Stephanie Bogan, senior vice president with national financial planning firm United Capital, doesn’t think so.
In an interview with ThinkAdvisor, Bogan cites the example of Wealthfront, a software-based financial advisor, which had no clients over 50 a year ago, though 10% of its clientele today is in that demographic group.
“Everyone thinks my aging clients are immune from this [robo-advice]. But what this tells you is that people in their 50s aren’t even safe now,” Bogan says, who adds the cold comfort that clients in their 70s and 80s are probably not going to opt for online advice.
What Bogan is in essence warning about is a consumer revolution, based on technological innovation, that is overtaking the entire economy and will reach advisors’ seemingly safe harbor as well.
“When you think about what consumers want, think of the [online travel agent] Expedia for example,” she says. “They want things that are faster, better, customized, cheaper. That’s the world we’re living in.”
As the United Capital exec tasked with responsibility for the client experience and advisor training, Bogan has been at work fostering a responsive and interactive client environment whose purpose is to constantly remind clients of their advisors’ value proposition.
That is because advisors cannot take their clients’ appreciation for their advice for granted.
She tells of one advisor who had a client that was anxiously seeking to pull all his money out of the market in 2008-’09. The advisor stopped him from doing this. Then, just two months ago, that same client said to the advisor: “Remind me, why am I paying you $8,000 a year again?”
The advisor replied: “You’re paying me for the mistakes I didn’t make.”
Bogan says “the advice process is the piece that cannot be commoditized; it’s helping you make an unemotional decision.”
And United Capital is doing that — asserting its value proposition — while incorporating online interactivity to match contemporary consumers’ expectations for instant feedback.
“What does that mean for the average advisory firm? We’ve built a friendly interactive experience based on a process of gamification. Not in the sense that consumers’ lives are a game. But they want things that are engaging, fun and interactive,” she says.
“They don’t just want to look at quarterly financial reports. So we’ve evolved the client experience over the last five years so that when we sit with clients, we look at the choices they’ve made and they get a score.
