Schwab’s Hathi: What Clients Expect Now

Mobile changes the way we think and do business, and changes what consumers expect from the providers they do business with. Why wouldn’t it also change what clients expect from their advisors?

Anyone who has spent any length of time in an airport waiting area knows smartphones are ubiquitous, but in a session at Schwab Impact on Wednesday, Neesha Hathi, senior vice president of advisor technology solutions for Schwab, said it’s a mistake to assume they’re only using them for personal reasons. She referred to research from Spectrem Millionaire Corner that shows 93% of ultra high-net-worth clients use a mobile device to check their account balance or information, and 65% use it to research investments.

“We know that investors are already accessing and using the app for checking balances all the time,” Hathi said of the Schwab app, in an interview after her session. “What we’re seeing more interest in is their ability to transact, to approve.”

Schwab recently launched mobile electronic authorization, Hathi said. Research can be hard on a smartphone, but approving is easy. “We’re discovering use cases,” she said, “where you can take advantage of the fact that the investor has this device on them all the time.”

Hathi added that next year, Schwab will add checks and journals to the app’s capabilities.

Social media is another tool advisors might be misguided on. It’s not just for young investors, Hathi said. Yes, most social media users are young adults, but 65% of respondents surveyed by Pew 50 and 64 said they use social media, and 46% of those 65 or older use it.

Referrals are a great way for advisors to find clients, and always will be, but Hathi urged advisors to think about other ways to reach out to new clients. As an example she referred to online dating sites. Over 30% of married couples met through an online match site, Hathi said. “If they’re comfortable finding their spouse online, they’re probably OK” finding their advisor there, too, she said.

The testimonial rule makes referral sites more difficult for advisors, and while some firms have popped up that try to connect clients with advisors, “no one’s cracked that code,” Hathi said.

“The way the regulations are right now, advisors really are hamstrung with what they can do,” Hathi said. “One way that sites have tried is don’t have the advisor participate. Let it be away from the advisor and it’s just individuals, just like you provide commentary on a contract on Angie’s List, you comment on a restaurant on Yelp — use that away from the advisor. I think the fear advisors have about that is they lose control of the information. They don’t know if it’s going to be good reviews, bad reviews, but that’s one way this could proliferate because that way the advisor’s not involved in the testimonial.”

While use of testimonials is a gray area and open to interpretation, Hathi said, “It does seem like the regulators are aware that the ambiguity is causing problems. I think the hope is that by being aware, they’re going to dig in and try to figure out, ‘how do you make this a little more black and white?’ Hopefully they’ll take a look at the rest of the world around us and take that into account as they think about what kind of regulation makes the most sense.”

According to Schwab’s 2014 Investor Outlook Study, 60% of advisors are not considering adding 24/7 services to the offerings in the next two years. Hathi suggested this was likely due to a misconception about what providing around-the-clock service actually means. Many of those advisors are probably picturing themselves “on call” and receiving phone calls from clients at all hours of the night, she said.