Neesha Hathi, SVP of advisor technology solutions at Schwab. (Photo: Charles Schwab)

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.

“What they maybe are not thinking about is you can provide 24/7 service in an automated way, in a digital way and it’s still service,” she said. “If they’re traveling somewhere and they just want to know ‘How much cash do I have because I need to wire some money to my daughter?’ They don’t need to call you to figure that out, they just need to be able to get to your accessible portal, site, app, whatever, to get that service.”

Hathi said those advisors’ definition of service might rely more on human interaction than the more “modern definition” of giving people what they want. For example, “Amazon provides great service. When was the last time you talked to someone at Amazon?” she said. “I think there’s an evolution there in thinking.”

Furthermore, “Many of them are already providing 24/7 service. If they have a portal, they’re already providing some level of service any time, anywhere.”

In addition to trends that will affect advisors’ operations, Hathi also talked about how clients, and their expectations, are changing.

By 2020 — just five years from now, Hathi pointed out — women will control nearly $11 trillion, and 70% of the expected $16 trillion that will be transferred from one generation to the next will be handed over to women.

Clients will be more racially and culturally diverse, too, she said. One-third of American millionaires were born outside the United States.

“If you don’t have anyone in your firm who resembles another ethnic group or another background — half of our client firms don’t have a woman in an advisor or leadership role — that’s really going to be challenging,” Hathi said.

She pointed out that talent touches every aspect of an advisor’s business. “It’s not about women. It’s not about hispanic people, or African-Americans or Asians or whatever. It’s about creating a culture that’s inclusive and having diverse ideas and diverse thinking and diverse backgrounds and experiences.

“It’s hard because it often turns into this antagonistic, ‘we’re trying to raise this group up and take another one down.’ That’s not what this is about. If you want to have a firm that has a broad spectrum of ideas and that’s going to be able to serve the broadest spectrum of people, think about the people you have. You generally resemble the kind of population you serve.”

Hathi suggested advisors sit down and think about where they want their practice to be in five years and prioritize what they need to do to get there. She referred to Schwab Advisor Services head Bernie Clark’s advice during his session earlier in the day: “It’s not a revolution, it’s an evolution,” she said. Advisors can implement small changes that help them build a scalable client experience that fits their practice and their goals.

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