Digital advice solutions have changed the game for financial advisors by making investment selection and portfolio construction more of a commodity than a differentiator. The successful practitioner of the future will focus on delivering more personalized financial advice to a larger client base. Rather than basing their business on a skill set that can be replicated by an algorithm, forward-thinking advisors are becoming more client-centric and focusing on building deeper and longer-lasting relationships.
While in science-fiction, technology is often portrayed as a cold and impersonal substitute for humanity, in reality, the key to providing a more personalized experience will require access to a fully-integrated technology platform.
As advisors shift their value proposition to meet the 21st century client’s need, they will demonstrate their value by providing advice not just on investments but on clients’ financial lives, which will impact a client’s ability to attain their long-term goals, building deep, personal and multi-generational relationships in the process. When advisors are able to automate the parts of their business that can be commoditized, they have more time to spend with current and prospective clients to share insights and craft unique solutions. The most beneficial role of technology in wealth management is to aid financial advisors and their staff in becoming more efficient.
An integrated technology platform that has data aggregation and analytics capabilities can greatly improve an advisor’s value proposition. Research conducted by the Aite Group found that independent registered investment advisors (RIAs) with aggregated data platforms not only have more time to devote to client-facing tasks, but also are able to complete over 50% more financial plans and have a 78% larger share of wallet compared to practices that have basic or no integration.
What Is Advanced Integration?
Advanced technology integration can most simply be described as making sure all your software and applications can talk to each other. It allows advisors to use a single sign-on to their core platform and share data bi-directionally with external partners as well as to access multiple business applications, such as customer relationship management (CRM) system, data aggregation capabilities and financial planning software.
Offering a highly-personalized experience and the ability to “be there” when clients need them most is virtually impossible for advisors without access to integrated technology solutions. Manually transferring data from one legacy system to another because the systems don’t speak the same language is highly inefficient, wasting time and exponentially increasing the possibility of error. Firms that are reluctant to invest in up-to-date technology often ignore the overhead costs of additional staff to complete the drudge work and the potential lost revenue from clients who were never brought on board.
The challenge for many advisory firms, once they make the commitment to upgrading their technology, is finding the right system for their business. Most advisory firms don’t have the technical proficiency in-house to mix and match applications to create their own unique platform and find a pre-integrated one a more hassle-free solution.