Back in the 1980s, when I was starting out, stock brokers had a secret weapon — Quotron machines displaying the most recent stock ticker prices. Knowledge was power for the most skilled advisors, many of them 20-something-year-olds who had come from sales training programs at places like IBM and Xerox.
Today, financial advisors bristle at the term broker. Today’s “beginners” are often twice as old and prefer to think of themselves as consultants, not mere salespeople.
Thanks to the internet, anyone can find a stock price or invest cheaply with ETF funds. And now so-called robo-advisors offer strategic investing ideas based on age and goals, making some wonder whether the profession itself is headed for the ashbin of history. Where once the profession evolved, is it now dissolving?
“Before the argument was that the internet would kill FAs, now it’s that robos will. Both are false,” said Michael Kitces, publisher of the blog “The Nerd’s Eye View” and partner of Pinnacle Advisory Group.
Advances in technology will continue to enable advisors to service clients more efficiently.
“Imagine if it took advisors only five minutes to open an account, 10 minutes to rebalance and no time at all for quarterly reports because all the information was available online. How much time would advisors save in one year or even five years?” asked Kitces.
Evolution remains the byword for advisors. Today, they are holistic financial planners who help clients prepare for retirement, create college savings programs and even do household budget projections. They have a long menu of products and services to help clients implement their programs, including insurance and lending services.
The Super Advisor
“Clients want one-stop shopping,” said Michael Silver, managing partner of Focus Partners, a practice management consultancy for financial advisors and financial service firms.
One-stop shopping has an added benefit: Industry studies reveal that clients are more loyal to FAs who offer a more complex array of products, Silver points out. In sales lingo, those clients are stickier. “Advisors should want to create a stickiness factor,” he said.