Nearly half of affluent investors are not provided metrics covering fees, return, goal progress, investment risk and benchmark comparison from their advisor. Or, perhaps worse, they aren’t sure if their advisor is providing them this data.
One-third of affluent investors aren’t highly confident that “an unbiased third party would get the same result as [their] advisor if they were to calculate” these important investment performance metrics. Considering these findings from a recent Phoenix Marketing International survey of more than 2,100 affluent investors, you can begin to see where a trust gap might exist between financial services providers and their clients.
Technologies abound to help advisors perform almost every aspect of their jobs, including relationship and trust-building. However, one of the ironies of placing more trust in technology to help us drive efficiencies and growth is that investors themselves are also placing more trust in technologies to assist them in every aspect of their lives, including financial decision making, which can cut into our growth.
I point this out to underscore that technologies are often looked upon as a panacea for nearly any challenge facing the financial services industry, when instead they should be recognized as tools to assist you with addressing those challenges. Addressing the trust gap implied by the stats referenced above can be facilitated through smart technology usage.
Tech Augments Human Capital
While technology can help streamline processes and significantly improve efficiencies, in relationship-based businesses it should not be viewed as a replacement for humans, but rather as an additional asset to help do our jobs better.
What, after all, are the drivers of trust in the advisor-client relationship? I’d argue they boil down primarily to your consistency (delivering what you promised when you promised it), your accountability for your actions/advice (admitting when you are wrong and explaining why and how to fix), and your client focus (listening closely to and understanding your individual client’s needs and fears).
Once you’ve dispelled the myth that technology holds all of the answers, you can then begin to realistically judge a given technology to determine how to incorporate it to accentuate and strengthen your consistency, accountability and focus.