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Practice Management > Building Your Business

Digital Tools Boost Client Engagement: Cerulli

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Advisors have often worried about the effects of digital tools on their client relationships, but research from Cerulli finds that such tools drive advisor efficiency — as well as actually enhancing the way they interact with clients, while providing the digital experience that clients have come to expect in other parts of their lives.

In its report U.S. Retail Investor Advice Relationships 2018: Optimizing Engagement, Cerulli finds that digital tools “will increasingly serve as a complement to traditional advisors, enabling them to spend more time on client-facing activities.”

In fact, not only will digital tools free up advisors for more client time, they will “improve the way that advisors form relationships with their clients and scale their businesses,” the report adds. Retail investors expect online, all-the-time presence, but they also need what a live advisor can provide: personalization, insight and analysis.

“As many practices seek to build scale, it is important to remember that the human element of discovery is irreplaceable and that the best use of technology is to enable advisors to spend more time in client-facing activity,” says Scott Smith, director at Cerulli.

He adds, “With the industry focused on creating efficiency and scale through digital platform development, the worth of face-to-face meetings has been relatively discounted.”

When it comes to wealth management, the report says that future growth will come from hybrid models that allow investors instantaneous access to information and analysis, but that information and analysis will be guided by human advisors providing ongoing advice and overall relationship management.

Digital engagement “will be a core component of every firm’s wealth management offering,” the report says — and Cerulli estimates that total assets in the digital advice segment will reach approximately $295 billion by the end of this year, and exceed $1 trillion by the end of 2023.

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