Touch the future (Image: Shutterstock)

What’s the greatest threat to the modern financial advisor? Fee compression? Market volatility? Self-directed investing platforms? I believe advisors are up against something far more challenging: liquid expectations.

Liquid expectations, also known as fluid expectations, result from customer experiences seeping from one industry to another, and the expectation that every product or service encountered will be paired with an amazing digital experience.

Millions of people have come to expect the digital conveniences created by new technology in everything from entertainment to banking. People have become accustomed to a certain level of digital experience, and when they encounter something that is complicated, time-consuming or ugly, they have a visceral reaction. 

For example, why should I fax when I can email? Why make a phone call if I can send a text? If I can have a decent experience when I log into my bank’s app to check my balance or open a new account, why can’t I do the same with my investment portfolio?

Liquid expectations create the philosophy that everything I use should be intuitive and effortless. 

Outside of tech, every industry is feeling the pressure. Grocery stores offer online shopping with pickup or delivery, coffee shops allow you to order via an app and grab your coffee without speaking to a barista, and even home insurance can be purchased with a few videos on your smartphone instead of an in-person evaluation. From consumer goods and services to homeland security, digital experiences are king.

So, what does this have to do with financial advice?

It means that future and current clients will expect the same level of digital convenience from their financial advisor as they get from other services. The separation between “tech” and “non-tech” no longer exists. Laurence Kaye, an expert in digital law and media at the UK firm Shoosmiths summed it up this way: essentially, “everyone’s in the technology business.”

This isn’t about innovating — it’s just about keeping up. 

Think about the “robo-advisor” panic post-2008. There was a concern that investors would shun human advice for high-tech platforms, but it turns out that the robo-advisors weren’t really competing for advisor’s clients. Instead, they disrupted brokerage accounts by making it easier to become a self-directed investor. 

What robo-advisors have done, though, is show that the financial advice industry can enjoy a much better digital experience. But when it’s time to upgrade to a real advisor who can assist with the complexities of life, clients who have invested with a robo-advisor in the past will bring their liquid expectations with them. They won’t want to upgrade to an advisor if it means downgrading their digital experience.

Next Steps

How do you benchmark your firm’s ability to meet liquid expectations? There are three key elements at work: Clients demand an experience that is visual, interactive and easy to use.

The ability to relate visually is one of the most significant advances in fintech of the past 10 years, and it’s going to be a secret weapon for advisors looking to meet this new standard.

Client-facing fintech is all about making complicated ideas simple. Investments, markets, retirement, asset allocation — visual communication goes a long way in bridging the information gap. 

Having a great customer experience starts with smart visuals, so what differentiates good experiences from superior ones? Everything feels natural. Consider three ways in which tech can create an almost unseen experience for customers: 

  1. Next steps are easy to see and understand;
  2. Prompts are clear and helpful;
  3. The digital aspect adds to the experience, and never distracts. 

These elements guide the conversation — whether it’s leading to a purchase, providing a service, or giving information — the customer completes their journey quickly without noticing the elements involved in making that happen. That’s the beauty of liquid expectations — things happen so flawlessly, they’re hardly sure you’ve done anything at all. 

We only really notice tech when it’s broken or out of place, or in the case of voice technology, just a little half-baked. Voice technology has received a ton of attention, but it hasn’t quite met the level of service needed to meet these expectations. 

For one, it’s anything but seamless (anyone who’s had a one-minute conversation with Alexa can confirm that). Second, while it is a digital edge, it’s not at the point where it streamlines or adds to the overall experience. And third, voice has to clear valid security concerns many advisors have about the technology.

Voice assistants require an always-on microphone in the office that stores data offsite in unseen locations for indeterminate amounts of time, and advisors also may fear the inability to speak commands without someone overhearing sensitive client information.

As artificial intelligence gets more sophisticated this could change, but for right now voice assistance is an exciting, albeit disappointing, novelty: not perfect enough to be a robot and not nearly helpful enough to be human.

Here are a few questions advisors can ask themselves to benchmark how effectively they’re living up to liquid expectations:

  1. What features would clients be “giving up” to work with me?
  1. What is a feature you love about a product or service you use, and wish you could have for your practice?
  1. How many steps does it take for clients to review their portfolio?
  1. Do you feel comfortable sharing your screen with clients, or do your digital meeting tools need work?
  1. If Amazon were to get into the investing game tomorrow, would they be a threat? Why or why not?

Here’s the good news: these big technology companies cannot compete with the personalization, expertise, empathy and standard of care that you provide. That’s why great advisor tech is designed to fade into the background to let the brilliance of your work shine through.

As liquid expectations continue to overflow into every industry, financial advisors will have to rise to the challenge, but combining the irreplaceable value of true advice with a compelling digital experience will build an unbeatable business for years to come.


Aaron Klein is co-founder and CEO of Riskalyze. Follow him on Twitter at @AaronKlein.