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Advisors’ Tech Use: There’s No Going Back

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Advisors were already increasing their use of digital tools to increase efficiencies before COVID-19. But the pandemic accelerated their adoption of these capabilities, and they are not likely to go back to the way they did things before, LPL Financial executives say.

Even after the threat of the virus ends, “This movie is not going to sort of restart where it was a year ago,” Burt White, the firm’s chief investment officer, told ThinkAdvisor Thursday, during the firm’s first virtual Focus conference.

One key factor supporting this trend, he explains, is that the efficiencies digital tools have created for advisors “allow them to concentrate their energy more on the client interaction” side of the business. This is because the tools automate many of the processes they needed to do in the past.

More Predictions

“COVID didn’t create the technology innovation” that we are seeing, Matt Enyedi, managing director, national sales and consulting at LPL Financial, told ThinkAdvisor on Thursday. “It didn’t create the move to digital. It just sped it way up.”

Enyedi predicts advisors will take the best elements of remote working and combine them with the traditional methods they used in the past.

For one thing, advisors can now bring in talent and attract clients from all over the country and work closely with them thanks to the mass adoption of remote work, he said.

Therefore, even after the pandemic ends, “there’s no going back,” Enyedi explained. “You can’t kind of put the genie back in the bottle. But I do think folks will take the best of all worlds. That’s what we’re hoping.”

LPL’s Tech Efforts

“What we’ve done so well over the years at LPL is we’ve given [advisors an] avenue of independence,” and with that comes the “freedom and flexibility to run the business any way you want,” Enyedi said.

However, that adds a certain degree of complexity to advisors’ work, since they’re not just advising today. They also are running a business, including real estate, staffing and technology, he notes.

Most advisors don’t wake up every morning with a passion to run their business, he adds. Instead, they look forward to serving their clients.

To help advisors maximize time spent helping clients, the independent broker-dealer launched LPL Business Solutions last year. Its Admin Solutions, CFO Solutions, Marketing Solutions and Technology Solutions handle their business needs, according to Enyedi.

The Business Solutions teams can “solve those unique business challenges” so that advisors “can focus more and more of their time focusing on the needs” of their clients, Enyedi said.

A major challenge for advisors is adding new capabilities, the executive explains. Advisors tend to stick to the status quo rather than adapt new technology and other innovations, because “friction to make the change is perceived as more painful than the value you get” from it, he said.

Business Solutions teams, however, “overcome that obstacle by doing it for you,” Enyedi added. For example, they can set up a new customer relationship management system.

‘Business With Purpose’

During an LPL Focus session called “Business With Purpose,” Enyedi pointed out that managing wealth is only half of what advisors do.

“Many of you are also responsible for running a business in addition to providing advice to clients,” he said. “Communications and marketing, office administration, cash flow analysis and payroll, technology and cybersecurity, the management of people and real estate. That list goes on and on.”

Pre-COVID, LPL’s Marketing Solutions team “spent much of its time assessing growth opportunities,” Enyedi noted. “But quickly they added new services as the market shifted [and] we actually began to apply stress tests to our clients’ businesses,” he said.

“Marketing Solutions became an invaluable tool for engaging with … existing clients” who needed more information and assurance during the pandemic,” he said.

As a result, advisors strengthened their relationships with clients and also “grew faster than anytime before as those same clients entrusted them with an even larger share of their money,” the executive added.

The Technology Solutions team also made a “significant change” after the pandemic started, Enyedi said.

It initially focused on cybersecurity and optimizing hardware and software applications. But, as offices started to close, the team branched out to offer a fully remote office solution for clients including cloud-based storage and document sharing, he noted.

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