Advisors face ever-growing struggles with competition, fee compression, cybersecurity and finding new talent. For those willing to embrace it, new technology is helping them tackle all of these issues, according to Fred Duden, global head of product development at Broadridge Financial Solutions.
That has only become more clear since December, when Duden last discussed some of the top industry trends with ThinkAdvisor.
Digital adoption was “something that advisory firms and advisors were thinking about” for a while but, “with COVID, that adoption [is] something that we’re just seeing take off” this year, he told ThinkAdvisor in a recent phone interview.
Thanks to that acceleration, the industry is making strides in several important areas, according to Duden.
1. Remote Work
The one major “sea change” that has occurred as a result of the pandemic has been the adoption of Zoom and Webex video conferencing platforms by advisors and their clients, Duden said.
“Fifty percent of investors said communications with their advisors have changed in some way in light of the stay at home mandates,” he noted, citing the findings of a recent Broadridge survey.
And 62% of those who reported a change in communication with their advisors would like that to be maintained to at least some degree post-pandemic, Duden added.
2. Client Acquisition
The average financial advisor acquires maybe two to three clients a year and, “in today’s environment,” with the compression of client fees and competition from different business models, how advisors can continue to engage with their clients — in a pandemic or not — is a “really, really important” issue, he said.
“What’s happened is investors have become more knowledgeable” than ever before, Duden explained, noting that “today’s investors [want] advisors that are more kind of digital first.”
As a result, “there’s a tremendous opportunity around… digital engagement,” he said, explaining that by embracing digital marketing and tools, advisors can “reach out to more and hopefully engage more clients and therefore bring on more clients” than ever before.
Digital adoption is also a “really great way for them to show the differentiation with the advice that they provide,” according to Duden.
Embracing digital adoption and hybrid advice, marrying digital capabilities with the traditional advisor model to win more clients each year, is perhaps the best way for advisors to go, he suggested.