In its second quarter 2016 issue of The Cerulli Edge—U.S. Retail Investor Edition, global analytics firm Cerulli Associates posits that technological advances are forcing wealth managers to get with the digital program to help bolster the quality of planning they provide clients.
“Wealth management providers, in particular, feel pressure from technology solutions such as digital advice, changing financial planning expectations, and the commoditization of investment management services,” Shaun Quirk, senior analyst at Cerulli, said in the report.
“As financial planning opportunities become available to a broader investor demographic, providers will need to leverage technological advances to scale the solutions, and streamline everything from the onboarding and information-gathering stage to the recurring planning conversations,” Quirk said. “The providers that can take the abstract nature of financial and retirement planning and make it an engaging, tangible process will win client assets.”
The proliferation of tech-enabled financial information in the public sphere has turned the data dynamic upside-down: Instead of people going to advisors to get information, many investors are now weighed down with too much information and are going to advisors to find out what to do with it.
Cerulli says advisors need to cut through the clutter by offering a deeper client experience—in other words, a holistic planning model. But Quirk believes that “holistic” is a vague, overused term that’s often geared toward investment management rather than true financial planning.
Many of you reading this might think he’s off-base with that comment, and that you already define your value proposition by providing comprehensive holistic planning that goes beyond simply picking stocks and bonds to buy and sell. Whatever the case, it’s clear that wealth managers who rely on commoditized investment advice will have a hard time standing out from the pack—whether it’s robo-advisors or human advisors.