Technology like smartphones, tablet PCs such as the iPad and similar Internet-enabled devices have become ubiquitous in everyday life. They're also fundamentally changing investors' attitudes about how to best manage their financial lives -- and who they should seek out for guidance and advice in the process.
These changing attitudes have major implications for financial advisors. To stay competitive and attract the next generation of affluent investors, RIAs will need to increasingly rely on the latest technology to meet their clients' expectations as they evolve.
The good news: RIAs can use the same technologies that are driving behavioral changes to deliver an enhanced level of service -- a highly personalized Know Me experience. What's more, those technologies are easier than ever for RIAs to access and integrate into their practices.
Tech And The Changing Investor
The use of Web-enabled devices like the iPad and iPhone has exploded in recent years. One in three adults in the U.S. now owns a tableti -- most likely the iPad, which controls 98 percent of the tablet market.ii Meanwhile, smartphone sales have surpassed PC shipments.iii
These devices and what they offer are reshaping consumers' attitudes, expectations and behaviors when it comes to their relationships with a wide variety of service providers-including financial advisors.
Consider, for example, the unprecedented degree of personalization that occurs today when interacting with online retailers that use customers' viewing and buying histories to offer suggestions of other products and services of interest or the local pizza shop that instantly pulls up a customer's phone number, credit card info and previous orders when he calls for a delivery.
Consumers' daily lives increasingly consist of a series of interactions that are customized specifically for them in real time by providers who "know" them on some level. This type of personalization is becoming expected-even demanded.
Such demand is having a direct impact on how investors manage their financial lives and on the advisor-client relationship itself, as more investors tap into technology to gather financial information, analyze it and ultimately make decisions about their wealth.
Take social media channels, such as Facebook and LinkedIn. A Forrester Research study of investors who were online, had more than $500,000 in assets and worked with a financial advisor found that a full 93 percent of these investors have a social networking accountiv. These are your clients. They're using social media. And you can bet that for many of them, it's influencing how they learn about financial and investment-related topics, research investment ideas and make buying decisions (with or without your help.) In creating yet another avenue for investors to access knowledge and advice with one click, social media is changing the conversation between advisors and clients and how they interact.
What's more, this personalized information experience has become increasingly portable and on-demand. Investors now count on having access to information anywhere at any time-and on whatever device they want. This makes sense given the huge growth of handheld and mobile technologies noted above. However, the extent to which investors have come to rely on these devices is striking. Forrester reports that 25 percent of U.S. online adults have an interest in using their mobile device as the main channel for their personal financial livesv. These devices, which let users conduct financial transactions from the comfort of their living rooms, are empowering investors and giving them more flexibility than ever. The financial advisor sitting in his or her physical office is no longer the client's only link to the financial world-and may not even be the primary one.