From record albums to streaming music, bank tellers to Apple Pay, travel agents to Kayak – technology disruption is having a rapid and profound impact on the way we live, work and play.
Independent broker-dealers (IDBs) and registered investment advisors (RIAs) -- the original disruptors of wealth management -- are familiar with the power of technological change. Now with the rise of “robo-advisors,” the growing number of firms that provide online financial advice and automated investment services directly to consumers, financial advisors themselves are being “disrupted.”
While robo-advisors currently have relatively small market share, industry observers expect their assets under management to top $250 billion in less than five years. Quite naturally, some financial advisors are feeling pinched by the lower fees and strong online user experience that robo-advisors offer, and many are concerned about demographic trends that suggest younger investors who grew up with computers and cell phones are more comfortable going online for money advice than to financial advisors. But financial advisors can leverage technology disruption to their advantage.
Lessons From Other Industries
Advisors aren’t the first to face such a serious core-shaking disruption -- and they won’t be the last. In fact, a new survey of Fortune 500 executives found that “the rapid pace of technological change” was identified as the No. 1 greatest challenge for the world’s top businesses. RIAs and IBDs who innovate to embrace this change can emerge on the other side thriving as stronger businesses.
The travel industry is a prime example of an industry transformed by technology. With the click of a mouse, Expedia, Orbitz and others exploited the Internet, to empower travelers to become their own travel agent. As a members-only travel company, Indagare recreated the travel agency concept, developing a distinct reputation for high-end boutique travel that leap-frogged the competition. But it is Indegare’s online editorial content that has set it apart from other agencies. In essence, the agency has become a content publisher, providing news, reviews and a handsome online magazine. Combining deep content with other travel agency functions ensures that users booking through the site get the best recommendations and accommodation perks.
Independent booksellers also felt the squeeze when Amazon and its Kindle came on the scene. To survive, bookstores needed to embrace this change, and broaden their offerings. Denver’s Tattered Cover Bookstore did just that by expanded programming, bringing in authors to draw people into the store, creating what Tattered Cover owner Joyce Meskis says is a “personal contact and the community connection, and that is a cultural legacy that is important to maintain.”
Advisor Solutions
So how can RIAs and IBDs adapt and flourish amid the disruption? Here are five communications strategies to embrace as disruptive technological change envelops the world of financial advice:
Engage On Social Media And With The Technology
Take the personal, hands-on side of your business to places where people are already having conversations to stay ahead of the pack.
Think about the essence of what you do, not solely about how it’s currently delivered
What sets your business apart from others? How can you better tell this story, and how can this essence translate to other delivery models?