One of the most remarkable aspects of technology-driven change is how quickly “revolutionary” new tools are overshadowed or made obsolete in the wake of further innovation.
Just in the last 10 years there have been multiple examples of this happening in our day-to-day lives. For instance, just think of DVDs. When the DVD first emerged, consumers were delighted to be able to throw out their old cassette tapes, and say good-bye to “tape hiss” forever. And where is the DVD today? It’s substantially forgotten, now that most consumers are using Internet streaming video services from companies such as Netflix or Amazon.
It's time for us to add “robo-advice” to this list. To be clear, this doesn't mean that having a web-based, low-cost digital solution will replace the need for advisors to provide advice to retail investors
But it does mean that the conventional “advice model” has been overshadowed by continued technology-driven transformation within our industry. Increasingly, robo-advice technology will become bare necessities for any retail financial advice firm that wants to grow by adding value to financial advisors and their clients.
Firms that want to stay ahead of the curve need to ensure that their digital consumer tools are part of a broader system of integrated technology tools that address specific “pain points” for advisors and their clients at each stage of the service process, from the initial onboarding of new clients and beyond.
Cut Out The Paperwork And Bureaucracy With Onboarding New Clients
Let's begin with bringing on new client relationships. In no other area is the financial advice industry more mired in archaic business practices. Financial advisors across the industry routinely discuss how onerous it typically is to go through the entire process of bringing a new client relationship onto their broker-dealer and custodial platforms, and no wonder: The typical process requires reams of paperwork, multiple signatures and initialing, and considerable back-and-forth with documents delivery.
In addition to their need for digital advice solutions, the majority of financial advisors would probably rate the ability to seamlessly and quickly bring on board new clients with an entirely paperless, digital solution—accessible anytime, anywhere and through any personal computing device—as a high priority. In fact, client expectations in this area have intensified as direct to consumer financial advice providers have been providing such solutions for quite some time now.
With that said, certain firms have tried to go paperless and failed to satisfy advisors or clients because their digital onboarding platforms have not worked across both advisory and brokerage accounts in one consolidated solution. Being able to use digital onboarding tools for some accounts while being forced to go with traditional paperwork for others, ultimately just drives confusion and frustration among advisors and their clients.
Digitized Account Funding And Asset Transfer Solutions
Similarly, another routine advisor and client complaint across our industry is how cumbersome it can be to fund a new account, or transfer assets between different accounts—even if they are within the same firm.