By Mike Byrnes
The outlook for technology and its impact on the financial services industry may have been the most earth-shaking development at the FPA's Business Solutions Conference in San Francisco-even more so than the two minor earthquakes that hit the city on Monday.
About 350 advisors, speakers and exhibitors attended the Financial Planning Association's conference. While most apparently slept through the earthquakes, they did take note of the technology developments that are shaking up the financial industry. Speakers focused on how technology can improve the client experience and make businesses more profitable.
Here are some of the highlights:
1. Increased memory capacity and the cloud. Spenser Segal, CEO of ActiFi Inc., said not to worry too much about the space it takes to save things online. Storage costs are 1/150th of what they were 25 years ago and that trend will likely continue in the coming years, he said. Cloud-based computing will significantly impact the way data is stored, he added.
2. The paperless office. Tim Welsh, president at Nexus Strategy, said i takes someone about 20 minutes to get up from their desk and get a paper folder. That's how much time an advisor can save if he has all his information at his fingertips using a tool such as Laserfiche. It can take six months to go completely paperless, but it can help a firm go green, improve efficiency, clear out clutter and facilitate real-time data retrieval.
3. Integration. A key to effectiveness for advisors will having an integrated workstation with CRM, portfolio management, document management, financial planning and rebalancing tools, and other software all working cohesively. One integrated piece of software can tie them all together, so the experience is seamless to the user, Segal said. Custodians are taking the lead in this area, which is still in its infancy stage.
With full integration of supporting technologies, a workflow can be created that incorporates numerous tools, leading to a more efficient office, Segal said. "Workflow templates become part of the daily process. Spend an extra hour of time to create templates then you do not have to reinvent the wheel each time," Segal said, who believes advisors can cut costs in half by doing this.
4. Improved Web sites. Whether or not an advisor's clients and prospects are using social media, they are searching for things online. For that reason, T.J. Gilsenan, founder of The Interactive Advisor, said advisors should try to appear higher on Google search results by using geographic keywords and words that are within clients' vernacular. Google's algorithm helps index Web sites based on their content, so it is important to use the right terminology.
"Your main enemy is the back button," Gilsenan said. To prevent first-time visitors from leaving a Web site, he suggested having a power sentence describing what you do and for whom you do it. People are pressed for time and they often do not read in a traditional way, he added. When looking at online content, they read the headline, images and caption, then maybe dive into the text that captures their eye, he said. Thus, advisors need to design their sites appropriately.
When it comes to measuring Web site performance, Gilsenan recommended GetClicky as an alternative to Google Analytics, as it has a great dashboard.
Bill Wostoupal, national sales manager of NorthStar Financial Services Group LLC, encouraged advisors to know their ROI with Web site marketing. "Measure all the results, including how many hits came to the Web site," he said.
5. Social media. "Fifty years ago it would have been a completely different story of how the news of Bin Laden's death broke," Wostoupal said, referring to the speed at which information propagates because of social networks such as Facebook, LinkedIn and Twitter.
"This is here to stay. It is going to be more and more prevalent," Segal said of social media.
Greg Gilbert, president of Infinity Financial Services, strongly recommended that advisors use LinkedIn as a referral tool, especially by seeing who other people know. "Look at LinkedIn before a meeting. Who do they know? LinkedIn provides an opportunity to know where they come from, [their] names and backgrounds." Advisors should use LinkedIn to see if they share any mutual interests or contacts with clients or prospects, he said.
James Bell, president and founder of Bell Investment Advisors, admitted he is still learning about social media every day. "For me, it is that my clients experience my authenticity," said Bell, explaining that social media is a good tool for self expression.
What is going to further fuel social media, speakers said, is the younger generations that grew up in a digital world and the boom in smart phones and handheld devices. (In a show of hands in the general session, only five people did not have a smartphone.)
Michael Riley, vice president of institutional sales at TD Ameritrade, said this younger generations will be the beneficiary of a massive shift of $18 trillion in the coming years. Thus, if advisors want to grow in the future, they will need to adapt and learn to use social networks effectively.
6. Videos. Two-thirds of the world's population are visual learners. Christopher Norton, creative director at Advisor Studios, said memory retention levels improve 60% through video. He added that not only do videos create excitement, if done right, they also allow for sophisticated metrics to see what is popular and effective. He suggested starting out with a company overview video that validates your value and then consider videos that replace or compliment routine marketing commentaries.
As powerful and popular as videos are, they are not widely used by advisory practices. In the coming years, advisors should incorporate videos into their prospect marketing and client communication plans, which can result in clear differentiation from those that are not keeping up with advancements, speakers said.
These six areas of technological innovation demonstrated why technology comprised such a large part of the FPA's business solutions conference.
"These tools are going to change the way you do business," Segal told attendees.
Note: As always, check with your compliance department for its specific guidelines on what your organization will allow you to do with social networks. It is strongly recommended you hire an archiving service to capture all social media communications.
Mike Byrnes founded Byrnes Consulting to provide consulting services to help advisors become even more successful. His expertise is in business planning, marketing strategy, business development, client service and management effectiveness, along with several other areas. Read more at www.byrnesconsulting.com.