Technology is an important part of an advisor’s value proposal when working with clients and prospective clients, but advisors aren't doing enough to tell clients how technology will help them, according to the fintech executives.
“I don’t think that the client is looking for an AI-powered financial advisor or a super technology-powered financial advisor unless you can message what that actually means,” said Gabe Rissman, president and co-founder of YourStake, a Brooklyn, N.Y.-based provider of AI-driven personalization tools.
Advisors want to tout their technology to stand out from their competition, but clients are less interested in technology and more interested in results, according to Rissman.
“The client doesn’t care what technology you’re using,” he said. “They care about their problems and they care about whether you can solve their problems as an advisor.”
Any move that they make, including the introduction of new technology, has to be done with the client experience in mind, executives said.
“Too much focus is on the technology instead of what the technology is going to provide from a client experience,” said Chad Druvenga, CEO and owner of CBS Brokerage, an independent insurance brokerage firm based in Shakopee, Minn. “There’s been a real challenge in the industry on how to effectively use that technology to enhance the client experience.”
Advisors who want to highlight their technology as part of their value need to explain how they use it to make their clients’ lives better, executives said.
“I think highlighting the investment on the technology side to the end-investor and their commitment to it typically really works and end-investors want to see that,” said Dan Johnson, managing director at Chicago-based F2 Strategy, a wealth management technology and marketing services firm.
When talking up their technology, some advisors have a difficult time figuring out how much detail to go into and sometimes make it difficult for clients to understand. Advisors need to simplify their explanations, said Todd Bertucci, executive vice president of technology sales at Orion, an Omaha, Neb.-based wealth tech platform.
“Don’t overwhelm your clients,” he said. “If your introducing technology, introduce it in a simple fashion and the big thing is asking them what they’re looking for.”
Seeking input from clients can work in two ways, executives said. First, it can help illustrate for firms what type of technology and services might be beneficial to them. Second, it is an opportunity to find out the level of sophistication an individual has about technology and how much they want to learn about it.
“Advisors can use surveys when they can [to] see how tech savvy the client might be and have a better idea if they want to make available different types of technology,” said Jon Patullo, head of product at Gainesville, Fla.-based TradePMR, an RIA-built technology and custodial services firm.
After finding technology that addresses their needs and training staff how to use it, firms should test it out on a limited number of clients, Bertucci said.
Any new technology should make sense for the firm. Bertucci and Johnson both cautioned advisors about obtaining technology just for the sake of obtaining it or because a competitor has it.
“I think you put your business and your staff at risk when you become what we call a technology collector,” Bertucci said. “Because if you don’t spend the time making sure all of your systems are integrated and working and you don’t give that a year or two ... change can be the bane of your existence and turn people off from it.”