Financial advisors were once behind the times when it came to adopting technology to drive client engagement, but they’ve caught up quickly, said Dave Christensen, chief product office for FMG Suite, a digital marketing automation, website, and relationship management platform for advisors

“Until recently, there was a lot of inertia to overcome,” said Christensen. “Now there’s a lot of training and a lot to teach advisors. Necessity is the mother of invention—when the pandemic struck, inertia broke free, and the industry just had to go digital and remote.”

Christensen said that in 2020, FMG Suite saw a five-fold increase in advisor engagement with its products. Whereas advisors previously saw many digital tools, especially those around marketing as “nice-to-have” additions to their capabilities, they came to rely on them completely as most people were forced to work from home.

In March of last year, in-person events “disappeared,” he said, which meant that events in general weren’t happening. Then, during the summer, they returned.

“More events are being held today than were being held before the pandemic, but almost all of them are now digital,” he said. “People have shifted to being very comfortable in front of a camera and a screen, and that’s exciting to see because their activity can now be tracked, and their content becomes reusable.”

Even though the world is gradually being vaccinated against Covid-19, some of 2020’s changes represent a “new normal,” said Christensen. In particular, he said, there are five technology-related trends that will continue to impact advisor-client engagement during 2021 and into the future.

1. Traditional client interactions are dead.
“Advisors who did all their work one-on-one and face-to-face are quickly playing catch-up to digital natives and early adopters,” said Christensen. “When the pandemic struck, they didn’t have the right tools in place, but they scrambled in the aftermath—and that’s when we saw our sales and our growth explode.”

Clients, too, have become comfortable with digital interaction, said Christensen, which gives advisors the opportunity to connect in new ways like podcasting and video blogging.

Advisors are also interacting with centers of influence through digital means, and sharing space on blogs, podcasts and videos with CPAs and attorneys, where each can act as a subject matter expert on the other’s digital media.

“Referrals are also moving digital, we’re seeing more e-mails, timely communications and video blogs being shared from one person to another,” he said. “You’re no longer building the primary relationship on the golf course, at a football game or over dinner, introductions are happening more personally, but digitally.”

The shift towards more digital and multimedia interactions has some interesting quirks, said Christensen. For example, FMG Suite introduced an online chat in addition to phone and in-person customer service, thinking it would reduce the number of service calls the company received and that it would be able to reallocate staff away from its phones—but that didn’t happen.

Instead, overall interactions with its clients increased, and FMG Suite had to hire more staff to handle chat and phone support.

“Investors will want a relationship, but they also like being served digitally and in a higher-touch manner, and they’ll want it to continue,” he said.

But as the number of touch points with clients increases, compliance departments will struggle to keep up with the tide. That’s one area where artificial intelligence may assist advisory firms.

2. Advisors with the most “digital real estate” will win.
“Advisors with the best digital footprint are really going to win clients in the future,” said Christensen. “This is now often your first impression of any business you’re thinking about working with. Now more than ever the way advisors present themselves on web properties matters. It’s their primary interaction.”

Advisors should expect to be judged on how they compose e-mails, create videos and interact in video conferences. If they offer clients and prospects a painful digital experience, the prospects will likely look elsewhere, he said.

Advisors with the biggest  and best digital footprints are creating content across all available media, offering streamlined client onboarding experience, and are adding automation and self-service to their digital capabilities.

“It then goes all the way to the back office,’ said Christensen. “Those who have great integrations with their CRM are going to have more efficient practices, and will be able to grow faster.”

Through digital engagement, clients and prospects will also be able to research how their advisors interact with others and work within their communities, he said. “If all you have is a resume, that’s maybe going to lead me not to take the next action with you,” he said.

Advisors also need to be aware of their professional and their personal social media presence, said Christensen, because clients and prospects are watching and doing research.

3. Regulators are catching up to new technology.
As the pace of technological change has quickened, regulators have lagged behind. Until recently, this hasn’t been an urgent issue because most of the financial industry has also lagged in adopting new technologies.

Covid-19 has changed that, said Christensen, but as the volume of digital communications has increased, firms have struggled to keep up with the compliance demand. To compensate, firms are creating more content for advisors at the enterprise level.

“Doing that takes some of the burden off of their compliance team,” he said. “We’re seeing firms creating entire webinars, landing pages, introductory e-mails and power-point presentations for their advisors, so that there’s everything ready to go. Because they built it, it doesn’t have to go through a lengthy process with their compliance team. They’re getting ahead of everyone trying to do their own thing and overloading compliance.”

But in the rush to create digital content, many firms have posted videos to platforms like YouTube and Vimeo without retaining the original hard-copy version of the content—usually an mp4 file, said Christensen. Moving forward, that practice “isn’t going to fly with regulators,” he said.

4. M&A, a wave of retirements and professional poaching will accelerate changes in the industry.
Through its internal analytics, FMG Suite has detected an increasing pace of industry consolidation, Christensen said.

“If we’re building websites, most companies have us put their team members on their website, and we track that information—so we know how many team members are parts of a given firm,” he said. “We can also map out the locations among the service professionals we work with, and we can look at movements when companies call in and say I’ve become acquired, merge my account with this other company. Starting in March and April, we saw a significant uptick in individual advisor practices deciding to join other firms.”

Calls to merge accounts elevated to twice their previous levels as the pandemic locked down the economy, and stayed there, he said.

Christensen said that the recent increased urgency around technology and compliance concerns are likely driving some smaller firms to look for acquirers.

“If you were moving towards retirement and this was going to be your succession plan, this might have seemed like a good time to be done and therefore not have to learn a lot of new things and change the way you do business,” he said. “On the other side, we’re seeing aggressive M&A activity from strong firms who already have an amazing digital presence. They’re sensing an opportunity. Even inside some of the independent broker-dealers, they’re building funds internal to the firm to help finance this activity for their advisors.”

5. Mobile, location independent interactions have become the best channel providing financial advice.
Even during a year when many advisors were required to work from home at their desktop personal computers, there’s been a shift to more mobile-oriented operations, said Christensen.

“The number of communications that advisors sent out that were intended to be consumed on a mobile device has increase consistently,” he said. “Advisors working with us are clamoring more and more for a truly mobile experience.”

Advisors, as well as clients and prospects enjoy the ease of mobile applications, where they can “swipe” to ask and answer questions and change elements of their plans, he said.

In response to rising demand, FMG Suite is releasing its first mobile application for Apple’s iOS and Android that will allow advisors to compliantly interact with their customers directly via mobile platforms.

Christensen also mentioned a couple of other trends.

“From a fintech standpoint, we’re seeing that there’s a desire to have both the option of buying a bundled experience, and buying an unbundled point solutions,” said Christensen. “One thing we’re looking at is introducing more point solutions to customers so they don’t have to make big, bundled purchases. Advisors are often on a journey with their technology, the first thing they want might be an online brand experience. They can do that with a website and editorial content. Then, later, they want technology that enables better client relationships. Then, after that, they want to figure out digital prospecting.”

Technology providers like FMG Suite will be trying to capture the trend of allowing advisors to take “digital baby steps,” he said, small purchases or upgrades that allow them to implement technology gradually.

Christensen has also noted a gradual but significant demographic shift in FMG Suite’s users, trending towards younger and more female advisors.

“These are advisors who are comfortable with the digital experience and they require a higher level of service, and that’s why they’re leaning on companies like us,” he said.