Before using automated workflows, 70 percent of the firms in SEI’s analysis said that they didn’t have enough time for client-related activities, but when the processes were implemented, only 41 percent of firms reported not having enough time for their clients.
Automation also improved human advisors’ familiarity with clients, the report said. Before automation, 65 percent of the advisors in SEI’s research said that knowledge of clients and activities were primarily stored in the memories of individual people – a number that dropped to 39 percent after automation was implemented.
Firms implementing automation were also more likely to use meeting agendas and conduct follow-up on client meetings and were more likely to have a coherent process for prospecting and onboarding clients. As a secondary benefit, workflow processes and automation may also help advisory practices avoid errors, the report said.
For the small segment of truly high-net-worth clients, with investible assets of more than $1 million, the planning process is still typically initiated by a human advisor – but that is not the case for less wealthy clients, only one-third of whom approach planning with the assistance of a human advisor, according to SEI.
The emerging future is one where investors have 24/7 access to their accounts and demand a seamless experience from their advisors, the report said, adding that most investors ready for financial planning are accustomed to opening their own accounts and starting the investing process themselves from their own computers, in their own homes.
Much of the industry already uses client portals and robo-advisory platforms to attract emerging affluent clients and scale their businesses, but few have mastered the process of moving digital prospects to full-fledged planning clients, according to SEI.
Clients no longer need advisors to make investment recommendations or execute trades as much as they need someone who understands their personal situation, is easy to work with, and makes few, if any, errors, SEI said. Anderson said that advisors who are error prone, difficult to access and are aloof from their cleints can’t succeed in the financial planning business.
SEI inverviewed 542 advisors in November and tracked the performance of 46 firms between September 2015 and December.