It’s undeniable that hyper-personalization has become the standard for digital interactions, with algorithms being able to predict what people want even before they know that they want it. The technological innovations that have supported this shift in behavior, have made customized digital experiences the standard across many industries, forcing financial advisors who are reluctant to adapt to the current landscape to contend with the risk of not meeting client expectations.

For a lot of advisors, the resulting people-pressure has translated into burnout due to advisors needing to operate as coaches in addition to managing portfolios. Skilled professionals are humans, not machines. Independent advisors, especially those who run their own small businesses, simply cannot predict a client’s mood, decision-patterns, and communication preferences in the same way that Netflix, Hulu, and Amazon Prime Video can with their content recommendation algorithms. 

So what exactly does this digital acceleration, particularly with the advancement of artificial intelligence and robo advisors, mean for the wealth management sector? On the one hand, technology creates a unique opportunity emerging for wealth managers to work smarter and more methodically—and to deliver a higher level of service to investors, as a result. On the other hand, technology creates unreasonable pressure for constant availability and instant access to insight.

As with any new tool or resource, there’s a balancing act to getting the technology formula right for your unique financial advisory practice.

Rather than chasing high-speed trends like artificial intelligence, the key is to discover the throughline back to human values. That means adopting a troubleshooting mindset to get ahead of less-than-obvious pain points that can bubble up in a financial advisory practice. Here’s a look into what that process can look like for specific points of business friction.

Challenge #1: Keeping Up With The Social Media Mindset
Every generation has increased their social media use over the past year, with 66% of Generation Z and 72% of millennials reporting that social media is essential to their lives. According to demographic data, baby boomers and Generation X are no exception. People of all ages are engaging with information content such as YouTube tutorials, podcasts, on digital platforms that are designed to evolve with them in real-time, resulting in 74% of consumers expressing frustration when a digital experience is not personalized.

While social media has tremendous benefits when it comes to content discovery, information-sourcing, and boredom alleviation, there are questions about whether or not it’s good for humans on an individual level.

A recent study from the Pew Center found that 64% of Americans think that social media has a mostly negative effect on the way things are going in the country. Researchers have also begun to study mental health effects of platforms like Facebook, Instagram, and TikTok, particularly among young people. It’s important to remember that in these industries, the end goal is to grow profits on the basis of sales and ad revenue (i.e. faster fulfillment times, higher sales order volumes, more precise personalization and targeting). 

With this context in mind, financial advisors can uncover a competitive advantage by doubling down on conversational dynamics that matter to investors. One solution to implement is a client portal that can be tailored to deliver reports of varying complexity through web and mobile applications.

The most effective portal experiences empower advisors to configure communications for different types of investors with different sophistication levels. As clients evolve, advisors are better equipped with the infrastructure to support those changes and offer more services.

Success comes down to communication that advisors can control rather than being dependent on social media algorithms to stay top of mind with existing customers. Troubleshooting this pain point means asking the question, “what do my clients need to hear from me to know that I have their best interests in mind?”

Challenge #2: Navigating Generational Preferences
Millennials and Gen Z are gaining power as investors and as buyers in the United States. Meanwhile, the average advisor is 55 years old, according to a J.D. Power Study. The crux of the resulting generational gap is that digital natives engage with technology very differently than those who began using the Internet in their teenage or early adult years. Gen X is a smaller generation compared to boomers, millennials and Gen Z. 

Meanwhile, almost 90% of advisors have engaged or plan to engage with the children and grandchildren of their existing clients, which means technology’s importance in wealth management will continue trending upward, parallel to client expectations. Younger generations, who are highly attuned to digital experiences, anticipate rich interactions through digital touchpoints that operate as a communication channel.

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