Editor’s Note: This is the first article in a two-part series about the transformation of the client and advisor experience.
While much of financial services disruption has led to innovation in the client experience, financial advisors are also seeking better experiences and beginning to demand smarter digital tools. A study by Fidelity (eAdvisors Take the Lead, 2015) found financial advisors that take advantage of technology more than their peers—call them eAdvisors—had roughly 40 percent more AUM, attracted more Gen X and Y clients, and are expanding geographically.
The average age of a financial advisor in 2016 was 50 years old, and continues to rise each year. Forty percent of older advisors have completed a succession plan. The number of jobs for financial advisors is slated to grow by 66,400 by 2020. The industry faces a need to recruit and retain more next-generation financial advisors, but also provide them sophisticated technology them to scale their expertise and reach.
So What Will The Private Client Experience Look Like In 2020?
1. Shifting To An Experience-Driven Model: The up-and-coming generation of investors who were born in the Internet are more willing to share their personal data and experiences across the Internet. Additionally, the Internet has shown—with crowdsourcing, peer-to-peer and the “gig” economy—that multiple business models can be successful. Successful innovations all have one thing in common: the right user and client experience is the differentiating factor. Wealth management will be no different. We have begun to shift from the traditional binary choice of advisor-centric or firm-centric models to the experience-centric model: tools, techniques, products and services on flexible, integrated platforms that shape the advisor’s ability to successfully serve tomorrow’s clients.
2. Being A Smart Fiduciary: Perhaps the most impactful industry gains from disruption lie in the growth of truly consultative, compliant sales. To attract a new generation of advisors and clients, advisors will demonstrate and maintain not just professional accreditation, but capabilities that enable guided sales and take advantage of opportunities across a multi-generation household. In addition, intelligent interaction tools—with built-in audit trails and content indexing—allow advisor and firm outreach, consultation and sale to maintain compliance while also potentially meeting next generation clients’ preference for self-service.
3. Leveraging Artificial Intelligence For Engagement: Financial advisors in the near future will utilize unified, intuitive Artificial Intelligence (AI) powered platforms to manage their clients—replacing complex manual technologies. AI tools will also augment and streamline daily tasks and allow advisors to be more proactive. Data gathered from internal and external sources will generate important client insights—such as the probability of a life event—and deliver it within an integrated platform that advisors use to manage client engagement
4. Creating A Multi-Service, Single Company Experience
Multi-generation households will be able to explore and share financial needs and wants within a unified experience. Advisors may consider actively structuring cross-generational service teams offering a broad array of advice. For example, some top advisors today provide financial planning services to parents, while offering their college-age children self-service digital tools, like a personal financial management app or robo-financial planning service.
5. Pairing Health With Wealth
The next frontier for client engagement in financial services is the growing integration of health, well-being and financial planning, or “whealthcare.” Whealthcare enables households to better protect assets, preserve lifestyles and maintain independence into older age. Additionally, the notion of “whealth” helps households address planning gaps and diversions for long term security. Multichannel experiences and cognitive intelligence facilitate the breadth and depth that whealthcare can offer.