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.

Integrated Programs: Preparing For The Future

Fueled by employer incentives, multichannel experiences such as “lunch and learn” financial security seminars and online decision support tools are now offered alongside of health programs such as smoking cessation, weight management and physical fitness/training. Reflective of the financial burden of student debt on employees, a quarter of employers’ plans to offer student loan counseling or repayment assistance.

A growing percentage of companies are expanding their well-being programs to include financial security, up to 84 percent this year from 76 percent in last year.

Tailoring whealthcare programs for households represents a strategic opportunity for forward thinking advisory: embedding daily physical and financial activity with life event tracking into personalized journeys fuels augmented intelligence that can help drive better engagement and decision-making to improve whealth.

Best Interests Of Seniors

Financial abuse of seniors is estimated at between $3 billion to almost $40 billion annually. Whealthcare can contribute to the protection of at-risk seniors by addressing and monitoring issues such as cognitive impairment in a holistic, integrated financial and physical health plan.

SIFMA remains at the forefront of promoting best interests of firms and their senior clients through events, partnerships and promulgation of industry trends such as whealthcare.

Enabling the next generation of advisors to deliver on these five major trends implies investment in new capabilities: the “Future School” of financial advisors’ customer engagement platforms. Agility is a new and critical factor in enabling advisors to apply the technological advances to personalize their client impact, while maintaining competitive efficiency and regulatory compliance.

The Case For Value: Graduating To Future School

As with any investment, a good financial advisor will want to understand the benefits and risks. As a launchpad into strategic planning, top advisors may consider the following impact scenarios. 

 A. Curating Multichannel Experiences

Keeping track of households requires a heightened commitment to data and customer relationship management, as well as the ability to refresh relevant information and act upon it, in context to the entire household relationship.

Younger generations represent future opportunity but may demand cultivation through service and education. In addition, younger clients may prefer digital services to human interaction.

Do you have a plan to combine and align personal interactions with digital, two-way communication?

B. Addressing Fiscal Planning, Health-Care Costs And Population Demographics

Aging investors represent the other end of the service spectrum with an emphasis on simplifying income and tax strategies. In contrast to the relative simplicity of their accumulation phase, disbursing income and managing expenses in retirement can be much more complex. Retirement is indeed both a balance sheet and an income statement issue. Maximizing limited resources will be increasingly complex. Many clients are finding they are unprepared for the demands of longevity and health care—especially in contrast with historically low interest rates. 

Do you have planning systems in place to help maximize after tax income—and how do you answer questions about taxes?

What about health care—and especially long-term care?

C. Enabling Teams for Multigenerational Engagement

Gender and family issues challenge training teams as well. The empathy required to fully engage clients—especially "unengaged" spouses and other family members unfamiliar with financial matters—can test even experienced advisors. Recruiting and hiring will be a challenge due to the specialized nature of the skills and experience needed. Get ready to pay for talent!

Are your service and support team adequately trained?

Do they have sufficient time to engage with complex cases that may require additional client education?

D.  Managing Compliance and Monetizing Data

The sheer mountain of client data and compliance requirements can skyrocket costs, with a risk of not capitalize on the data.  Monetizing data profitably will require specific management skills and organizational capabilities as well.

Can your data can be utilized to "digitize" elements of service and overall engagement?

Will you provide alternative service options for clients to "self-actualize" specific needs now being handled by human service teams?

Will you centralize any of your service and provide relief to local resources?

What is the future role of the web for your firm in client engagement?

As innovation creates new business and servicing models, these questions—and many more—may shift the traditional role of advisors. At the high end, the best advisors must get free of service and minutiae so they can focus on clients and new business. If a client needs the services of a top advisor and is willing to pay, why would an advisor do anything else with than meet with new and existing clients?  

At the "lower" end, service and sales roles begin to blur, with automation and self-service facilitating—and accelerating—that transformation: for example, if a client needs help—often triggered by an event such as a death or a significant event in the markets—and reaches out to an advisor or the advisor's firm, should firms provide enough capability for clients to guide themselves to the right activity and service group?

As the wealth management industry continues to transform, answers to these questions and more will be unique to every firm. In the next article, we provide five key factors to help guide and plan your future with success.

Andy Davidson is the sales strategy leader for financial services at Anaplan, a leading software provider for a new age of connected planning. Steve Gresham is principal of The Gresham Company LLC, and has been focused on the transformation of wealth management for more than 30 years. Rohit Mahna is SVP and general manager of financial services at Salesforce, leading the company’s global strategy in the wealth management, banking, insurance and capital markets sectors.