Consultants have always said that the biggest strength of financial advisors is their ability to forge relationships and build human connections, and they’ve told advisors to play to those strengths.
And yet advisor technology has gotten more human as time goes on. Now tech wants to get in on that part of the business too, helping advisors with the human side of things.
Take Bento Engine, an automated advice engagement platform that helps advisors attend to human relationship matters. For example, the platform will use CRM data to determine which clients and prospects are getting close to age 50. Then it will prompt its advisor users to send their clients messages and content through email on things like catch-up contributions to their retirement plans. The platform also creates talking points for phone calls, PowerPoint presentations and the like.
Bento Engine’s CEO, Philipp Hecker, said advisors are starting to realize that technology can do more than help advisors with things like products and back office functions. “Firms and advisors are increasingly realizing that where it matters most is where advisors engage with clients and prospects. While the human element continues to matter greatly, advisors and firms are realizing technology can amplify and scale those human interactions in meaningful ways.”
Even a system that reminds clients about their catch-up contributions can pay off big for advisors, he says
“Shockingly, only 10% to 15% of Americans that could avail themselves of making catch-up contributions actually do so,” he says. “So 85% or more Americans are leaving tax-advantaged dollars on the table … oftentimes because they do not know about the opportunity, or their advisor does not address the lever or strategy at the appropriate point along the way.”
Plain demographics are also going to be a factor in the adoption of technology, Hecker says. The number of advisors is not growing meaningfully, yet the need for advice is. That’s going to put an increasing workload on individual practitioners.
“Firms are incentivized to increase the load ratios of their advisors,” says Hecker. “The only way to do that is to add smart technology that provides efficiency and scale to the advisory component that the advisor offers.”
Advice-engagement technology helps advisors with business development by improving their conversations with prospects and deepening their relationships with existing clients, he says.
Saving Time And Money
So what if somebody can’t afford a big, comprehensive plan? What if they just want somebody to help them quickly solve a problem?
There’s a gadget for that too.
Reese Harper is the CEO of Elements. A platform somewhat like Bento Engine, Elements instead is focused on brief, problem-solving interactions so that advisors can meet clients and prospects at their point of need.
“To do this job,” he says, “you have to find ways to lower the cost of advice. It’s 15 hours [per month], average, to onboard a client into a traditional, holistic planning model, according to Michael Kitces’s last research. That essentially eliminates 98% of the market from being able to afford a financial advisor.”
The important thing is to move clients and prospects into financial planning while removing from advisors the responsibility of collecting, organizing and analyzing data, he says.
Elements was inspired by medical diagnostics. Just as a doctor might look at systems within the body using certain metrics, Elements focuses on financial “systems” within a prospect’s or client’s life using certain metrics, says Harper. It also takes a measure of their values and concerns along the way.
“We determine from someone’s values and purpose that we already have in the system and their financial vital signs what the next most logical step would be for them to take in their life. That’s not often the best step to take to maximize wealth, but a step to get more in line with their values and purpose, using their vital signs.”
By using the troves of data advisors have stored in their client relationship management software, new technology is finding better and more timely ways to connect with clients and prospects, says David Mehlhorn, vice president of business development at Redtail Technology, a CRM acquired by Orion last year.
“People are more than their demographics,” he says. “They’re also their interests, dreams and fears—all those types of things that traditionally come up a bit in the financial planning process.” Those human characteristics are starting to appear in the technology stack, he adds, “and users are feeling the positive impact of factoring that kind of stuff into everything they do. They differentiate more.”
Late last year, Orion announced Redtail Campaigns, a new automated marketing service for advisors that combines the power of Redtail Technology’s CRM, Orion’s legacy Market*r platform (now subsumed into Redtail Campaigns) and content made available by Snappy Kraken. Redtail Campaigns not only integrates with Orion’s technology suite, it also can plug directly into “Protect, Live, Dream,” a bucketing asset allocation system designed by behavioral finance specialist Daniel Crosby at Orion. The buckets in the system, Orion says, divide a client’s assets according to whether they are providing safety, funding a lifestyle, or helping the client achieve aspirations.
Improving The Client Experience
For a long time, technology focused mostly on how to make life easier for the advisor or the home office, says Mehlhorn, and a lot of value was found in making people more efficient and allowing advisors to save time on processes.
Missing from the equation was how technology benefited the client directly. So technology providers began suggesting they could save advisors time by freeing up more for them to spend with prospects and clients, thus improving the end user experience, too.
“While that is still important, there’s a lot more focus on technology directly enhancing the client experience, so not only are we making life better for the financial advisor, we’re also creating a better experience,” says Mehlhorn. “Client portals are now something you have to have, and that will continue to evolve.”
He adds that texting is one of the next frontiers for better client service, as most people say it’s their preferred form of communication, finding it less disruptive than phone calls, email or social media.
“That’s the way technology seems to be going,” Mehlhorn says. “Thinking more about what the client needs are and how they want to be served. There’s a greater shift to those types of tools, features and benefits.”
Hecker asserts that clients and prospects now expect to have an Amazon- or Netflix-like experience with their technology—they want a personalized, high-touch approach melding the relationship to an advisor with the kind of services and tools big technology companies have come to offer.
“Advisors serve clients in very personalized and proactive ways—so it makes sense to integrate Netflix-type pattern recognition, Amazon-like patterns, these buyer-smart technologies into the wealth management domain,” he says.