Covid-19 continues to challenge every aspect of our lives—our health, our homes and the way we work. The business of providing financial advice is no exception. While the pandemic is driving up the demand for advice, it’s also posing new challenges for advisors and financial professionals—and changing the way they do business.

Advisory firms, from the independent one-person office to the multi-billion-dollar wealth management practice, are re-tooling operations as social distancing and working remotely becomes the new normal. What do you need to know about leveraging technology to combat Covid’s impact and protect profitability so you can grow your practice in the new year ahead?

The Nationwide Retirement Institute’s sixth annual 2020 Advisor Authority study of more than 2,500 advisors, financial professionals and individual investors, has uncovered valuable insights that can help you stay connected, retain satisfied clients and attract new ones, all while keeping the pressures of the pandemic in check, to help keep your firm profitable.

Covid Drives Demand For Advice
Our most recent Advisor Authority study shows that investors’ number-one financial concern is losses in their portfolio due to the Covid-19, with protecting their assets a very close second. They see the pandemic as the top driver of volatility and also the number-one threat to their portfolio. The good news: while Covid-19 is driving investors’ financial concerns to new levels, it is also driving the demand for guidance and advice.

According to the Nationwide Retirement Institute’s Covid-19 survey conducted in April 2020, more than half of investors (52%) say the Covid-19 pandemic made them realize that they need help managing their finances and investments to succeed in the future. Nearly half of investors (49%) are now relying on an advisor or financial professional more than ever. And more than a quarter of investors (26%) engaged an advisor or financial professional for the first time due to Covid-19.

Pandemic Puts Pressure On Practice Profitability
Just as Covid drives investors’ concerns, and they are seeking financial guidance at a rapidly growing rate, the pandemic is also putting added pressures on advisors and financial professionals, including concerns about the profitability of their practices. According to our most recent Advisor Authority, in 2020 only 54% of all advisors expect profitability to increase, compared to 72% in 2019 and 84% in 2018. A 30-point drop in just two years. Meanwhile, among those who expect profitability to decrease, the negative impact of Covid-19 is the number one factor, cited by more than two-thirds.

 

When asked to name their top practice management concerns related to Covid-19 over the next 12 months, advisors and financial professionals say their health and safety is number-one on the list, followed closely by a decrease in profitability. At the same time, they are taking action and putting technology to work. As our research shows, providing a digital experience and self-service tools for clients, followed closely by providing digital “work-from-home” strategy for employees are also among advisors’ and financial professionals’ top five practice management priorities related to Covid-19.

In fact, when asked what they will do to enhance profitability, year over year advisors and financial professionals say that adding new technology is consistently among the top five factors. With the pivot to social distancing and working remotely, the pandemic has expedited the industry’s adoption of technology. Digital solutions are an important ally to combat Covid’s impact and keep your business going strong.

Staying Connected—Even At A Distance
Year over year, Advisor Authority has also shown that advisors, financial professionals and investors say face-to-face meetings are the most important form of communication. And to ensure a strong advisor/investor relationship, trust comes first. While social distancing is crucial for reasons of health and safety, not being able to meet in person presents its own challenges. Technology provides a solution.

According to our latest Advisor Authority study, nearly 4 in 10 advisors and financial professionals say the top way technology will help them better serve clients is by enabling them to meet remotely. Virtual meetings—such as FaceTime, Skype or Zoom—are a way to combine tech with the human touch. It’s clear that nothing can replace face to face. And recently there are more refences in the news to “virtual meeting fatigue.” But until we can put social distancing behind us, and safely meet in person again, virtual meetings give you a way to connect with clients, maintain more personalized interactions and reinforce your trusted relationship.

After decades spent perfecting our own hybrid wholesaling model, one thing we’ve learned is that consistency matters. Maintaining the right cadence of just enough emails, phone calls and virtual meetings will help your clients know that you understand their needs and you’re there for them—without overwhelming them.

We’ve also learned that it’s more effective to educate than it is to sell. So show your clients that you understand their need—and their top concerns. Whether you are protecting their portfolio from losses due to the pandemic to help them accumulate more for retirement, or protecting them against outliving their savings with a plan to generate guaranteed retirement income for life, clients rely on your expertise.

Be sure that you are teaching them the value of having a long-term financial plan to manage through the challenges of a slowing economy and turbulent market. As Advisor Authority shows, more than 9 in 10 investors say that having a plan for their investments helps them feel in control, and helps them weather tough times, even if they can’t plan for everything.

Solutions To Better Serve Clients
This new normal of working remotely and connecting with clients at a distance, means finding new ways to safely and securely complete transactions. As Advisor Authority reveals, advisors and financial professionals say that “e-signature” solutions top the list of technology that they are most interested in integrating into their practice over the next 12 months, and are also the number-one technology that will help them better serve clients over the next 12 months.

With clients’ concerns about losses due to Covid’s impact running high, and the need for protecting their assets top of mind, tools for risk management also top advisors’ and financial professionals’ technology wish list and rank high among the technology that will help them better serve clients. Likewise, our study shows high demand for mobile websites and apps, as well as interactive websites and client portals. So if you’re looking for ways to optimize your practice, and enhance your clients’ experience, these should be part of your consideration set.

Bringing On The Next Generation Of Clients
Year over year, Advisor Authority has shown that investors consistently rate years of experience and personalized holistic planning among the top factors influencing their decision to work with an advisor or financial professional. But when it comes to attracting the next generation of clients, especially millennial investors, technology becomes more important. In today’s digital economy of instant online access to everything, millennials are looking for an anytime/anywhere service model—even from their advisor or financial professional.

If you want to attract these “digital natives,” you’ll want to use the digital tools they use, in the places online where they want to be met, and providing the customer experience they’ve come to expect. That’s why the majority of advisors and financial professionals say they have changed their strategies to attract the next generation. Their top solutions include increased use of mobile technology, increased use of social media and enhancements to their current website or client portal.

Many younger investors want financial advice packaged with a user-friendly interface on the front end and seamless intuition behind the scenes. Artificial Intelligence can help you create this kind of customer experience offered by retail giants who’ve already earned millennials’ business by speaking their “online language.”

A Franchise For The Future—Whatever Comes Next
One undeniable impact of the pandemic is that we’re all using more technology. And it’s changing the norms for the way we live and work, at a faster pace than ever before. Even after a vaccine and other therapeutic solutions for managing the pandemic are rolled out widely to the public, and the need for social distancing can safely be eased, many experts predict that working remotely and online experiences of all kinds are here to stay in a much bigger way. 

You and your clients will continue to confront many unknowns in the months ahead. And there’s no surefire way to predict the future. But not investing in technology would be a missed opportunity when preparing for the future of your firm. Providing a digital experience and self-service tools will help you attract and retain more clients—especially the emerging market of millennial investors. A digital work-from-home strategy will help you create a workplace that will help you attract and retain new—and younger—talent. And by investing in the right technology, you can create a more efficient, productive and scalable practice, and build a more valuable franchise for the future, whatever comes next.

Craig Hawley is head of annuity distribution at Nationwide.