High Tech; High Touch
In the 1980s, futurist and Megatrends author John Naisbitt predicted that business and society would evolve astoundingly on both the technology and social fronts. The big winners in business would be those that mastered a high-tech/high-touch approach.
For financial advisors today, it’s imperative that the high tech (think fintech) aspects of the business be integrated with the high touch components such as listening, emotional intelligence and being able to facilitate family conversations about money.
According to Steve Gresham, managing director of The Execution Project and Next Chapter (which partners with Financial Advisor magazine), savvy advisors need to take advantage of new time-saving technology, which can afford more time to focus on value add “high-touch” skills. “The best advisors have learned to listen carefully, acknowledge concerns, identify points of friction and help the clients find a common path. It is the most valuable service they can provide.”
The Challenge Of Adoption Of New Technologies
The recent pandemic forced many advisor firms to adopt new technology sets and pivot in ways to help serve the needs of their clients. From Zoom videoconferencing to secure electronic signatures to AI-fed personalized content, financial advisors spent nights and weekends learning new ways of doing business—aided by technology.
In some cases, they were learning brand new tools and in others, finally using technology that they had access to, but had never put to use.
“Adoption is really the best way to measure success for advisor technology,” says Kim Mackrill of Milemarker, a Mount Pleasant, SC-based Integration as a Service (IaaS) company that delivers a fully managed data integration platform for financial services companies.
“It's quite common to run across firms who have a lot of tools only to discover that they are barely using any of them. Understanding how to integrate them with the rest of your technology stack is one thing. Understanding how to use them every day effectively is another, but both are significant,” she adds.
Seeking Ways To Help Advisors And Clients Pull The Right Levers
“One of the key reasons advisor adoption has been challenging is software has historically been written by techies, not advisors, says Jack Sharry, EVP and CMO of LifeYield and host of the Wealthtech on Deck podcast.
“Tools are available that develop personalized recommendations—think eMoney, Riskalyze or LifeYield, but there’s little, if any, integration that identifies specific implementation steps,” says Sharry. “For advisors to add the most value, they need to see and act on a client’s full financial picture. The industry calls this a Unified Managed Household (UMH). What is now becoming available is data integration across all applications, accounts and products so the advisor can operate the key levers that improve financial outcomes for the client and the advisor—managing cost, risk, and taxes in a coordinated way.”
According the Sharry, managing cost, risk and tax goes from being discrete tools via single sign on (SSO), to being integrated and coordinated as critical pistons in the engine, all via API (applications programming interface).
“Cost, risk and tax don’t go away but coordinating these elements needs to be synthesized in a way the human mind just can’t do,” says Sharry. “Only sophisticated software capabilities working together with consistent data can determine how the benefit is quantified. This then determines the prioritization and sequence of the next best actions that a client should take. We need better ways to help the clients execute on the recommendations. Today, it’s disjointed. Software is now available to enable the tech stack to connect the dots, quantify and prioritize next best actions, and creates a win for clients and advisors.”