These are unprecedented times for advisors and investors alike, as the impact of the COVID-19 pandemic is upending the global economy, hammering markets and driving extreme volatility. To confront this “new normal,” technology can be one of your most important resources—from running your practice, to managing portfolios and mitigating risk, to helping clients when they need you most.

Tech For Success
Year over year, our Advisor Authority study of more than 1,800 advisors and individual investors has shown that the most successful advisors—those who earn a personal annual income of $500,000 or more from their advisory business, or individually manage a total AUM of $250 million or more—adopt more technology and invest more in technology to enhance their practice’s profitability, achieve scale and create a competitive advantage.

Likewise, Cerulli Associates’ recent report on “U.S. Advisor Metrics 2019: Ushering a Digital Transformation,” also revealed that larger practices are most likely to be heavy technology users. More than half (52%) of practices with $500 million or more in AUM are heavy users of technology, while only one-fourth (26%) of the smallest practices, with $25 million or less in AUM, are heavy users.

With an eye to the future, we compared how Millennial advisors and their Boomer counterparts prioritize technology. According to our fifth annual Advisor Authority study, conducted in 2019, nearly three in ten Millennial advisors (29%) said that adding new technology was the number-one thing they would do over the next 12 months to enhance the profitability of their practice—roughly three times more than Boomer advisors (11%).

For the success of your practice, now and in the future, what are three things you need to know about tech?

1. AI is your ally—not your adversary. Artificial intelligence (AI) has dominated headlines and disrupted the status quo. Once the exclusive domain of large institutions with deep pockets, and leveraged by consumer giants such as Amazon, Apple and Google, AI is becoming integral to the advisor’s practice. Asked to name the top-three tech solutions they planned to add, profit-focused millennial advisors were twice as likely as boomers to say artificial intelligence (34% vs 17%). Likewise, successful advisors were more likely than all other advisors to add AI (41% vs 27%).

Some say AI is the enemy, poised to take your job and poach your clients. Even a recent study from the Brookings Institution suggests that AI can replace advisors’ guidance. But clients can have strong emotions when making important financial decisions—especially when confronting tough markets. Right now, investors are turning to advisors for stability, to cut through the noise and protect them from emotional investment decisions. There’s no doubt AI is important.  But there’s no way it can replace the human touch.

What AI can do is to help you assess big data from disparate sources, arrive at decisions efficiently, with a greater certainty and success. Where it can help you most, according to successful advisors in Advisor Authority, is to better understand client’s current needs and behaviors—and predict their future needs and behaviors—so you can solve their most complex problems with personalized, holistic financial planning. As you look to attract and retain new clients, AI can also help you make informed decisions for results-oriented marketing.

Leveraging AI to put clients first is one of the best ways to drive greater growth and profitability. In fact, roughly two-thirds of all advisors said AI would give them a competitive advantage.

2. Tech unlocks unique customer experience. When it comes to putting clients first, a unique customer experience is essential to unlock client acquisition, satisfaction and retention—the lifeblood for your firm’s growth and profitability. From the moment a client visits your website, opens your first email or schedules their first face-to-face meeting, technology has been critical at almost every touchpoint.

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