For all the talk of robo-advice as the next frontier of automation for financial advisory firms, the reality is perhaps even more important but less immediately glamorous. While becoming a “bionic advisor” by adding robo capabilities may eventually prove to be a game changer for many independent advisors, the fact is that many practices still have more obvious—and much more valuable—opportunities to increase their operations’ efficiency by automating certain key processes and practices.
As a bonus, many of these opportunities are “low-hanging fruit”—easily implemented changes that produce quick, outsized benefits for advisors who capitalize on them. The fact that independent advisors enjoy more flexibility, especially relative to their wirehouse peers, only enhances their ability to make practice improvements, since they can work with multiple vendors and implement their own technology platforms (within their respective broker-dealers’ parameters).
Some of these ideas will sound familiar to advisors, and may even be on the list of practice upgrades they hope to make “someday.” But given the pressures created by the fiduciary rule, which has put a premium on understanding the needs of clients and making best-interest recommendations, advisors should work now to simplify activities that divert their attention from building that understanding.
These challenges were discussed before our annual national conference held this week in La Jolla, Calif., where a group of top advisors, industry thought leaders and firm executives came together during a pre-conference session to discuss top ways to automate practices without having to become a full-fledged bionic advisor. Here are the top three ideas they came up with:
1. Digital Reporting And e-Signature: Going The Last Mile. Even in 2017, with all the emphasis that has been placed on innovative “fintech” solutions in our industry, there are still investors across many advisors’ books who insist on conducting business via paper documents, both for receiving statements and for providing signatures on various forms.
Before the fiduciary era, advisors could afford to make exceptions for these clients, continuing to send them paper statements and paper copies of important account documents. Going forward, however, advisors will need to use their time as efficiently as possible to satisfy regulators while providing exceptional service to every investor in their books. Advisors who may have been putting off some difficult conversations need to educate these clients on why going digital now makes sense.
2. Asset Aggregation Tools: No Longer Just ‘Nice to Have.’ Going hand-in-hand with the need for full digitization, tools that provide advisors with an aggregated view of their clients’ various assets across multiple institutions will soon make the leap from “convenient option” to “absolute necessity” as demands on advisors’ time become more intense.
Advisors across the industry still frequently report having to spend significant time with clients who have assets held outside the advisor’s institution in order to develop a comprehensive view of those assets and, accordingly, an accurate picture of the client’s financial needs. This kind of time drain should be easily avoidable given the asset aggregation tools that are available to advisors and broker-dealers today.