How advisors can adapt their service model to a digital experience

By Don Breber | 8 June 2016

The financial advising service model of the past has relied upon client relationships and word of mouth. “Storing documents” meant shoeboxes, filing systems, and physical safeguards. However, in order to attract and retain clients today, advisors not only have to keep up with current trends, but also look ahead to where the industry is moving.

It is hard to ignore the hype around the digital revolution in financial services. As with anything new and trendy, many of us cannot help but wonder if it is too good to be true. Are the early adopters of new FinTech tools really reaping the rewards? The answer is an overwhelming yes - dollars and digital go hand in hand. Utilising these digital tools have proven to be beneficial for both clients and advisors in every step of the client journey.

Attracting prospects

How advisors provide services affects the happiness or their clients, and happiness determines client retention. In general, we can imagine a prospect finding a new advisor through an advertisement they saw, walking in off the street, or (in most cases) hearing about them through word of mouth.

Current and future generations are far less likely to call by phone and are more likely to reach out through social media or a company website. The way in which people have altered their means of communication has led to an ever-changing need for how they receive communication.

Word of mouth continues to be the main method of attracting new clients and may become even more important for finding new prospects. As the prevalence of online automated financial planning tools increases, potential clients will become more hesitant to interact with industry professionals unless they have been provided with assurance from a trusted friend or colleague about the integrity of an advisor.

However, word of mouth has dramatically changed and has become much more digital. Communication with both prospects and clients is an increasingly social experience, which is why a social presence is so necessary for the service model of a firm or advisor.

Serving and retaining clients

The digital experience does not just impact the attraction of new clients, it affects the retention of existing ones. Thinking in terms of client workflow is a perfect example of this. In the past, clients would gather their documents, bring them to an advisor in a box or folder, stay at the office for a few hours while data was manually entered into a system, have their financial situation reviewed, and be handed a printed financial report at the end. This flow continues to work with some clients that are used to it; however, for new and future clients, advisors must up their digital game.

Making the financial planning process easy for new clients will greatly influence their happiness. The digital experience you provide will benefit you and your clients in a few ways:

First, instead of a bringing in a shoebox, clients can upload documents online into a client portal. Taking that a step further, some sites allow users to simply link, or aggregate, their accounts without any further data input. This minimises the amount of work that either you or your clients must do—something that you can both surely appreciate.

Second, the financial review process has evolved from a strict income/net worth review to a much more comprehensive goal-based study. Just focusing on one goal? That is easy, just use that particular module. Software is becoming increasingly configurable, which means that if you have conducted an effective fact-finding process, you can even configure your systems for the needs of the client before even meeting with them.

Finally, the delivery of advice and results of your review has been changed by the digital age. “Paperless” is no longer a buzzword – it is a reality. Content is increasingly being delivered via phone or tablet, making it much easier for clients to access all the information they could ever want.

“Generation D” is all that matters

Over 90 percent of digital advisors in a study done by Fidelity said that digital tools in their practice increased client engagement; allowed them to be more accessible to clients; and most importantly, enhanced the services they are able to provide. 

As for the clients themselves, they seem to agree that digital tools enhance their advisory relationships. While most wealth management studies in the past have segmented clients based on net worth and/or age, the digital revolution has shown us that Generation D (as in Digital) is all that matters. Across all ages (Millennials, Gen X/Y, Baby Boomers) and regardless of net worth, everyone is going digital. For example, the 2014 Capgemini World Wealth Report found that two-thirds of high net worth investors, who on average are more advanced in age, expect to run most or all of their wealth management relationships digitally in five years. 

Whether it is attracting a new prospect; reaching out to a new client; or delivering a report, recommendation, or any other kind of communication, the digital revolution has transformed the advisor’s service model from a physical one to a digital one. 

By Don Breber, Product Director, Advicent Solutions. 

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