The technological revolution in financial advice

Technology has revolutionized nearly every industry.  Nowhere is that more evident than in medicine. A time traveller from the 1990’s would hardly recognize the technological sophistication of a contemporary doctor’s office. Physicians get medical records on tablets, looking at a patient’s entire history with the swipe of a hand. Patients track their vital signs and deliver round-the-clock health information with smartphones and fitness trackers. Information flows freely between patients and doctors, as they work collaboratively toward health solutions.

Even the fee structure is changing. Rather than paying per visit, many patients now see concierge doctors who charge a flat monthly fee and provide 24/7 access to health information. Artificial intelligence is replacing human intelligence to deal with routine medical problems, providing that level of availability. It doesn’t take a genius to diagnose a flu or cold, after all.

These advancements are driving down the cost of doctor’s office visits while increasing patient involvement in decision-making.  Doctors see more patients and use time with them more effectively. They’ve seen their role shift from health manager to health general contractor.

It’s not just doctor’s offices that are embracing this change. Consumers are relying less on advertisements to make their decisions and using collaborative review sites like Yelp to inform their choices. They expect not only exceptional products but also top-flight educational materials on how to use those products to the fullest. At the same time, companies have to implement technology intelligently to keep up.

The time is coming for the financial services sector to embrace this change. Is your financial advisor working with you the way you expect? Here are 3 signs your advisor embraces the changes of the 21st century to deliver modern, effective service.

1) Technology and education are at the forefront

Any advisor can devise an asset allocation and implement a plan. Increasingly, that’s not what clients want. They want the ability to influence and collaborate to make the plan, then play an active role in revising it as their life circumstances change.

A 21st century advisor makes that experience the goal of every client interaction. Instead of showing clients a plan, advisors show clients tools and how to use them. Advisors become the guide on the side, not the sage on the stage. There is no “big reveal” of a final financial plan, just an ongoing conversation about the client’s needs and how to meet them.

Advisors are not only tech support in this view. They also provide guidance and interpretation. What does it mean, for example, to retire early?  What savings goals does a client need to have? What ROI could they realistically expect? What tools can help them chart their progress? These are the kinds of questions advisors are uniquely suited to answer.

2) 24/7 access

Clients don’t want access to their financial plan and information during business hours only. Sometimes, at 3 am on a Saturday, some people will wake up with a burning question about their finances or a brilliant idea about their financial plan. They want their advisors to be there with them.

Obviously, no advisor can actually have that level of availability and stay sane, let alone serve enough clients to stay in business. That’s where those technological tools come into play. Empowered clients who have been educated on the use of their tools can answer their own questions and solve their own problems using techniques they learned from their advisors.

3) A sustainable business model

Smart financial advisors recognize that the days of commission-based paychecks are coming to a close. Investors who want to be actively involved in their financial plans aren’t willing to take a high-fee product for the sake of an advisor’s bottom line. 21st century advisors know this, and are shifting their business plans to meet the needs of those savvy investors.

At the same time, teaching clients to use a trading portal and some data visualization tools and walking away is an easy way to lose clients in a hurry. Forward-thinking advisors need to develop a product that investors feel comfortable paying a continuous fee for. They’ve found ways to keep their advice fresh and relevant, so that consumers know what they’re paying for.

The technological revolution is coming to the financial services industry.  It’s a question of when and how. Advisors can take a proactive stance and start building their businesses to take advantage of the amazing tools available to them, or they can watch their competitors do the same. The challenge is to begin thinking of the experience from the perspective of the client.

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