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Rise of the Machines: Part 2

I recently wrote a brief article regarding the human traits which make the value of financial professionals irreplaceable. As a follow up, I would now like to comment on the ability our current technology affords us to superpower the humanity within our offering. 

The advancement of technological capability I have witnessed in financial services over a 22-year career has been nothing short of miraculous. If you are an avid follower of the Kitces tech map, you can view the expansion of available resources monthly. New fintech players and products seem to hit the market daily. This rapid expansion has become both a gift and curse for most financial professionals as they seek to align their service offering and operational model with the proper technology stack.


Red Rock Strategic Partners has witnessed this conundrum firsthand in many of our consulting engagements. Advisors demand the latest and greatest when it comes to tech offerings. In fact, a recent Advisor360 survey notes that 65% of advisors feel their technology needs improvement and 44% have left a previous firm due to what they consider a poor technology offering. Yet, when we investigate the adoption and utilization numbers of the resources provided, they are less than stellar to put it kindly. Advisors are insisting on having access to a quantum computer when they have yet to master a calculator. Additionally, the costs and manpower associated with massive technology overhauls at the enterprise level are prohibitive. Changes of this nature must be seriously deliberated and progress measured in months (or years depending on the magnitude), not days. 

The understanding must be we cannot have everything we want and we must better utilize what we do have at our disposal. Not only utilize our technology better, but do so in a way that powers the ability to provide a more human experience to our clients. In my previous article, I wrote about several key facets to creating a deeply human connection. The following are some of the insights we have received from advisors and technology providers on how they exploit technology to exponentially increase their ability to better engage with clients:

Simple, straightforward communication.  Exploiting the ability of marketing tools to customize client communication is a trend we have witnessed among top advisors. Planning and performance reporting tools allow options to highlight what your clients consider most important. Marketing tools allow you to automatically calendar and send communications to groups of clients with similar issues (i.e. educational savings for clients with young children or social security benefits education to clients nearing retirement). Rarely do we see advisors taking advantage of these options.   

Genuine care and concern for the wellbeing of others. Technology can allow us to provide better care for our clients in a myriad of ways. A major trend we have noticed amongst highly engaged advisors is how they utilize social media not to speak, but to listen. They have turned the ability to follow their clients into a proactive outreach strategy focused on major life events. Coupled with the ability to memorialize this information in CRM to generate ongoing, proactive outreach; several advisors have shared it has changed the game of how they communicate with their clients.

Effort.  In my opinion, the effort piece of the technology puzzle manifests itself in two critical ways. Both items lead to an exponential increase in efficiency and capacity for advisors willing to put in the effort. 

1.       During the early days of COVID, Red Rock partnered with a large wealth management firm to build a strategy for increasing the utilization of client facing resources now that in-person interaction was not an option.  We interviewed dozens of advisors about their tech utilization approach and most conversations included a similar sentiment, “I would use the tool if it did (XYZ).”  90% of those interactions concluded with the advisor learning the tool did in fact have the capability they desired. The first piece of the technology puzzle is to create a client-facing strategy which increased efficiency through automation. Next, is to engage with the specialists at your firm to fully understand the tech stack capabilities and how they align with your client-facing strategy and operating model. Finally, automate whenever and wherever possible to expand your capacity to previous unforeseen levels.

2.       The second piece of the puzzle is to turn the efficiency lens inward on your operating model.  The number one complaint we hear from advisors is, “I spend a majority of my time on administration and compliance tasks.” Again, 90% of the time a technology exists for you to automate or outsource these tasks completely. 

Creating peace of mind. In the previous article we discussed the importance of creating peace of mind for our clients. I would argue creating peace of mind for ourselves is equally important. Speaking with an advisor who is a power user of technology a few months ago, I was in awe of their efficiency and asked for the secret. A simple, three-word answer came back, “automation and cadence.” Exploring this a bit further I learned that no client-facing interaction in this advisor’s business occurred without it being part of a prescheduled cadence. For upcoming client meetings:  agendas, proposals, plan updates, etc. are prepared and ready a week in advance. Statements are automated and sent the same day every quarter. Marketing outreach is segmented, scheduled, and sent at relevant times for meaningful reasons. All of this is driven by calendared CRM tasks delegated to the appropriate team member for completion. There is no ambiguity allowed within the process. This system takes a tremendous amount of foresight and effort, but the reward is a well-oiled machine which allows the advisory team to maintain focus on growing the business and serving their clients. They never worried about anything being missed or overlooked. Isn’t that the peace of mind every financial professional hopes to achieve? 

Providing Optionality.  I appreciate that every financial professional practice is unique is some way.  There is no cookie cutter technology strategy which will solve the world’s problems. The beauty of the current state of financial services is there are a multitude of available options that work well for your business strategy and operating model. The first step is performing an audit of your current tech stack and how you hope to increase efficiency and capacity. The next step is to utilize your internal and third-party partners to help execute this plan. The message we hear repeatedly from technology teams is, “we want to partner with our advisors on long-term strategies, not just help put out fires as the arise.” You have partners available that are ready, willing, and able to help you unlock the power of your tech stack- utilize them. 

Embracing and exploiting technology as financial professionals is critical today, even more so in the future. Efficiency begets capacity and capacity allows us to focus on what is most human in our business:  implementing meaningful discovery, engaging in deeper and broader financial planning, getting to know our clients more intimately on a personal level, and partnering with the talented people that support our mission every day. Your individual humanity is what differentiates you in the sea of sameness. The winners of the future will be those who do being human best.            


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