With the wide array of tools, technologies and devices out on the market, financial planners certainly have plenty of opportunities to use the latest and greatest in their businesses.
Many planners rightly make large technology investments in their businesses, but Steven Copeland, the principal of Safe Harbor Financial Planning based in Bronxville, N.Y., warns that many of these may turn out to be counterproductive.
“Any new technology that tends to place barriers between planners and their clients should generally be avoided,” he says.
Some planners have implemented online capabilities to serve an increasingly tech-hungry public. But how much tech is enough – and does too much get in the way of good planning?
The financial marketplace is not monolithic, but very nuanced, encompassing different cohorts of investors. Copeland observes: “Some investors might be fine with online investing; some aren’t. It might make sense for those starting out, who don’t have a lot of money to spend on fees and who don’t have substantial assets. But it’s difficult to generalize; a young person who’s on a management trajectory and is a good saver might have a different viewpoint. When you start to get into the wealthier segments with at least $500,000 in assets, the worry rate goes up. Clients want someone to talk to.”
Copeland notes that wealth management goes way beyond portfolio management and includes estate, tax, insurance and retirement planning as well. And a true wealth manager and trusted advisor can’t be provided by an automated system.
“Completely web-based financial planning may be appropriate for the mass market, but in my experience, high-net-worth clients may not want to talk to a computer. Most of these clients want a human being sitting across the table,” says Copeland, whose firm focuses on the mass affluent segment with assets of between $500,000 and $4 million. “I think that even my younger clients want someone who can pick up the phone and answer their questions.”
His advice: “Keep an eye on the competition, watch what they’re doing and incorporate best practices where they make sense. Invest intelligently in technology, but don’t let the technology interfere with the quality of the interpersonal relationships you have with your clients.”