Google Assistant, investing apps, virtual reality tech — clients are using them all. But which new digital tools are vital for advisors? Here’s a breakdown of the eight most-important technologies for 2019 and beyond.
Whether it’s Amazon Alexa, Google Assistant, Siri or Cortana, clients use these virtual assistants to schedule appointments, check account balances or send messages to advisors. RIAs should be able to field these requests. Keyboards and typing could become a thing of the past.
Caveat: digital assistants’ language-processing software is still so buggy that most users prefer not to use these tools for actual financial transactions.
Online reputational tools
As advice increasingly is delivered though mobile, the web and voice-assistant devices, financial planners need to acknowledge that prospective clients may seek out online reviews of their practices as they decide whether, and where, to sign on. You may grouse about how your services shouldn’t be compared like a restaurant on Yelp or Google, but be prepared to manage online reputations with tools that track what’s being said about practices.
Tech providers such as Kredible (which was acquired by AdvisorEngine) demonstrate there’s more to keeping your business’ good name than having an active social-media presence. Expect more reputational tools for the RIA to become available, especially in response to voice-assistant searches.
Fitbits and finance
It’s not just wealth management that’s being commoditized. Clients will increasingly diagnose themselves with a new generation of health and wellness tools. Consider how DNA testing to determine lineage and hereditary health conditions already comes in a box. How can advisors use this new data to supplement their financial planning services?
Many clients use the same mobile device to track their health and their personal finances. An RIA doesn’t have to be a physical trainer — but being able to have conversations with a client on complementary financial wellness and health wellness goals is one way to deepen that client relationship. Get comfortable with asking health questions. Some retirement tools now determine longevity and expected long-term health care needs.
If you have young clients, you know they may well be using micro-investing and trading apps such as Acorns or Robinhood. (Robinhood recently passed the 6-million-user milestone.) These same apps are increasingly offering checking accounts for customers. RIAs should be aware that such apps might be pulling younger clients away from big banks, so it may be worth exploring the various digital-first banking and payment options that clients might use. Many digital-first banking apps offer lower fees, a better digital and mobile experience and even more transparency than a traditional bank.
Being fluent in these options can help an advisor stay current with other tech changes in the larger financial services world. It is also a way RIAs can push back against big banks that are increasingly trying to persuade clients who bank with them into opening retail and affluent-wealth management accounts. (And don't forget to bone up on cryptocurrency options).
VR is real
Until very recently, the case for virtual reality in wealth management — helping prospects visualize potential futures — seemed a bit far-fetched. But a more grounded application of the technology is emerging, thanks in part to experimentation at banks. Some institutions have focused on using VR tech in order to broaden the skills of their own staff.
Training new employees is shifting from a traditional apprenticeship model to VR, with new hires (or advisors needing skills upgrades) engaging in multiple scenarios that deal with client models. This polishes engagement skills with little risk of burning an important client account.
The robo advisor is transforming again, and the key concept in its latest iteration is letting the algorithm manage a client’s entire paycheck. The bet is that automated advice packed with a variety of financial services — planning, insurance, savings, tax planning, credit and debt management, wellness, home buying, loans and even aspirational investing and spending — is cheaper and better than even the hybrid robo advisor approach. The one single offering, maintained and available on a computer 24/7, may prove popular.
Constant monitoring is something no human could do for dozens of clients. While the lack of human guidance remains a drawback for such offerings, a knock-on effect on clients may result, if they expect advisors to know their entire financial life portrait and be accessible at any time.
Some advisors have already added services for their high-net-worth clients well beyond wealth management advice, hoping to deepen the relationship. They don’t just help a client budget for a car, they find the best deal and facilitate the purchase. Expect that special service to spread.
Juggling the various requests may be challenging, so a host of tools for concierge service management are available that can be added to the back end of any RIA practice.
Whether the result of the current political climate or part of the greater trend that has fed ESG investing, some young investors are not shy about injecting political views into their portfolios.
Different screens exist for moral and ethical issues and for faith-based investing, and at least one robo advisor has pointedly created a screen to avoid companies that support President Trump. If demand exists for such politically tuned funds and indexes, tools are sure to follow that help advisors screen for political leaning in a portfolio.