The wave of technology that has allowed advisors to communicate with clients in myriad new ways doesn’t eliminate the need for old-fashioned face-to-face contact, observers say.
“Meeting in person is absolutely essential,” says Karim Ahamed, a partner at HPM Partners in Chicago.
Much has been made about millennials’ gravitation toward technology and online communication in lieu of personal contact, “but you can’t develop a personal relationship by email,” he says.
“Technology is a tool, not a substitute for personal interaction,” Ahamed says.
“As you are working with the next generation, you want to communicate ideas about planning and investing,” and that requires physical meetings, he says.
Face-to-face meetings facilitate better interaction and more complete dissemination of information by advisors to clients, says Tom Fredrickson, a CFP and principal of Fredrickson Financial Planning in Brooklyn, New York, which is part of the Garrett Planning Network.
“The brain is geared to the face,” he says.
“If people see you, they will be able to read you better and vice versa,” Fredrickson says. “There’s much more to communication than the verbal and keyboard elements.”
More issues can come up in person than would over the phone or online, Fredrickson says.
“Sometimes, I’ll meet someone in a semi-social environment, and they might mention that a child’s wedding is coming up, which will require a large expense,” he says.
So what about robo-advisors?
“I don’t think robo-advisors will take business away from human advisors,” Ahamed says. “That might work for clients with low levels of assets.”
But HPM advisors need to meet with clients to explain nuances in ways that they can understand, Ahamed says.
“You can’t get around that by hiding behind a computer keyboard,” he says.
Online questions from a robo-advisor might not hit the important points for a client’s investment portfolio, Fredrickson says.
So how often should advisors meet with clients?
With smaller clients, HPM advisors meet perhaps once or twice a year in person and then follow up by phone quarterly, Ahamed says.
With larger clients, HPM advisors meet at least quarterly.
To be sure, “we are constantly at clients’ service and will respond by e-mail,” Ahamed says.
“Then if it’s more complicated, we will talk on the phone and meet if need be,” he says.
Email is ideal for solicitation and sending specific information, Fredrickson says.
“But I can’t recall an instance where email substituted for a meeting,” he says.
This story is part of a 30-30 series on how technology is changing your practice.