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VOICES: TD Ameritrade's Nally on tech tweaks that make a big difference

When it comes to technological change, financial advisors no longer compete only against brokers, robo advisors and other advisory firms. Consumers also judge their RIAs against the convenience and responsiveness set by disruptors such as Google, Amazon and Uber.

Here’s the good news: Innovation is not always about upending the existing apple cart. In many cases, it’s about making seemingly small shifts that enhance existing client relationships. By automating routine administrative tasks, RIAs can free up bandwidth for more frequent and meaningful conversations with more clients.

Communication methods considered revolutionary just a few years ago are now commonplace. Take online appointment scheduling, for example.

Though many clients still make appointments by phone, they are realizing online scheduling is as convenient for them as it is for the advisor.

And then there is video conferencing, once reserved for Wall Street’s biggest clients, which lets advisors chat with clients virtually and more regularly, regardless of where they are. After all, if clients are comfortable using FaceTime or Skype with children and grandchildren, they can do the same with their advisors.

The convenience and cost savings are undeniable: reducing the need for travel saves time and money.

That’s just the beginning. Innovations in augmented reality and virtual reality are being tested now to create richer meeting experiences for clients, while also saving travel time and money for RIAs. And virtual assistants and chatbots will help advisors make better use of clients’ time beyond appointment scheduling to include basic account questions.

Tom Nally - TD Ameritrade Institutional
© 2013 Lauren Lieberman / LILA PHOTO, TD Ameritrade Institutional

Advisors are not too far away from a time when they could use a VR headset to “attend” a meeting with a client in one city and with the client’s spouse joining in virtually from a third location.

Along these same lines, video client statements are gaining momentum among RIAs. Advisors now use easily accessible video recording and editing technology to provide context to paper statements and offer clients more personalized walk-throughs of their positions. A year ago, video statements were unheard of, but the overwhelmingly favorable response among clients has more RIAs embracing this new approach to statement delivery.

The most established form of RIA marketing — the client referral — is also getting a makeover.

Sharing one’s favorite experiences with friends and family using social media is the norm today, yet many advisors remain entrenched in capturing referrals through more traditional venues. By shunning the online marketplace, which offers its own analytics and ability to target prospects based on user preferences and zip codes, RIAs miss out on the benefits of targeted social marketing that competitors and others are using to get a leading edge.

It’s not enough to know a bunch of stats about the firm or one-off facts about your clients: the real value comes in knowing how to use data to grow, serve clients and prevent attrition. This is where the appropriate use of artificial intelligence and big data can help advisors increase the interpersonal relationships they have with more of their clients.

It’s not as counterintuitive as it may sound. In every firm, there are a handful of clients with whom advisors have developed close relationships and as a result, know how to connect with them on a very personal level. Unfortunately, finite resources constrain advisors’ ability to do this for every client.

Technology will change this. Soon enough, apps will help advisors connect with more clients on a more personalized level. For example, instead of finding one article on yacht builders that might interest John Smith and another on undiscovered Italian vintners that might appeal to Jane Doe, an AI-enabled tool will show the advisor five different articles to consider sharing with, for example, 50 specific clients based on the clients’ specific areas of interest.

Big data and AI also have the potential to help RIAs allocate their time more productively. For all of the talk about the merits of client segmentation, very few advisors put this idea into practice. There are tools in development that will flag how much time advisors spend with their clients compared against the assets and profitability of those accounts. Advisors could then better assess whether the current level of time and resources is justified.

Analytics could also help flag clients at risk of leaving. Predictive modeling will analyze clients’ activities and interactions, offering RIAs insights on behavior patterns that might lead to client attrition. It will be up to advisors to determine the right next steps to take, whether that means reaching out to clients or choosing to let them go.

Transformation results from innovations both big and small, and good ideas can come from anywhere. This is why TD Ameritrade Institutional recently launched its first-ever technology competition, Innovation Quest, which we hope will attract ideas that benefit RIAs and investors.

While we may not know exactly what the future holds, the pace of innovation is accelerating, and RIAs need to be a part of the change. We want to enable anybody with a great idea to foster new tools and capabilities that can help advisors seize the new day and enhance the ultimate secret sauce — the human touch.

Tom Nally is president of TD Ameritrade Institutional, one of the largest custodians to independent RIA firms.

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