Technology-enabled solutions, like robo-advisor platforms and investment-only solution options, have become the answer for wirehouses looking to reduce cost and deliver basic, nearly commodified services at next to no cost. Merrill has had Edge for some time, and the recent UBS acquisition of Wealthfront, a leading automated wealth management provider, illustrates that this trend is only accelerating.
The biggest players in the wealth management space will continue to shift toward a service center model, where the financial advisor does not play a critical role.
And while this may work for many clients, especially those who want to set it and forget it or have much more time before retirement, the industry commodification ignores one of its most valuable attributes: personalized advice.
Tech-enabled solutions allow larger firms to serve more investors, but they don’t solve individuals’ complex financial planning needs approaching high-net-worth status or retirement. Clients looking for advice on tax management or estate planning need more than an algorithm.
Advisors should look for a partner that enables them to serve these specialized needs, creating value for their businesses as they support their clients’ long-term financial goals and transitional wealth planning.
Technology is a Tool
As critical as technology is in creating an exceptional client experience and improving efficiencies, nothing can replace a trusted independent financial advisor’s relationship with a client.
Independent advisors earn the loyalty of their clients by developing detailed financial plans with realistic goals, implementing creative investment strategies, monitoring progress and course correcting when necessary. This service adds value and deserves to cost more than the options offered by the impersonal mega-firms.
Improved back-office and client-facing technologies have leveled the playing field between the large-firm advisors and independents. This balance gives advisors the ability to attract prospects from a position of strength in a competitive prospecting environment.
The Value of Relationships
Top advisors and teams will continue to move out of wirehouses and into independent and RIA channels, realizing it’s the best way to care for their existing clients and gain new ones. Empowered to build highly personal relationships, advisors can invest their time to understand clients’ needs, leading to more detailed financial plans and better outcomes. The bespoke nature of this service gives financial advisors the chance to support a client’s specific goals and
dreams – not just sell a preferred solution or proprietary product.
Technology will continue to drive innovation in our business, but it will never replace a personal connection or a nuanced financial plan. Without question, technology makes these processes easier. Still, working with a professional financial advisor is the best way for clients to stick with their plans, especially in times of economic and market uncertainty.
The best financial advisors know that they need the strategic flexibility to foster trust and relationships with clients to deliver best-in-class services and better results. Low-cost and low-value commodities will replace others who continue to rely solely on the latest technology and
Written by Thomas Goodson, President/Founder of The AmeriFlex Group®. Mr. Goodson considers himself “the advisor’s advisor.” With over 30 years’ experience providing knowledge and expertise in Transitional Wealth Planning to businesses, non-profit organizations, families and individuals, Mr. Goodson brings industry-leading thought to his development of TAG, working tirelessly to help his partner advisors reach their business goals.