Trending
Advisors are familiar with fintech in investment parlance. Think stocks such as Block (NYSE: SQ) and PayPal (NASDAQ: PYPL) and the related funds. While its certainly taken some lumps this year, the fintech revolution remains in its early innings and the investment implications are substantial.
What many advisors may not realize is that when they bolster technology in their practices, they are participating in the fintech revolution. After all, advisors are in the finance business and the related tech is, well, fintech. Smart advisors know upping their tech capabilities is essential when it comes to attracting and retaining business from younger, tech savvy clients.
For many tech-proficient clients, advisors’ tech competencies and offerings are the deciding factor in whether or not to start or extend the relationship. Or in more simple terms, yes, technological investments can pay substantial dividends for advisors.
Of course, wider embraces of technology can be daunting for advisors, particularly those that have been in business for decades. With that in mind, there are a small amount of areas where advisors can allocate their attention and tech dollars to potentially drive top and bottom and line growth.
Fintech Areas of Emphasis for Advisors
One area where advisor tech is making significant strides is on the prospecting front. Artificial intelligence (AI) is contributing to that evolution, bringing with it new efficiencies.
“New tools in the market speed up the process. For example, they can proactively identify potential clients who fall within required criteria. Several data aggregators put a lot of work into building the systems, which rely upon algorithms and AI to reveal connections. Simply having a list of the 10 best prospect calls to make each morning can lead to greater success over time,” notes FactSet’s Jon Russell .
An efficient AI-based prospecting system can scour professional and social media profiles, helping advisors identify credible would-be clients while saving time and money. On a related note, technology investments are also pertinent when it comes to relationship maintenance.
“Although a client’s LinkedIn profile allows you to view all of their contacts (if you’re connected to the client), it can be difficult to uncover true connections versus an acquaintance from a business conference 20 years ago,” adds Russell. “The same companies that aggregate data from myriad sources can also identify the relationships your clients already have, enabling you to tap into a direct connection to the right person.”
Client communications and proposal development are two important and seemingly simple areas where advisors can leverage tech for improved efficiencies and better client satisfaction.
Thinking Outside the Box
Admittedly, “thinking outside the box” is overused corporate speak, but when it comes to advisors and technology, it’s advice worth remembering. In the current environment where many clients are more tech-advanced than advisors, unique approaches and efforts will be rewarded.
“The expansion of digital prospecting and relationship intelligence platforms for wealth management is not just a response to changing demographics within advisor and client worlds. It’s a necessity to stay competitive in an increasingly digital environment and evolving client needs,” concludes Russell. “By embracing new tools, advisors become more proactive while strengthening current client relationships and their approach to prospects. They also can spend their prospecting time more effectively and efficiently to serve clients and grow their books of business.”