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“Cheers,” the iconic TV series ran from 1982 to 1993. The lyrics in the intro included “Sometimes You Want to Go Where Everybody Knows Your Name.” The sentiment expressed in the song makes the case for the personalized service a good financial advisor can provide.
Years ago, an excellent product area head at my former firm positioned the ideal relationship in the future as “high tech, high touch.” Technology today is taking us towards “high tech, low touch.” What might that look like?
Let us take a look into the distant future. We will set the dial on our time machine to 2025. (Yes, that is next year!) It will be possible to:
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Invest in the stock market through robo advisors using index funds aligned to an asset allocation model.
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See a doctor onscreen through a virtual appointment.
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Self file tax returns online, adding documentation attachments when necessary.
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Shop for mortgage and CD rates without ever entering a bank branch.
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Order groceries online, preventing the need to step into an actual store.
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Order meal kits online, eliminating the need to shop for groceries.
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Receive by mail prepared food you heat in your toaster oven by scanning a QR code.
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Attend spin class at home without visiting a gym.
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Create letters, thank you notes and birthday cards using AI technology.
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Attend religious services online by accessing a YouTube channel.
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Interact with friends and acquaintances by clicking the “like” icon on social media.
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Pay all your bills through automatic debits from your electronically deposited paycheck to your online bank account.
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Shop for clothing online without visiting a shopping mall.
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Find your mate using one of 1,500+ online dating sites available worldwide. (1)
The promise of this new technology has been to create more free time for people. What it might do is create introverts who do not venture outside their homes or interact with people on a 1:1 basis.
Why is the High Tech, High Touch relationship a financial advisor (and others) better than a High Tech, Low Touch” relationship where people never leave their home? Put another way, what could possibly go wrong?
Where does this fit int with having a financial advisor? The more a someone realizes the benefits of a personal relationship, the more they should appreciate the benefits of their relationship with their advisor.
1. Roboadvisors, ETFs and automatic rebalancing. If there were five risk tolerance models and everyone used the same index tracking ETFs, wouldn’t everyone get the same five possible returns? That might be fine when the stock market goes up, but couldn’t everyone lose money in a down year? What about a beat market?
High Touch: Advisors know their clients. Hand holding is often required in volatile markets. There is a wide selection of investments beyond index tracking ETFs.
Advisors: Is your client interested in stockpicking? Do they have a favorite industry. Show them the wide world of equities beyond index tracker ETFs.
2. See doctors onscreen. This implies health care is simply reading blood test results, flagging numbers that are outside an acceptable range. There are instances where a doctor needs the ability to touch you or examine something up close.
High Touch: You are more likely to follow your doctor’s advice to lose weight, stop smoking or cut down on drinking if you have a 1:1 relationship and meet in person. You develop a level of trust encouraging confidentiality.
Advisors: Does your client get annual checkups? Even if they are healthy, make the case why this is a good idea.
3. Self-file your tax return online. It’s convenient. You save the cost of having an accountant prepare your return.
High Touch: Unless you have a very simple life, there are benefits to brining onboard an accounting professional. Tax avoidance might be illegal, but tax minimization is not. This is possible with the help of a tax professional.
Advisors: As their advisor, can you refer them?
4. Online mortgages and CDs. It can be easy to shop online. Are all the offerings they see legitimate? Are some institutions offshore, not protected under American law?
High Touch: When you have a relationship with a banker, they can recommend the products that are the best fit. They can help you navigate the mortgage application process.
Advisors: Does your firm offer CDs and mortgages? Are their rates competitive?
5. Order groceries online. Some people do not like grocery shopping. It takes time. They tend to buy brand names only. They don’t shop sales or use coupons, even digital ones. They prefer home delivery, even if it costs extra.
High Touch: You choose your supermarket chain. You compare store brands vs. national brands. In some communities, the aisles of the supermarket have replaced the town square as the place where people run into their friends. Maybe future mates.
Advisors: Is your client shopping at a store because of prestige or bragging rights? If it’s online shopping, people won’t know! Can you recommend supermarkets where quality and value align?
6. Buy meal kits instead of shopping. These had been heavily advertised on TV. Everything you need comes in a box. Ingredients are pre-portioned. It saves the trip to the grocery store.
High Touch: If buying in larger packages (buying in bulk) saves money, buying in tiny packages pushes costs up significantly. Buying off the supermarket shelf should help your client reduce overhead expenses.
Advisors: Would a book of simple recipes for “cooking for couples” be a good present?
7. Preprepared meals and the toaster oven. You can order meals in single-use metal trays. The company provides an tabletop oven. Do some basic setup, insert the tray and scan the QR code. The meal cooks itself.
High Touch: Learning to cook for yourself would probably not add much to the prep time and save some money.
Advisors: If they really don’t want to cook, introduce them to the three-pound roasted chickens at Costco, priced at $4.99. They are near the preprepared entrees in ovenproof trays also sold at Costco, probably for less money.
8. Online spin and exercise classes. These became popular during the pandemic. You could maintain your home exercise route while self isolating. The pandemic lockdown is over. Do you still need to self isolate?
High Touch: Join (or rejoin) a gym. When you make friends, you are motivated to show up even on days you feel like sleeping in. If you are missing for a few days, they will worry about you.
Advisors: If they are single, you might mention meeting people at the gym is right up there with meeting people while grocery shopping.
9. Letting AI do your writing. You have seen many articles about how Artificial Intelligence can research and write term papers and articles. You could probably find a program to track birthdays and anniversaries, composing and sending texts or e-mails on your behalf.
High Touch: Surface mail is so “out” it has come back “in.” People get very few personalized cards and notes. Send a few and the recipient will probably call and thank you.
Advisors: You know some stores where you can buy really funny cards. If your client thinks greeting cards cost too much, tell them about the selection at Trader Joe’s, priced at 99 cents.
10. Religious services by video. These became popular during the pandemic. They can still be easily found on broadcast TV and online sites like YouTube.
High Touch: You get to know your neighbors when you attend services on a regular basis. In addition to inspiration, you also gain a sense of community.
Advisors: People who attend religious services often contribute financially. As their advisor, you can tell them about other ways, in addition to putting cash in the collection basket.
11. When social media “likes” replaces conversation. It has been said the later generations don’t make phone calls anymore. They spend a lot of time on social media. Conversations and typed messages are often replaced by likes and imogees.
High Touch: When you minimize person to person conversation, you lose the social skills like sending people’s moods or delivering bad news gently. These are skills important in business, romance, negotiation, sales and life.
Advisors: Learn about your client’s interests. What are their passions? What local social groups attract like minded people? When was the last time they visited their siblings or parents?
12. When automatic debits meet automatic deposits. It has been said no one writes checks anymore. People are uses cash less frequently. Credit card payments are being supplanted by virtual wallets. Automatic debits and deposits makes sense as long as there is money in the account.
High Touch: It might take more work, but pay some bills by check or individual online payments. If money ever gets tight, you determine who gets paid immediately and who waits.
Advisors: This is a financial planning opportunity. When physical currency is no longer seen, does your client know if they are spending far more than they are earning?
13. Buying clothing online. This allows for impulse purchases. Shipping is free. Returns are often free too. Delivery is often within a couple of days. Why bother going to the mall?
High Touch: In addition to the socialization, shopping in person makes sense for two reasons: Will the clothing fit? Are the colors on the screen the same as the color of the actual garments?
Advisors: You might compliment clients on their clothing. Ask where they bought it.
14. Online dating. Meeting new people can be awkward. In the 1970’s and ‘80’s, singles bars were popular. One in Manhattan gave out matchbooks with preprinted lines for writing down phone numbers. You “put yourself out there.” Today, online dating is popular. There are 1,500+ apps and websites. You can get depressed if it’s not working for you or the person you meet doesn’t look like what you were expecting.
High Touch: Serendipity works. Put yourself in the right social situations on a regular basis. Let your friends know you are in the market to make a new connection. They will set you up.
Advisors: Do you know your client’s interests? Suggest a few groups where they can meet like minded people.
You cannot prevent your clients or friends from becoming introverts. You can make the case for how their lives should improve if they get out more often.
Related: Advisors: Did Your Client’s Accountant Ask About You?