Much has been said about the rise of robo-advisors in the financial services industry. With tens of billions of dollars being invested in these online platforms, it is undeniable that consumers are craving the speed, efficiency and data that they can provide. While many of us agree that no computer can offer the one-on-one relationship that a client-advisor relationship can, we would be remiss to ignore this growing trend.
Some advisors react to the rise of these platforms by dismissing the trend and lamenting about the good old days when an account application could fit on a postcard. What they should be doing is exploring why robos are so appealing and what aspects of that technology could be incorporated into their practices.
If advisors had kept up with technology over the years and provided the best-quality
service possible to each and every client, maybe there wouldn’t be room for robos. But clearly there is demand for the digitization of the financial services industry, and we need to learn from it.
Technology doesn’t have to be the competition for the everyday advisor. And it’s not something that’s going to render us obsolete … unless we let it. It can be a tool that gives advisors and their staff the freedom to do what they do best, without having to worry about the day-to-day tasks that can be handled just as well (or better) by technology.
The Human Touch
Instead of fielding beneficiary or account balance requests, advisors should be able to focus on the human aspect of the job. What are benefits of a human touch?
1. Conversation. Technology can provide a templated survey, but it can’t truly understand what clients are saying. Only a human can respond with the kind of questions that come from years of experience. The power of creating a safe relationship where clients can express their hopes, trepidations and fears without judgment is key to financial liberation.
2. Empathy. No computer can understand the struggle of whether to put a parent in an assisted living facility, the stress of being forced into early retirement or the pain of losing a house in a fire. Maybe we haven’t been in these situations before, but our ability to empathize allows us to understand the emotion behind every decision.
3. Interpretive wisdom. Advisors can get to know clients’ stories and how they inform today’s financial decisions. For example, why a past diagnosis makes comprehensive health insurance important or how moving every year as a child created a yearning for home ownership. Advisors can derive a meaning and provide a uniquely human perspective that take much more than data into account.
4. Advocacy. Advisors can advocate for clients like no computer can. Wanting the best for our clients is a uniquely human experience, and it pushes us to do everything in our power to fight for our clients and help guide their decision-making over time.
Aren’t these human aspects of the job what we’re trying to accomplish with the word fiduciary? Rather than something defined by lawyers or compliance departments, at its core, fiduciary means caring deeply about another person’s fears and aspirations. It means doing everything in your power to help clients achieve their goals and overcome challenges at every stage of their financial journey.
While they are critically important, we should want even more for our clients than what the human aspects of the job can provide. Technology can provide a level of accuracy, immediacy, speed and predictive power that no human can. Most importantly, it can offer these four benefits for advisors, staff and clients:
1. Automation. Technology should systematize activities that easily can be handled digitally, such as providing basic account information and reporting.
2. Liability protection. Technology should help protect advisors from liability caused by human error and bad judgment calls.
3. Freedom. Technology should give advisors the freedom to focus on the human aspect of the job, while giving advisors the support they need to serve their clients.
4. Record keeping. Technology should make it easy to create and search records of client communications and activity.
Ideally, technology can seamlessly integrate into the way we communicate with and serve our clients during in-person meetings as well. A tablet can display the most up-to-date account data, enabling the advisor to explain the meaning behind the information and the strategy for moving forward. A television screen can display reports and run new ones based on client questions. Instead of trekking to an advisor’s office, maybe more clients will meet with advisors via videoconference with screen-sharing capabilities to make the process more interactive.
This type of technological innovation is necessary if advisors are not to end up obsolete. Integrating technology may seem overwhelming, but technology actually makes it easier than ever to do our jobs well.
However, regardless of what type of technology is in the room, having one person hearing and empathizing with another person’s story is the most valuable thing a human being can experience. The technology may be able to listen in, but it will never be able to provide that human touch. Technology is simply a platform on which we stand. And that is how we rise.
Nick Richtsmeier is executive vice president of business development at Trilogy Financial and chief operating officer of its independent Registered Investment Advisor Trilogy Capital, headquartered in Huntington Beach, Calif. Nick may be contacted at [email protected]