The Wall Street Journal
Michael Spellacy is senior partner of asset management and leader of global wealth management at PwC in New York. Voices is an occasional feature of edited excerpts in which wealth managers address issues of interest to the advisory community. As told to Alex Coppola.
From mobile banking apps to investing portals, clients are surrounded by digital technology that makes their financial lives easier. Despite that, a recent survey on financial technology by PwC showed that fewer than 30% of advisory firms offer digital solutions beyond email communication.
That disparity between what clients want and value and what they get from their advisers might help explain why fewer than 25% of high-net-worth clients are likely to recommend the adviser's services. Advisers like to think of themselves as trusted resources, but clients don't necessarily agree. That's a fundamental problem that advisers and firms need to address.
Firms as a whole need to be more proactive in meeting clients' needs, serving them more efficiently and providing solutions. Advisers and firms should think of financial technology not as a problem or challenge, but as an opportunity to deepen their ties to—and improve the experiences of—their clients.
Consider the ways that the robo-advisory industry has used technology to streamline the process of opening accounts, gathering and organizing new client information. While a client will routinely go through dozens of steps to open an account at a traditional firm, they can often join an online adviser in just minutes. When a traditional firm uses systems that simplify those kinds of administrative processes, it not only improves margins but it also removes a major pain point for clients and improves their experience.
The purpose of technology is not to replace interactions with clients, but to optimize them. Think, for example, about the way that many firms collect and organize information about their clients' needs and goals. Typically they're recorded and then filed away until they're reviewed at an annual check-in. But what if those goals were entered into a system where they became digital data points rather than notes in a filing cabinet? Such a system can regularly inform and notify users about those goals, helping advisers to proactively and strategically offer clients certain services and guidance. Technology allows advisers and firms to stay on top of their clients' needs and tailor their services accordingly, bring value in ways that simply weren't possible before.
With younger generations expecting access to digital tools and poised to benefit from a historic generational transfer of wealth, the time is right for advisers to stand up and become part of the discussion over technology at their firms. For advisers and their firms to remain successful in a rapidly changing and increasingly competitive industry, they need to be active participants in decisions about technology rather than the passive recipients of them.
This article was licensed through Dow Jones Direct.
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