Forget a Robo vs. human, us/them, John Henry-like duel to the death. Client-facing digital tools will increasingly complement, rather than compete, with traditional advisors, enabling them to spend more time on client-facing activities.
It’s not exactly news, but worth reiteration, and it’s the central findings of a new report, U.S. Retail Investor Advice Relationships 2018: Optimizing Engagement, from global research and consulting firm Cerulli Associates.
The report concludes that digital offerings will not replace advisors, but rather will improve the way that advisors form relationships with their clients and scale their businesses.
“While many retail investors have come to expect an omnipresent digital experience, they also require the personalization, insight, and analysis that only a live advisor relationship can facilitate,” Cerulli notes.
It’s therefore incumbent upon advisors to evaluate and implement technology that enables them to increase their customer service experience across all accounts, large and small.
“As many practices seek to build scale, it is important to remember that the human element of discovery is irreplaceable and that the best use of technology is to enable advisors to spend more time in client-facing activity,” Scott Smith, director at Cerulli, said in a statement. “With the industry focused on creating efficiency and scale through digital platform development, the worth of face-to-face meetings has been relatively discounted.”
Digital engagement will be a core component of every firm’s wealth management offering.
The report also analyzes the impact of fee compression.
While fee compression is a frequent topic of concern among wealth management providers, relatively few investors cite fees as their primary determinant in provider selection.
Despite broader awareness of the types and amounts of fees associated with their investing relationships, the vast majority are content with their relationships.
The report covers the role and importance of evaluating engagement models, the evolution of digital advice landscape, the impact of price compression on client behavior, and an overview of the financial planning process in relation to client demand.
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
