The relationship between financial advisors and their clients is built on trust. The levels of this trust and reliability are often formed over an extended period and sustained by repeating human interactions as well as a solid understanding of the client’s financial (and often private) circumstances.
At the same time, the market for financial advice is facing numerous challenges. Rising regulatory and transparency requirements oblige the advisor to engage in time-intensive and often manual tasks. Examples include gathering information on the client’s financial situation and risk-bearing capacity or providing suitability reports and advisor protocols. As a result, advisors have less time to build trust in existing relationships or forge new ones, while the quality of their services simultaneously diminishes.
In addition, an increasing number of clients, particularly younger generations, demand online access to their investment and a seamless experience with their advisors. The advice itself becomes a key element integrated into a digital, transparent and constantly available service offering. Advisors lacking a digital offering are at risk of not being able to cater to these client requirements.
In this context, technology acts as an enabler to build trust and enhance service quality & scope:
1. Trust – Foster trust by increasing transparency over the advice and investment process
2. Time – Use time savings to focus on the client and improve the quality of service
3. Insight - Develop a holistic view of the client’s assets in order to provide better, tailor-made advice
4. Investment efficiency - Improve the risk-return relationship by providing the best products for the client’s financial and risk-bearing capacity
5. Access – Adapt to "always-on" clients requirements by providing constant access to investment and advice via online channels
Dealing with such an important topic as personal finances will likely continue to require human interaction, however, technology is a necessary factor in a hybrid model of financial advice by enabling the advisor to have the time and tools to focus on the human factor.
Whereas the use of technology in financial advice is still perceived as an added value to achieve a competitive advantage, it will evolve as a prerequisite in every advisor’s service offering.
The use of technology allows the advisor to save time to focus on the client relationship while improving their service to cater to the needs of an increasingly digitalized society. With Fincite CIOS, we have built a modular software that allows advisors to choose specific functionalities from a comprehensive toolset:
From an economic perspective, using these tools allow the advisor to increase revenue per customer by generating net new assets and reduce costs by cutting manual efforts along the value chain.