Technology Offers Opportunities for High-Touch Client Contact

The RIAs profiting most from the efficiencies of technology focus on real-time client interaction and communication.

By Gretchen Halpin
Gretchen Halpin
Gretchen Halpin

Most of us in the industry can remember the days when offering a secure client portal for uploading documents and viewing account information could be touted as a serious value-add. But today, secure client portals are considered table stakes. In fact, with advances in online and mobile banking, secure online transactions, and other technology-driven financial solutions, clients view “instantaneous” as a baseline for most expectations.

So it comes as no surprise that the RIAs profiting most from the efficiencies of technology are those with the best focus on real-time client interaction and communication. In other words, it goes back to the phrase “high tech, high touch” coined by Alvin Toffler, author of the 1970 bestseller “Future Shock.” In today’s advisory landscape, a successful practice requires both.

Writing in Michael Kitces’s blog “Nerd’s-Eye View,” Craig Iskowitz coined the term “AdvisorTech” to categorize the increasing number of technological solutions companies are offering to help advisors conduct and grow their business. He cites a recent J.D. Power survey of brokers, 92% of whom identify advisory technology as crucial, but less than half of whom characterize their firms’ core technologies as “very valuable.” Clearly, there is a disconnect between the availability of advisory technology and its efficacy.

Aging Client Base, Emerging Technology

The aging of the client base will clearly impact the use and usefulness of technology for RIAs. Importantly, this reaches beyond the rush to Zoom and other digital meeting platforms that allowed RIAs operating during the pandemic to preserve at least a modicum of the face-to-face interaction so integral to our business. More and more, RIAs will need to seek out technological innovations designed strategically to meet the needs of an aging clientele.

According to the U.S. Census Bureau, by the year 2034 there will be more people in the U.S. age 65 and older than age 18 or younger — the first time in history this will have occurred. This means that RIAs who are positioning themselves strategically to serve this emerging demographic will need to stay abreast of tools that will help them cater to the felt needs of older Americans.

While robo-advisors and the like will remain important to developing the younger end of the clientele, older clients may be looking for a different set of solutions in their advising relationship. As suggested by Dan Egan, managing director of behavioral finance and investing at Betterment, the advisors who will thrive in the coming RIA landscape are those who are able to help clients focus on what is “really important in their lives … the really good financial planners are the ones who are good at having those tough conversations directly with their clients.”

New Tools of the Trade?

As we consider what is most important to our aging clients, we may need to turn our attention less to portfolio management and investment advising and more to targeted financial planning, risk management, and other account and lifestyle monitoring aids.

Once the risk profile has been established, the strategy has been agreed upon, and the portfolio has been designed and put in place, older clients may have a greater need for help with evaluating, updating, and basic administration than with specific investment recommendations. Their concerns may have more to do with monitoring accounts for security, with keeping track of significant documents, with planning around the aging process and the attendant financial implications, and even with evaluation and management of decision-making capacity.

The Wall Street Journal has reported on a growing market for financial apps specifically designed to help older investors and their children monitor and ensure the safety of their accounts. These range from help with paying bills to guarding against suspicious account activity.

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EverSafe, for example, aims to keep enrollees safe from online identity theft, fraud and scams. It characterizes its services as “specialized protection for seniors and families.” Whealthcare Planning LLC offers a suite of services and advisor training geared to help advisors work with clients on a range of lifestyle-related areas not specifically related to the financial markets or investing. Golden allows adult children to monitor their aging parents’ finances at a distance, including the ability to pay bills, find lower-cost services, apply for certain government benefits, and monitor accounts for suspicious activity.

An Issue That Isn’t Going Away

The need for such services isn’t likely to decrease any time soon. Some observers have reported a 30% to 40% increase in instances of elder financial abuse since the beginning of the pandemic in 2020, to the tune of as much as $36 billion in losses. Sadly, not all of the abuse is coming from outside perpetrators, as family members are responsible for millions lost by aging people annually. This means, among other things, that financial advisors and wealth planners will need to become not only more vigilant, but also more conversant with emerging technologies that can help them act as fiduciary advocates and, in some cases, watchdogs for their aging clientele.

Additional Reading: Financial Scammers Snare Millions of Unsuspecting Seniors

Whether you are overwhelmed by the rising tide of the technology component or you are a Zoom master-user, it’s important to remember that the one constant in our industry is the importance of quality client communication. No matter how efficient your technology platform may be, it can never take the place of the personal touch you bring to your client interactions. But as we move into the future, part of your duty of care for clients is likely to include acquiring the tools to help you keep them not only well advised, but also well protected.

Gretchen Halpin is co-founder of Beyond AUM, a growth, marketing and technology agency that specializes in serving financial advisory firms. A strategic visionary with over 25 years of leadership and marketing experience, including a history of starting and growing successful companies, Halpin pioneers the strategy and growth initiatives that drive success across every aspect of business while ensuring that decisions are aligned with her clients’ overall mission.

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