From Traditional Advisor to Digital Powerhouse in Five Steps

For advisors looking to improve their use of digital tools like AI, The Next-Generation Wealth Advisor, a recent report on harnessing data and technology to drive business by Broadridge and ESI ThoughtLab, offers five steps to evolving from tech laggard to digital powerhouse.

1. Establish a bionic culture.

Today’s investors want advice that’s as personal, friendly and reliable as the last app they downloaded. To meet clients on these terms, wealth managers must build bionic cultures that combine the best of two worlds: the incisive knowledge human advisors bring to understanding investor needs with the personalization and cost-efficiency that accompanies a growing array of high-tech tools. Cognitive technologies and AI, for example, include machine learning, deep learning, natural language processing, rules-based engines and robotic process automation (RPA). Advice models that seamlessly integrate the human advisor with cognitive computing and AI are already facilitating goals-based asset allocation and risk management strategies. Machine learning and cognitive computing lets advisors tailor their services in highly personalized ways, too. For example, an advisor can start their business day by reviewing client notifications on a mobile device; and then, at the click of a button, send out a personalized response. While creating a bionic culture, of course, doesn’t occur overnight, it helps to focus first on the broader advantages to bionic benefits – not just the attractions of cost-cutting.

2. Unlock the power in data.

The lifeblood of any firm is its data. Today, data analytics software can routinely digest massive amounts of client data, measure it, learn without supervision, make recommendations and generate prompts to advisors and clients. In tandem with their CRMs, advisors can use this data to assemble a 360-degree picture of both clients and prospects. From real estate and vehicle ownership to information on career changes and life events, advisors will access vast troves of data on an automated basis to help in client targeting, marketing and personalized servicing. Meanwhile, robotic process automation (RPA) systematizes the kind of repetitive, rules-based processes often performed by people working with PCs. Instead, RPA’s software robots can open email attachments, complete e-forms and perform other tasks that mimic human action, leaving human advisors free to manage the warm-blooded side of the client equation. This advanced use of digital technology and analytics will prove to be a highly important contributor to an advisor’s success over the next five years.

3. Cultivate a multi-dimensional view of every client.

Technology is taking what advisors would normally do when they had fewer clients; such as networking, joining clubs, and asking for referrals — and automating it. Through data-based segmentation, advisors can better target their marketing and client interactions to generate content-sharing programs, sales leads and business development opportunities. It can also help experienced advisors cultivate a special niche. For example, an advisor with expertise surrounding the unique problems of aging parents can quickly identify suitable prospects through AI software, which can scrape dozens of marketing, demographic, psychographic, public record and credit databases to find a match. As advisors learn more about clients through AI, cognitive marketing tools can take over to help plan, create and promote content personalized to the client’s interests and needs. By measuring results and segmenting clients into servicing categories, advisors can also focus more attention on highest-value relationships.

4. Surround each client with digital and team expertise.

As technology simplifies routine investment tasks, clients will grow more dependent on advisors as financial life coaches who can provide personalized team support. Broadridge and ESI Thoughtlab joint research shows that by 2022, 50 percent of investors will consider the ability to provide holistic, team-based goal planning as one of the most important criteria in selecting a wealth advisor. While no single advisor can be an expert on all planning aspects, teamwork and client-sharing will grow increasingly important. Fidelity Investments for one has been leading efforts to meet the holistic expectations of customers beyond investments to include other needs like financial planning, healthcare, banking and lending.

5. Grow each relationship 24/7.

Today's investors demand account access coupled with frictionless responsiveness. It's become the norm in the consumer space, and it's going to be the new normal in the financial space. Fifty percent of investors today say the ability to provide anytime, anywhere device access and transactions is highly important when choosing an advisor – and that will grow to nearly 60 percent in the next five years. AI and cognitive tools can help accomplish this without requiring advisors staying awake around the clock. After all, there isn’t a human alive who can keep up with technology tools that operate 24/7 to access, aggregate and analyze client data, while simultaneously onboarding clients, modeling portfolio recommendations and preparing tomorrow’s social media notifications.

Following these five steps will help advisors transform their traditional practice into a digital powerhouse. Advisors who build a bionic culture, harness the power of data and technology and create a virtual office that partners with other specialists who augment their skillset, will reap an immediate return on innovation (the new “ROI”) and better serve next-gen customers.

For more information, read the full report, The Next-Generation Wealth Advisor.