Financial Planning’s 2021 Technology Survey revealed a clear demand and need for tech in financial advising. Effective tech solutions are integral to advisors’ growth and ability to serve more clients. Yet, adoption gaps remain. Why?
Advisors are struggling with how to communicate the value tech brings to the financial planning process. They need to build clients’ trust in the modern solutions essential for building and growing an independent advisory practice.
To do this, advisors must rethink their communications strategies and demonstrate how tech positively impacts their clients’ financial futures. This is vital to increasing tech adoption and ensuring independent advisors have long-lasting practices.
Here are three ways advisors can shift their client conversations today:
Articulate the value of tech
Advisors should dedicate time to show clients how easy it is to use the technology during regular meetings. If this isn’t possible, chances are you’re using the wrong solutions.
It’s also important to articulate the direct benefit to the client while demonstrating tech usability, considering why the client should care about the tech. You shouldn’t just introduce tech that only benefits your firm.
Adoption will be low. How will the tech improve clients’ lives and their experiences with money overall? Add this question as a line item to your next leadership meeting to determine how to demonstrate tech’s value to clients.
Here are two examples: A client portal is helpful for advisors to collect estate planning documents, but it’s not just for financial plans. Consider having clients upload copies of their credit cards (front and back). If they are ever lost while traveling, it will save hours replacing the cards and create another valuable touchpoint to your firm beyond managing assets. Another is , mobile experience. An app is a step up in the client experience, but you must show the client how they can also quickly view transitions, such as check deposits without needing to call your office to confirm checks go through.
Address client engagement in financial planning
According to the survey, 66% of advisors completely agree that tech is vital in allowing them to serve more clients, and 64% completely agree that tech significantly impacted overall growth in the firm. However, just 38% of those surveyed completely agree that tech has encouraged more clients to engage with their financial plans. What’s driving this disengagement?
Most advisors tie their value to investment management, which can be a mistake. If you’re dealing with disengaged clients, start by shifting your focus to demonstrating value in the planning process and working toward long-term objectives for the client. Not only will this help drive tech adoption, but it’s also smart business. Clients want to know they will be protected and achieve their objectives. While that’s sometimes about performance, it’s most often about solving long-term planning problems.
Break out of stale communication cycles
It’s easy to get stuck in the rut of running through a standardized list of items during regular check-ins with clients. This cyclical system for communication may work, but probably not as well as it could with some engaging discussion.
Spend time asking thoughtful, specific questions. What do clients want money to do for them and their families?
Teach them how to spend and track responsibility. Many families are not sure how to spend the money they have saved. What’s the right expense for a new car? A second home? A weekend trip with first-class tickets and a nice hotel where they don’t feel guilty?
Leverage tech as a tool to help them visualize getting there. With clients more informed and engaged, tech adoption will grow, and so will your practice.
Ultimately, advisors who fail to embrace technology and demonstrate its value to clients are putting the long-term success of their practices at risk. Adopting new technology isn’t always easy, but it starts with putting the client’s needs first and foremost.
Remember, it’s not about how you make clients feel about you that matters. It’s about how you make them feel about their finances.