FinTech firms are companies that use technology to make financial service more efficient. The 2016 Connected Investor Report by Salesforce, found that 67 per cent of global investors, including Canadians, believe modern tools for financial planning are important factors when selecting an advisor. Yet, many financial advisors and clients continue to communicate through traditional and now seemingly outdated methods including phone (45 per cent), in-person (24 per cent) or “snail mail” (7 per cent).
While the modern investor’s expectation for digital solutions to manage their portfolios and to communicate is on the rise, advisors are overloaded with manually pulling client insights and information, leaving less and less time for client interaction. This impasse comes at a time when markets are volatile and the dollar is unsteady, which makes investors nervous and in need of increased and timely engagement with their advisors.
For Canadian advisors, it’s a quandary that needs to be solved quickly as more investors are leapfrogging their advisors completely in favour of self-directed investing. Late last year a TD survey found that 27 per cent of Canadians already have self-directed accounts and a third of those who don’t would consider self-directed investing in the future.
The rapid emergence of FinTech companies is adding to the pressure for advisors. FinTechs, which are disrupting financial systems and corporations with their innovative use of technology, are able to provide investors with turnkey and seamless customer experiences. Because they’re not bound by legacy systems and processes, FinTech companies are able to get out of the gate with powerful, effective platforms that provide a 360-degree view of their investors and enable them to react quickly on behalf of their clients.
Because of the exceptional experience they provide, FinTechs are quickly gaining momentum and attracting investors who are eager to put their money where the tech is. In order to stay in the game, here are three ways advisors can move in the right direction when it comes to using technology:
1. Use tech to build deeper client relationships. The Salesforce 2016 Connected Investor’s Report found that investors would like to manage their investments in collaboration with their financial advisors, yet only 30 per cent indicated that their advisor proactively reached out to them. A financial advisor’s advantage over a robo-advisor is the human connection, so today’s advisors need to make the most of that while giving investors the modern tools they crave. Technology can help advisors better understand their client’s individual preferences beyond their investment needs including how and when they want to communicate. Cloud-based customer relationship management solutions, for example, provide advisors with a holistic view of their clients’ financial life. This includes financial accounts, tear-sheets and goals, and enables advisors to include information about extended family members as investors prepare to transfer wealth between generations.
2. Shelf the paper shuffle. The more time you spend on administrative tasks, the less time you have to spend with clients. This is a significant challenge, according to a J.D. Power & Associates Financial Advisor Satisfaction Study, which finds that 78 per cent of dedicated financial advisors feel they do not have enough time to spend with their clients. The top two reasons for this are spending too much time on administrative and compliance-related tasks. While ensuring that paperwork is accurate and compliant must be top of mind, consider ways to simplify your processes. A CRM solution allows financial advisors to unify customer information and experiences across every touch point and deliver proactive, effortless and highly personalized services that help them build stronger connections with their clients.
3. Build loyalty through accessibility. Investors, like all Canadians, are used to getting what they want 24/7. Similarly, they expect to get investment advice outside of quarterly meetings, so it’s up to advisors to ensure they have access to information wherever they are, whether it’s in a taxi or between meetings, in real-time from any device. This means that offering a mobile solution for investors is crucial for today’s advisor, as micro-moments could be as critical as regularly scheduled meetings. Providing this information from any device keeps communication fluid and strengthens the bond between the advisor and the investor.
With FinTech companies refining and enhancing their offerings every day, now is the right time for savvy advisors to strengthen relationships with their clients and make sure their technology is ready for the next generation of investors.
Richard Eyram is the Area Vice President, Salesforce Canada.
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