In 2015, the biggest technological innovation to hit the financial advisor industry seemed to be robo-advisors - automated portfolio management services that use algorithms to provide financial advice.
Well, the robo-advisors are still around, but they have not, we’re happy to report, replaced your friendly human financial advisor - and it doesn’t look like they will, at least for the foreseeable future.
So what’s next in advisor technology? Is 2016 ushering in changes as major as the robo-advisor, or is this shaping up to be a quieter year? Here are five tech trends we’re betting on that could affect the financial advisor industry.
A focus on small data, rather than big data
Big data, or information that comes from truly massive data sets, has been lauded as a game-changer since the internet made collecting this kind of information possible.
While big data can still be helpful for financial advisors, the trend now is to turn toward small data - information about your specific practice, your clients, your town or city.
This is the kind of information that you probably already collect anecdotally, but technology can now allow you to verify those anecdotes with hard numbers.
For example, you could figure out which age groups your clients fall into and use that information to see where you need to improve your outreach. You could also use that data to determine who your core audience is, and work on expanding the services you offer to appeal to that group. Maybe that group is Baby Boomers, and you need to focus more on retirement planning. Maybe it’s those in middle age, and you need to be more proactive about offering advice on college funding.
There’s any number of ways you could put that data to work to help your business grow.
An increase in mobile capabilities
Advisor platforms have already greatly increased their mobile capabilities, and that’s not going to change. Anyone can see that this is the direction technology is going, in all fields.
But how does that affect your relationship with your clients? On the one hand, it means more freedom for you - if you can access a client’s portfolio on your tablet while you’re out to lunch, there’s less need for you to be tied to your desk.
On the other, of course, it could mean that you’ve got to be “on” more often, replying to client inquiries whether you’re out on the golf course or staying late at the office. Every advisor has to decide on his or her work-life balance - it’s important to start considering how it will change your practice.
More cloud services and digital storage
Going through different programs to manage the various accounts in your client’s portfolio is not just inefficient. It can be downright confusing.
Thankfully, advisor tech providers have been focusing on greater digital storage and cloud services, which can allow advisors to place all of a client’s information in a single place. That could be everything from investment and savings accounts, to estate planning documents.
This can help you save time during client meetings, as well as give you a better and more holistic view of your client’s financial situation.
Better marketing opportunities
If you’re not already taking advantage of the many digital marketing opportunities that are out there - social media, paid advertising, content marketing, and the like - then 2016 is the year to do it.
Nothing will ever replace the good old-fashioned face-to-face meeting, but when it comes to reaching out to new clients, digital marketing offers huge opportunities. It also allows potential clients to respond to your marketing efforts immediately, which in turn helps you to see what’s working and what isn’t much faster than ever before. Then you can make the necessary adjustments to improve or change as needed.
Advisor technology is continuing to evolve at an exciting pace, offering all kinds of new opportunities for advisors to better serve their clients. To read more about technology for advisors, read our post “5 Apps Every Financial Planner Should Download Right Now.”