Implementing technology has become an essential part of running an effective and profitable financial advisory practice as the pace of innovation continues to accelerate.
Those advisors who fail to embrace the future put themselves at risk of having their clients marketed to by easier to use, more profitable, and lower-cost competitors.
Make no mistake; sticking your head in the sand on this subject will have very real long-term consequences.
That’s not an over exaggeration. Take a moment to consider that your clients can place orders and have items delivered within days, meals within minutes, and answers to their customer service inquiries almost immediately – all from their smartphones. Now, compare that to working with you. There are few, if any advisors, for whom the onboarding experience was as easy as with Wealthsimple.
Any advisor can reap the benefits that innovation brings with a little shift in mindset and some effort. For those who make this transition, the enhanced client experience, lower labour costs, and higher margins will make life even more difficult for those who don’t.
Here are six steps advisors can take to embrace the digital transformation.
1. Adopt an entrepreneurial mindset
Traditionally, advisors have relied largely on their investment and mutual fund dealers to provide technology to run their businesses. The problem with that strategy is that it’s not good enough. Dealers will always focus on core technologies to meet the needs of their advisors en masse, but they don’t meet every technological need of each advisor’s specific practice.
Instead, take what your dealer gives you and look to round out the other areas that it simply doesn’t address.
2. Educate yourself about what’s possible
There’s an ever-growing list of resources available to help advisors understand what’s out there and what can be done. From the first Canadian AdvisorTech Expo to podcasts and online software directories.
The first step is to educate yourself on what’s possible. In doing so, you will discover solutions to problems that you didn’t even know existed.
3. Technology is not a business strategy
Many people make the mistake of thinking that deploying technology is a strategy for success. It’s not.
Rather, technology enables strategies and processes. It’s not the reason people will choose to work with you. Before you even start implementing anything, you need to make sure you’re starting with a solid foundation of what your business is and what your process is for delivering that service.
If you don’t have a defined mission, vision, values, target market, service offering, and procedures mapped out for everything you do, start there. It can’t be understated how important this is.
Without an established process, there’s nothing to improve through the use of technology and all you will end up doing is spending money to enable a broken system.
Technology is not a business strategy; rather, it enables your strategy.
4. Start with repetitive pain
If you’re wondering where to start, look first to the areas of your practice that are repetitive and take a lot of time. These tasks are typically perfect for technology.
Are you sending e-mails back and forth all the time trying to book an appointment? Are you having trouble sharing documents securely or collecting client information to onboard them? All of these processes have affordable and effective solutions.
Whatever you choose, start with only one problem and software solution at a time. A common mistake advisors make is trying to boil the ocean all at once by implementing multiple solutions as if they were leaving the old practice behind and starting clean with a new one. That’s a surefire way to fail. So, pick one problem and solve it.
5. Seek and find
Once you have identified your pain, seek out solutions through the resources mentioned earlier, or simply, search for your problem on Google. From there, take the time to understand which software exists in the marketplace and make sure the one you choose is the one that’s the best fit for your practice.
6. Invest time in learning the technology
Another big mistake advisors make when implementing technology is not investing the proper amount of time to learn it or train their staff. Respect the fact that there is a learning curve and 20 minutes of unstructured learning will not cut it with just about any software.
There are no shortage of educational resources available, from vendor materials to YouTube videos. Book the time and learn the tool inside out. Then, dedicate the time to train your staff the same way and give everyone time to get used to it and hold them accountable to use it.
Once you have done this the first time, move on to the next problem.
Digital transformation is an ongoing process, not a destination. Every day, new solutions come to market that can enable your business. While all that can be overwhelming, it’s also an opportunity.
Jason Pereira is a partner and senior financial consultant at Woodgate Financial Inc., a financial planning firm under the IPC Securities Corp. umbrella in Toronto, and president of the Financial Planning Association of Canada.