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Advisors need to expand their scope and redefine their roles to resemble some combination of a trusted financial advisor and life coach.fizkes/iStockPhoto / Getty Images

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Financial advisors were forced to adapt new technologies and practices during the past two years to stay in touch with clients and preserve their businesses through the pandemic. But this year will provide a new test: advisors will have to master these tools well enough to meet clients’ rapidly changing needs and expectations.

While the immediate shifts within business and society resulting from COVID-19 have been well discussed, there are other second-order effects that might prove to be just as important over the long run.

For some Canadians, work disruptions have strained finances, forcing them to postpone planned retirements. At the same time, the surprise respite from office life and commuting gave others an unprecedented opportunity to reflect on their jobs and experience different, and in some cases more rewarding lifestyles.

We’re seeing the results of all that now. People are leaving unfulfilling jobs, changing careers, and retiring early. As they do so, their priorities are changing. For example, people leaving the workforce are shifting from building wealth to decumulating assets efficiently to ensure they can support their retirement and, ideally, have something left to pass on to their children.

Canadians have also been presented with newfound time and access to new investment channels and products. In 2020, Canadian investors opened 2.4-million new retail brokerage accounts, according to data from Investor Economics. Investors also started researching and investing in new digital assets such as cryptocurrencies.

As a result of these trends, advisors will encounter a client base in 2022 that’s experiencing unprecedented changes in their lifestyles, goals and needs. They’re also navigating their shifting situations by using new digital tools to communicate and find information and, increasingly, investing more on their own.

All of that leads to a radically different client base than the one advisors served just years ago. Satisfying these clients will require some critical changes to the way advisors operate.

Specifically, advisors will have to use the technology and digital strategies they’ve adopted over the past two years to transform their relationships with clients. Here are three ways advisors can create relationships with clients that are more in tune with their current needs:

1. Become a financial wellness advisor

The internet and social media have given investors access to an unprecedented amount of information and investment opportunities. As such, some investors will feel less of a need to rely on an advisor for expert advice, and others will want to do some or even all of their investing on their own.

In turn, advisors need to expand their scope and redefine their roles to resemble some combination of a trusted financial advisor and life coach. As investors are doing their own research and, in some cases, executing their own trades, advisors need to position themselves as holistic experts who can help clients make decisions about portfolios and their financial situations overall.

Doing so will mean understanding where clients are in their lives, defining short- and long-term needs and objectives, and assessing how well their portfolios are in the position to meet those overall goals. That includes looking into both assets the advisor manages and assets investors buy and control themselves.

Technology will play a key role in this relationship. New applications allow advisors – with their clients’ consent – to monitor all of their assets, regardless of where they’re held.

Advisors must also be prepared to provide educational material and recommendations (where possible) across the board, even on emerging investments that the advisory firm may not directly offer, such as cryptocurrency.

This type of top-down approach will help advisors cement their value through informed conversations about clients’ overall financial wellness that can’t be found on any social media platform.

2. Serve clients that best align with your practice

To be valuable to today’s empowered investors, information and advice must be relevant directly to their specific situations and objectives. However, providing this type of hyper-personalized service to an entire book of clients consistently is a feat that can be accomplished only through using technology.

It starts with data. Advisors should be employing new tools that help them identify investor characteristics and preferences quickly and segment both clients and prospects into categories that go far beyond net worth and region. By slicing their client and prospect base into narrower categories such as retirees, young entrepreneurs or parents of post-secondary-age kids, advisors can speak and provide information to those groups specifically based on their needs and interests.

Digital tools that can help advisors deliver a steady flow of hyper-personalized marketing and regulatory content leverage existing foundational books and records data.

3. Use technology to identify patterns among clients

When your clients interact with you and your firm, they’re going to expect an experience similar to the one they receive through Apple Inc., Inc., or Google LLC. Delivering the type of seamless service that retail companies offer requires integrating several innovative technologies.

For starters, advisors should be using tools that parse clients’ behaviour to identify important patterns. Does the client spend a lot of time on Twitter? Do they prefer to get information via e-mail, or on Facebook or LinkedIn? Is text or video best in terms of format? Is there a best time of day to initiate contact?

These insights should be combined with data from applications that measure clients’ responses to advisor communications. Did clients open your text message or e-mail? Which links did clients click on, and did any of those generate further conversation?

These applications help advisors communicate with clients at the right time and through the right channels. In a hybrid world, that has never been more important.

By combining these tools with hyper-personalized content, advisors can ensure that every interaction delivers maximum value to clients. Perfecting this type of service model should be a top priority for advisors.

Donna Bristow is managing director, North American Wealth, at Broadridge Financial Solutions Inc. in Toronto.

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