When Darren Coleman’s older, wealthy clients come to meet with him at his office, technology kicks in before they even arrive. He books them a round-trip with Uber, acknowledging their reluctance to drive into downtown Toronto, and he tracks the car on the app so that he can meet them in the lobby as they arrive.
It’s an example of how advisors could be using technology to raise their game, says Mr. Coleman, senior vice-president, private client group, and portfolio manager at Coleman Wealth, a division of Raymond James Ltd. in Toronto.
“We get locked into this tunnel vision of technology as it applies to our business,” he says. “There are all these other tools that are making life easier. Can we apply them to our relationships with clients?”
Technology will be a defining factor for advisors in the year ahead and beyond, says Gregory Smith, managing director, wealth management lead for Canada, at Accenture, adding that most people, especially millennials, are eager for their advisors to be more tech-savvy.
“Clients are adopting technology in an ever-increasing way through all the things they do in their lives,” Mr. Smith says. “They expect that their advisors are going to be using the same technology at the same pace and sophistication.”
Client-facing tools like online investment portals and mobile apps are important, but technology usage should extend further back into advisors’ businesses, Mr. Smith argues. It can enhance processes that clients may not see directly, but which will change the level of advice they’re getting.
“The evolution of the wealth management industry is to be more data-led and more client-centric,” he says.
Advisors can begin by better using technology that’s already there. Customer relationship management software can be more than just a Rolodex. For example, it can help advisors gain a better understanding of a business owner client’s business and personal situation together. Specifically, advisors could build a better picture of that person’s overall financial situation. Similarly, he says advisors must use tech to better understand spouses’ individual needs.
“The advisor needs to do goals-based planning for each member of the family,” he argues, warning that in around 50 per cent of cases, bereaved partners will take their inherited funds elsewhere.
There are several barriers to effective financial planning, says Brad Joudrie, chief revenue officer at financial planning software startup Conquest Planning Inc. in Winnipeg. The first challenge is getting hold of the right data.
“There are really inefficient processes for connecting to existing systems and pre-populating the first iteration of a financial plan,” he says.
The second hurdle is evaluating all the possible investment combinations and modelling them over time to see which will produce the best outcome for the client. It’s a trial-and-error process that’s difficult to do manually, Mr. Joudrie says.
When his company’s software launches later this year, it will help solve these problems by connecting to a range of systems to gather data. It will also run many possible investment permutations to help advisors produce more effective advice, he says.
Alongside better planning, technology can also expand an advisor’s practice to become a more service-oriented business, Mr. Coleman. For example, he’s looking to use software that will help him provide exclusive concierge-style services to high-value clients.
Specifically, he wants to transform everything from travel to health advocacy and property acquisition into white-glove experiences for high-end clients. It’s a business perk that he hopes will help them see him as a partner rather than just an advisor.
This year he will introduce a private invitation-only online portal in which wealthy clients can book a high-class driving experience. They would have a BMW vehicle delivered to their door and picked up afterward. The portal service comes from an external organization, but Mr. Coleman owns the relationship with the client, he says.
Beyond keeping up with tech-savvy clients’ expectations and providing better financial planning, there’s another reason why advisors will need to place a greater focus on technology in the year ahead, Mr. Smith says: the client-focused reforms.
Under the Canadian Securities Administrators’ client-focused reforms, advisors must prioritize clients’ best interests, demonstrating that they’ve matched product characteristics against a suitability analysis for the client.
“If you just simply add manual effort to monitoring compliance with these new reforms, it’s going to be terribly expensive,” Mr. Smith says. “There must be more technology applied to this [process].”
Accenture is already demonstrating technology internally that analyzes the products an advisor recommends to a client against a suitability profile. “The analytics will be driven into a single desktop view that the advisor has,” he says.
Although many advisors avoid taking advantage of all technology offers, Mr. Smith says that those not experimenting with software risk getting left behind.
“If the advisor is not using it now to help clients and to understand their needs, then how are they going to address the more sophisticated things that are coming down the pipeline very, very quickly?” he asks.