Whether it’s mapping the shortest driving route with GPS or making restaurant reservations through a smartphone app, people expect technology to provide them with the answers and the assistance they need.
And increasingly, tech-savvy investors are carrying those expectations into the world of finance.
“People live lives that are tech-focused, and more and more they expect their financial advisors to be tech-focused, too,” says Brad Pries, founder and CEO of Sawtooth Solutions, a company that provides technology platforms that help advisors manage their clients’ accounts.
Often financial clients are looking for faster responses in a fast-paced world. The advisors who can meet their needs and adapt quickly to technological advances are the ones most likely to thrive, Pries says.
Already, technology is providing tools that allow investors to do things they once couldn’t have imagined, he says. For example, investors often have accounts scattered at various firms. They may have a bank account, an insurance account and investment accounts.
In the past, they would need to check the balances of each separately, but technology allows Sawtooth to provide them with a consolidated balance sheet even if an advisor who works with Sawtooth isn’t managing all the accounts.
“That’s just one example of how technology can simplify things,” Pries says.
Additional ways technology is changing the financial-planning landscape include:
• Communication. Email, text messages, social media and video conferencing all have become popular ways to keep open the lines of communication between client and advisor. While communication is important, too much communication comes with a downside, Pries says. “It starts to become like junk mail where it’s tough to sort through the mundane and try to find messages that are important or necessary,” he says.
• Robo-advisors. Some do-it-yourself investors prefer to make use of robo-advisors, which are software programs that provide automated portfolio advice, usually at a lower fee than you would pay a human advisor. With true robo-advisors, there’s no human contact and the advice is rather basic, Pries says. But it doesn’t have to be an either-or proposition. “We give advisors we work with technology that we call ‘lightly attended robo,’ ” he says. “It provides some automation, but with some personal interaction thrown in if it’s needed.”
• Electronic paperwork. The financial industry continues to be driven by mounds of paperwork, much of it the result of requirements from the Security and Exchange Commission or the Financial Industry Regulatory Authority. Most advisors still use old-fashioned pen and paper to fill out and sign account applications, Pries says. “But there’s a move toward electronic paperwork and we have embraced that,” he says.
“Financial advisors who seize on technology’s role are going to be able to service their clients more effectively,” Pries says, “Technology also can help them streamline business processes and grow their businesses.”