5 Big Advisor Problems Being Solved Through Tech
Advisors face ever-growing struggleswith competition, fee compression,cybersecurity and finding new talent.For those willing to embrace it, newtechnology is helping them tackle all ofthese issues, according to Fred Duden,global head of product development atBroadridge Financial Solutions.
Digital adoption is “something thatadvisory firms and advisors were thinking about” for a while but, “with COVID,that adoption [is] something that we’rejust seeing take off” this year, he toldInvestment Advisor.
Due to that acceleration, the industry is making strides in five key areas,according to Duden.
1. Remote Work
The one major “sea change” that hasoccurred as a result of the pandemic hasbeen the adoption of Zoom and Webexvideo conferencing platforms by advisorsand their clients, Duden said.
“Fifty percent of investors said communications with their advisors havechanged in some way in light of the stayat home mandates,” he noted, citing thefindings of a recent Broadridge survey.
And 62% of those who reported achange in communication with theiradvisors would like that to be maintainedto at least some degree post-pandemic,Duden added.
2. Client Acquisition
The average advisor acquires maybe
two to three clients a year and, “in
today’s environment,” with the compres-
sion of client fees and competition from
different business models, how advi-
sors can continue to engage with their
clients — in a pandemic or not — is a
“really, really important” issue, he said.
Duden added that “today’s investors[want] advisors that are more kind ofdigital first.” By embracing digital marketing and tools, advisors can “reach out tomore and hopefully engage more clientsand therefore bring on more clients” thanever before.
Digital adoption is also a “really greatway for them to show the differentiationwith the advice that they provide,” he said.
3. Smart Processing
Smart processing is another hot topic,according to Duden.
Finding new ways to tackle businesstasks — such as the time they spendopening new client accounts — cansignificantly boost efficiencies and freethem up to focus on helping their clients,he says.
For example, brokerage accounts needto be accepted by a firm before a relationship between an advisor and a clientcan start, Duden noted. “Ninety-nine percent of those are going to be accepted —they don’t need a manual review [and]they don’t need somebody to look at it,”he pointed out.
Therefore, having an automated pro-
cess that deals with that task “can speed
up the time that it takes for an advisor
to get that account open and begin the
conversations about really what they’re
doing as opposed to spending time on
the transactional” part of the business,
Continued industry consolida-
tion, meanwhile, should provide the
scale that advisors need to be able to
increasingly use smart processing in sev-
eral areas — not just with onboarding,
Custodians will increasingly use smartprocessing and artificial intelligence, hepredicted, noting smaller advisory firmstend to use large custodians, so more ofthem will be able to take advantage ofthose technologies in the future.
Despite many reports since the start ofthe pandemic that suggested cybersecurity issues had increased, Duden saidthose worries have been growing. Firmscontinue to look at ways to best usedata, and there are tools that can analyze IP addresses to crack down on badactors, he noted, predicting investmentsin this area will continue.
5. Recruiting Young Advisors
One issue that continues to challengethe advisory sector is attracting youngertalent. And one way to get younger folksinterested in the industry is through theadoption of technology and the possibility that they can have a real impact onthat process, he said.
After all, the “competition for talent isgoing to be a really key thing” going forward, Duden said. —Jeff Berman
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