How can advisors adapt their businesses to compete in an
age where many clients rely on smart phone apps and technology to manage their
investments?
We spoke with Howard Tullman, CEO of the Chicago-based
technology incubator 1871.com, to get his insights. Here are his edited
comments.
Technology has changed the landscape within the retail
sector and is also impacting the way many people manage their investments. How
should advisors approach the rapid advancements in technology?
Howard Tullman: One of the things I often say is that
retail isn’t dead but lousy retail is dead. And in the same way, advisors can
use technology as a shield to protect themselves, or they can use it as a
weapon to help them do a better job. How do they make their connection to their
customers more personal? How do they make it more about real results? And then
how do they add back the human element? Treating technology not as the enemy,
but as your friend, is the best approach, in my opinion.
How can advisors go about this? How do they embrace
technology and use it to improve results?
Tullman: Well, I think the first thing advisors need
to understand is that algorithms and machines can help them do their job
better. Because it can free up time that they previously spent on analytics and
on reviewing things. And they can convert that time into improving their
connection to the customer. Ultimately, I think the best defense against
automation, algorithms, and price competition is connection. Connection is
about demonstrating that you are actually paying attention to your clients.
That means demonstrating on a regular basis that you are actively looking out
for your clients’ best interests.
Many of today’s younger investors have never known a world without the Internet or smart phones. They are comfortable transacting online. How can advisors reach out to these investors and establish personal relationships?
Tullman: Fidelity’s own research indicates that a
large percentage of advisors would say that they have no connection with the
adult children of their clients. That’s something advisors have to work on.
They have to figure out how to create an environment where they can have a
family meeting or invite their clients’ adult children to a luncheon or some
other meeting. Or perhaps, with the permission of the advisor’s client,
advisors can create a portfolio document of some kind that shows them where
things stand and what they might inherit from their parents in the future. Or
even solicit the names of stocks which the children are interested in as a
potential part of their portfolio.
In today’s hyper-connected world, it can be hard for
advisors to stand out from the crowd and gain attention. Do you have any
suggestions for how advisors can execute an effective content marketing
strategy?
Tullman: A lot of advisors start out with the best of
intentions, but they quickly get overwhelmed. In some cases, they have not
looked at their website or updated it in years. They end up with a “ghost
site,” and that’s a horrible message to put out to clients and prospects. Even
a simple active blog is better than a stale website. But if advisors scale back
their plans a bit, keep their content personal, and post on regular basis, they
may not find the process to be too onerous. Sharing one or two thoughts a week
will help keep their firm top of mind for their clients and prospects. Relating
these comments to current events is a good way to make things more relevant.
The truth is very few people have enough time to create significant amounts of
original content on their own. But if you can be perceived as somebody who’s in
the know, who’s keeping clients current, and who’s saving them time, that’s a
significant way to reinforce the value of what you’re doing for them.
With the pace of technological change seemingly moving faster every day, what can advisors do to adapt and keep up?
Tullman: The most important thing to remember is that
the world won’t wait for you and that you need to start changing now. Or else
you’ll be left behind. It’s okay to feel uncomfortable or uneasy about these
things. Nobody is going to be a master of it on Day One. But if you don’t put
your toe in the water, then for sure, you’re not going to be able to keep up. I
think it’s also important for advisors to understand that in many cases, they
have acted as a “Lone Ranger” in many respects. That’s how they grew up and
it’s how they built their practice. Today, that’s just not a good strategy for
success. Nobody is going to be able to do this stuff on their own. You need to
have partners and people who can help you do a better job. Collaborating with
your broker dealer can help you serve your clients and the next generation of
investors even better.