The financial advisory industry is one of the lucky ones to see such rapid technological development.
Sure, we may have to face the “is-AI-better-than-humans” scare head-on. But after getting past the technophobia, you’ll find that the opportunities outweigh the risks.
Experienced financial advisors know that adapting to developments like these is just part of the job description. It’s just another thing you have to do to survive in this fast-paced industry.
In this article, we’ll cover all you need to know about automation's current and future landscape and how you can best use it to boost your financial success.
The Landscape of Financial Advisor Automation
Think back to the days when basic software tools were the pinnacle of advancement in the fintech sector. Your job had more than a few moving parts, and you were mostly on your own to handle each one.
Fast forward to today, and we're surrounded by intricate platforms equipped with artificial intelligence, machine learning, and data analytics. These tools simplify tasks and offer insights that were previously unimaginable.
To put it into perspective, consider how advisors used to do asset management. In the past, this would involve manual calculations, spreadsheets, and a significant margin for error. Now, there are a lot of management tools to help you do this at the click of a button.
Take, for instance, how onboarding new clients works using Asset-Map.
Traditionally, you’d have to sit down with a client during a discovery session to go over their financial life and the overall size of their wealth. You’d then have to sift through this data at any stage of this relationship to find valuable insights that could help you direct your clients closer to their financial goals.
Asset-Map’s Discovery Interview feature lets you get clients involved early in the fact-finding process. They can fill out their form anywhere they want—without requiring your presence. With a click of a button, you can turn these answers about their financial situation into an Asset-Map Report. Now you’re ready for your first meeting, and you can walk in with some initial information about where your client stands in achieving their financial goals.
It’s a low-touch approach to client discovery, but you can use the remaining time to have more productive conversations about what your clients can do next. Among many other features used to streamline your process, Asset-Map’s Discovery Interview is just the beginning of how automation can change how you operate—and your profitability—for the better.
The Benefits of Automating Financial Advisor Planning
As a service provider, time is your most valuable currency, even if you don’t have a fee-based system that hinges on your hourly rate. If you’re in wealth management, which mainly deals in AUM, more clients with more assets mean higher revenue for your firm. The question is: how many of these clients can you handle at a time?
If you have more time, you can serve more clients. Unfortunately, according to a survey by Michael Kitces, financial advisors only spend half of their hours working directly with clients and use only 20% of these hours on client meetings. Administrative tasks are surprisingly time-consuming, making up 10% of your time during a typical work week.
To grow your revenue, you’ll need to create a team so you can delegate and extend your working hours.
Alternatively, you can optimize your time by automating most of your tasks.
Using technology to streamline and automate your processes, you can free up time for work that needs your full attention—such as creating personalized financial advice for your clients.
Other benefits of automation include:
Streamlined Workflows: As mentioned in the previous example, automation tools, such as portfolio management software, can seamlessly organize client data, schedule meetings, and manage portfolios. You don’t have to hold your client’s hands as they move from one touchpoint to the next.
Another common application of this is in marketing automation. Schedule your social media posts, automatically segment your email marketing lists, or send automated follow-up messages to people who have expressed interest in your financial services.
On top of business tasks, you can also automate some parts of your analysis process. For example, you can get real-time market data, up-to-date client information, or automate portfolio rebalancing.
Time-saving Opportunities: Time is a precious commodity. By reducing manual tasks like data entry and report generation, automation allows you to redirect your focus towards strategic planning, client interactions, and expanding your business. Imagine the hours saved that you can invest in nurturing client relationships or exploring new market opportunities.
Eliminating Human Error: Even the most meticulous advisor can make mistakes. Automated systems, however, ensure precision in calculations, data entry, and other processes—significantly reducing the risk of human errors that could potentially harm a client's financial strategy.
Ensuring Compliance: Financial regulations are constantly evolving. Some tools can track these changes and alert you when there’s a potential risk.
Offering Personalized Recommendations: With data analytics, advisors can extract insights from a client's financial history, spending habits, and investment preferences, allowing for more personalized and effective recommendations.
For example, by mapping your clients’ assets, you can spot hidden opportunities in their current financial plans. Finding wasted resources like these would be hard when you don’t have the technology to speed up this process.
Improving Client Relationships: Building and maintaining strong client relationships is the cornerstone of a successful advisory practice. Automation tools, especially client relationship management (CRM) systems, store invaluable client data, from their financial goals to personal milestones.
Use this information to send timely reminders, birthday wishes, or even personalized investment opportunities, creating a unique client experience that makes your clients feel valued.
Best Practices for Implementing Automation
You can automate both the technical and business aspects of your service.
A streamlined and fully automated process ensures you can deliver an experience that makes your clients want to refer your services to others—without the additional personnel or extra hours to your week to keep up with the demand.
However, setting up these tools can take a big chunk of your time. You’ll need to find the right software, balance the pricing and functionality of your tools, customize your new tools according to your needs, and figure out the right integration to ensure your tools can work together.
Here are some best practices when implementing, integrating, and tracking automation in financial advisor planning to make the process easier.
Training: The introduction of new tools and systems can be overwhelming. Invest some time in comprehensive training sessions to ensure you and your team are equipped to handle your new system. Whether through workshops, webinars, or inviting tech experts for a dedicated training program, you need to understand the tech you use to operate it efficiently.
Integration: The last thing you'd want is a new tool that doesn't gel with your existing systems, causing more chaos than convenience. Opt for software that offers seamless integration capabilities. For instance, if you're using a specific CRM, ensure other tools can effortlessly sync with this tool so you can have updated information wherever you are.
User-friendly Interface: An intuitive platform makes it easier for your users to adapt to the new software. By reducing the learning curve, you’ll also ensure that the client process remains uninterrupted.
Monitor KPIs: Implementing automation is not a one-time task. As new tools, needs, and errors emerge, you’ll find opportunities to improve your system. Regularly track key performance indicators—such as time saved, error rates, and client satisfaction scores— to gauge the impact of automation on your practice and spot these opportunities.
While the process is tedious, setting up your automated system is worth the fuss. Using automation and templates to streamline your processes can give you an edge over competitors that can boost your current value proposition.
The Future of Financial Advisor Automation
The financial advisory industry is flooded with new technology daily. Not all of these tools are useful, but some can change how you operate.
As more advisors use these tools and clients become more tech-savvy, client expectations of financial advisors also evolve. Clients are already looking for instant, personalized services, which automation can provide up to a certain point.
There’s already a high demand for robo-advisors, which can help clients who can’t be bothered with regular check-ins to keep investing. Clients can automatically deposit a certain amount and have these robo-advisors invest these funds according to the client’s risk profile.
With advancements in artificial intelligence, automation tools will become more innovative, offering predictive analytics and more personalized solutions to clients. Imagine a tool that tracks market trends and understands individual client preferences, life changes, and even mood shifts based on their communications. Such tools, powered by AI, can offer predictive analytics, foresee market shifts, and provide insights before the client realizes they need them.
While you don’t have to be early adopters, you’ll still need to keep up with new developments to stay competitive in the fintech world. Subscribe to financial advisor tech newsletters and fintech podcasts, or attend industry conferences to keep your knowledge up-to-date.
Revolutionize Your Financial Advisory Business With Asset-Map
Automation is one of the best things to happen in the financial advisory industry. You can focus on more critical financial services by delegating some of your repetitive tasks to software. Shift your attention to the irreplaceable part of your offer—the human connection clients seek when hiring a financial planner.
Asset-Map helps you streamline your processes, like marketing, client onboarding, client meetings, and financial goals, to name a few.
The automation and integration options in Asset-Map help you deliver a VIP experience for clients at scale. Get your demo today, and see how Asset-Map can help you to grow and scale your business.
