The winners and losers of Wealth Management 2.0

"Wealth managers have to stop thinking about technology as an expense and think of it as a revenue generator instead," says April Rudin, Founder and President at The Rudin Group. Join her at FundForum International to understand your digital value proposition and new directions in building your corporate and personal brand for winning and retaining customers.

We’re not dealing with your parent’s wealth management anymore. It’s not an apocalyptic, robot-controlled financial advisory world, but the game has changed significantly in the last five years. For financial advisors to survive these changes, they need to understand the role of technology in wealth management and how it complements the role of human advisors.

Robo-advisors are the great democratisers of wealth management. These platforms make wealth management services an available option for anyone. Technology is cheap and requires limited man power. For the digital world, it creates streamlined efficiencies that we all, or at least those of us with smart phones, can appreciate. The new age of wealth management is a financial advisor for everyone. And that’s only a good thing for wealth managers.

Wealth management is first and foremost a relationship business. Clients should feel comfortable working with their financial advisors for the long haul, as should their spouses and children. Accessible technology is a service that advisors can offer their clients, but it is just a piece of the puzzle. Technology should free up advisors’ time so they can focus on meetings, phone calls, and a personalized approach to wealth management. Investors of every age may want technology incorporated in their wealth management, but investors from young to old also want a personal connection and advice. Just because a client is 30 years old doesn’t mean they only want to deal with a robo-advisor any more than a 60 year old client doesn’t want to use a website.

Think about the clients. A financial advisor is serving an entire client family. There’s a statistic that 70% of widows fire their financial advisors within a year, often because the advisor had little to no relationship with them and the widow wants a fresh start with someone of their own choosing. The younger generation of beneficiaries may feel the same way. But there’s an easy solution to this- build relationships with them!

The biggest challenge for financial advisors is accepting that it’s time to change the status quo. The younger generation of clients are going to be the ones most demanding of digital options when it comes to wealth management, but really everyone is digital. If wealth managers are using smart phones and apps every day in their personal lives, why wouldn’t their clients want the same options? Technology can be scary, expensive, and maybe even annoying at first. But it can take care of the mundane tasks so that advisors can be client-focused. It can create more efficient investing and trading.

Wealth managers have to stop thinking about technology as an expense and think of it as a revenue generator instead. Technology isn’t putting financial advisors out of a job. But it is changing the way they work.