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Advisors that have been in business awhile have seen technology as a practice enhancement tool gradually increase in importance while younger advisors likely already have tech-centric practices.
Both scenarios are positive because technology will be at the forefront the advisory industry for years to come owing to its practical applications regarding enhanced practice efficiencies as well as attracting and retaining clients. With artificial intelligence (AI) still in its infancy and advisors only barely scratching the surface of the advantages of this technology, it’s fair to say the industry is on the cusp of a significant technological precipice – one that could create winners and losers in the years ahead.
In the financial advisory and wealth management industry, it’s either lead, follow, or get out of the way when it comes to embracing vital, disruptive technology. Knowing that, it’s critical registered investment advisors (RIAs) select the right partners for their technology journey. Tech can accomplish those objectives and while improving practice efficiencies and creating more pleasant exchanges with clients.
For advisors looking to capitalize on tech opportunities, a solid game plan is required. Here are some ideas for accomplishing that objective.
Human Input Required
Thomas Kochan, professor emeritus at the George Maverick Bunker Professor at the MIT Sloan School of Management, is an expert in issues including the evolving workplace and economy and technology’s impact on those issues. In a recent conversation with State Street Global Advisors (SSGA), Kochan highlighted the importance of involving a practice’s various human stakeholders in important technology decisions.
“We can all influence where technology takes us. But to do that, we need to be in the room, our associates need to be in the room, the technologist needs to be in the room, and the people on the front lines using the technology need to be in the room, too,” notes SSGA.
Still, there are fears across nearly every industry, including the advisory business, that machines and robots will replace humans. Specific to advisors, there’s no denying that clients want to work with humans and they want a real person dealing with their money. There are avenues to allay these fears when it comes to practices developing and deploying technology.
“By recognizing this dynamic, we can help ensure new technology pays off in terms of productivity gains and in other ways too — like improvements in job quality. Technology should be designed to augment how people work, so they can apply their human skills toward the things they’re best equipped to do,” adds SSGA.
Tips for Tech Implementation
In the conversation with SSGA, Kochan points to three important steps any organization – regardless of industry – should take when adding new tech. Those are discussing the areas tech will shore-up, ensuring new additions to the tech stack will function alongside assisting products and investing in training.
Obviously, advisors should not get bogged down in tech minutia, but there is value in principles taking a proactive approach on some fronts, as noted by Kochan.
“First, training efforts need to begin before new technologies are introduced,” concludes SSGA. “Second, workers need hybrid skills that combine technical knowledge with aptitudes for communication and problem-solving. Companies whose workers have hybrid skills are likely to see greater returns on their technology investments.”