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4 Tips to Help Manage Clients’ Investment Technology Expectations by Betterment

As people’s lives continue to be busier and more complicated, they want — or demand, really — their information and services to be accessible wherever they happen to be, at any time of day or night. A profusion of technologies have sprung up to help make this possible…and may have led to assumptions that humans aren’t necessary for strong company/customer relationships.

But the opposite may actually be true: with the advent of increasingly sophisticated tools that help people conduct the business of life, people also want human guidance. When it comes to investment technology, smart, easy-to-use tools should be a high priority, but clients don’t want to go it alone — they want support and guidance from experts. For advisors who want to leverage the capabilities of technology, this presents an opportunity: to position tools as beneficial to clients while promoting their role alongside it as critical.

Here are some tips for introducing a combined “tech and expertise” package to clients, and for helping manage their expectations for what today’s tools can – and can’t – do for them.

Don’t underestimate clients’ desire for digital tools

Digital tools, which just a few years ago were so uncommon that they could make a firm stand out from the crowd, have become must-haves for doing business with all age groups, particularly millennials.

According to an Ernst & Young report, “More and more, clients want online tools and mobile functionality as well as a seamless customer experience that is fast, convenient, and intuitive.” In other words, without technology, you may be at a distinct disadvantage as potential clients evaluate you alongside other firms. Even a half-hearted approach to adopting the right technologies can have its liabilities, namely burdening your firm with avoidable costs and heightening your exposure to risk.

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Position technology as added value to clients

Automated investment technologies can take on many of a firm’s repetitive, low-value tasks performed behind the scenes, like rebalancing and tax harvesting, which helps allow you to focus your time on revenue-generating work that can have greater value to clients. Position your use of technology as a way to help ensure that clients are getting more of your time put to use helping to improve their portfolios. This can give investors added confidence in your recommendations — and they may also be happier about paying fees when they know that the work you’re doing is focused on outcomes, not on “busy work.”

Determine the level of control you provide

Once introduced to investment management technology, clients can expect to have more control over their accounts. Advisors shouldn’t fear giving clients some amount of control, especially those they believe are highly capable of understanding and leveraging information. But it’s important to first determine which clients may do best with this added level of control, then identify how much of it they should have. As you evaluate different technology options, look for ones that offer the flexibility you need.

Don’t assume older clients will take a pass

Because high net worth individuals (HNWIs) tend to be Baby Boomers (people between the ages of 54 and 72), you may think they’ll be averse to adopting any technology you put in front of them. But actually, HNWIs often possess a high level of digital literacy and appear prepared for more.

A study by Pew Research Center goes so far as to label this generation as tech adopters and learners who are used to technological life enhancement. Because they’re also the wealthiest generation in American history, they (and their children, who will inherit their wealth) should, in fact, be a focus as you roll out new technologies.

Firms that leverage and promote a combined “tech and expertise” offering can align themselves precisely with what Baby Boomers and millennials say they want today — a level of service that’s both personalized and “modern.” By supporting your skills and insights with smart, intuitive digital tools, you can improve the client experience and help set the stage for more productive conversations in the future.



Alexander Choi

Jung Min-seo

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