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Top 5 Ways Technology Improves the Client Experience and a Financial Advisor’s Life

August 23, 2022 Danny Kellogg By Danny Kellogg

Technology is advancing at a mind-blowing rate. Did you know that an estimated 127 new devices worldwide connect to the internet every second? With that pace, it’s estimated that by 2025 there will be 38.6 billion IoT (internet of things) connected devices (insert mind-blown emoji here).1

Smartphone adoption grew from 35% in 2011 to 85% in 20211, a period roughly parallel to the technology revolution in the financial advisory industry. It’s been challenging to keep pace, but to me, there are five ways that technology has measurably improved the client experience and a financial advisor’s daily life.

Account Aggregation

Most people’s financial lives are fragmented. It is common to have bank accounts, retirement accounts, investment accounts, insurance policies, credit cards, mortgages, student loans, auto loans and other financial accounts spread across different institutions. Off the top of my head, I count 11 separate institutions where my wife and I have accounts.

The ability to aggregate all those accounts into one secure portal with a simple, holistic view is priceless. To an advisor, account aggregation is essential to helping clients organize, understand and progress in their financial lives.

Financial Planning Software

Gone are the days of delivering a financial plan in a thick binder (and good riddance). Planning software available to advisors today is dynamic and fluid. It allows for creating sophisticated programs, incorporating various scenarios and updating plans in real-time with clients.

Be it a/an:

  • All-encompassing financial plan
  • Analysis of a specific topic such as Social Security optimization
  • Insurance needs analysis
  • Stock option planning
  • IRA conversion
  • Distribution planning

… what used to take hours of working in a spreadsheet only to produce a lackluster report can now be performed in a matter of minutes with a deliverable that impresses the client.

Portfolio Optimization

Do you remember what it was like before you had real-time access to what your accounts and investments were worth at any moment? It wasn’t all that long ago that you had to wait until the next day’s newspaper or a monthly periodical to see how your investments were performing.

We can debate whether instant access to information is good or bad for investor behavior, but the benefits of managing a portfolio are undeniable.

Like planning software, the technology available for managing investment portfolios has improved dramatically. It takes less to do portfolio implementation, rebalancing, loss harvesting and performance reporting.

More insights into risk metrics, tax location and tax efficiency elevate the level of portfolio management advisors can provide clients. This frees the advisor up to spend more time researching, creating content and communicating with clients.

Electronic Signatures and e-Delivery

Advisors, their team members, clients and Mother Nature all rejoice over this technological advancement.

Initiating and managing a client relationship takes a mountain of paperwork. Unfortunately, the amount of paperwork required only increases with recent legislation changes. The good news is that considerable account paperwork and disclosure documents can now be managed electronically.

Maybe going paperless won’t be enough by itself to save the planet, but it certainly improves all our sanities. And there is something to be said for that.

Video Meetings (and Messaging)

I come into the office almost every day. And I am always excited when a client wants to visit the office or meet in person. Nothing beats that face-to-face, human connection.

But the reality is that I also have at least one or more video meetings per day. I view this as a net positive. The efficiency of video meetings allows me to connect with clients when it is convenient for them, even allowing them to squeeze in the time on an otherwise busy day because they don’t have to travel.

I’ve also started sending clients short, personal video messages instead of calling and leaving a voicemail. I have received positive feedback about this practice and personally enjoy reaching out to clients this way.

Who answers their phone anymore these days anyways?

The Future is Bright

It all boils down to simply this: technology = time. More time with clients. More time with family. Less time needed to run a successful practice.

It is a great time to be an investor. It is a great time to be a financial advisor. I can’t wait to see what comes next.

Sources:

  1. “How Fast Is Technology Advancing [2022]: Growing, Evolving, and Accelerating at Exponential Rates”. Accessed Aug. 19, 2022.

Securities are offered through LPL Financial, Member FINRA/SIPC.

Danny Kellogg, CFP®, RICP® is an independent financial advisor in Greenwood Village, CO with over 10 years of experience in financial planning and wealth management. Danny enjoys using his experience and education to help clients discover how their financial resources can serve them. To deepen his knowledge and demonstrate his dedication to serving clients at the highest level, he became a CERTIFIED FINANCIAL PLANNER® and Retirement Income Certified Professional®. After gaining experience with both large and start-up companies, his passion for helping people fueled his desire to establish an independent advisory practice.