Retention is All About Relationships – How to Lock Arms with Clients

Published by Judson M. Stone, Director - Senior Account Executive, Business Development
April 7th, 2017

Technology now permeates almost every corner of the financial industry. Banking, payments, wealth management, and a host of other financial services are now powered by technology. Financial technology is its very own niche and has become known by its own unique nickname: Fintech. Fintech is growing by leaps and bounds as financial institutions embrace innovation.

This technological revolution has brought some disruption to the wealth management industry, which has been traditionally more people-powered and founded on personal relationships between investors and advisors. Today’s advisors are tasked with finding balance as they leverage technology to enhance their service without sacrificing the personal connectivity that is central to nurturing lasting investor relationships.

Technology Offers Significant Advantages

Technology offers myriad advantages to the financial world, most notably when it comes to numbers. Technology has revolutionized numbers crunching and analysis by accelerating calculations and improving their accuracy. It simplifies financial reporting and offers fast, easy access to information that helps improve and expedite decision-making.

Financial data solutions are the most reliable way advisors can keep records and appointments, and they dramatically boost the speed, efficiency, and accuracy of back-office responsibilities. Advisors save time by using CRM and onboarding tools, which in turn, frees them to focus on more strategic aspects of their jobs. Technology actually enables advisors to connect with more prospects and manage more clients.

In financial management, a lot of communication is done via technology. From marketing to personal communications, technology facilitates a faster exchange of information that boosts the pace of business. Technology facilitates communication and helps to keep advisors and clients in touch with each other.

Challenges of Technology Reliance

The downside to technology in the wealth management industry is that it can be a massive distraction. Because technology is ubiquitous and supports nearly every aspect of the wealth management business, it is easy for users to become overly reliant on it. Technology dependency can weaken personal connections and promote distracted and detached ways of doing business. By enabling advisors to increase the volume of work they are able to accomplish, technology can inadvertently contribute to a decrease in the number of face-to-face interactions advisors have with their clients. It can cause advisors to lose sight of the fact that they must still build sound relationships to effectively steward wealth.

The weakening of investor relationships due to technology overuse is unsurprising in the context of how today’s financial relationships come to be. Often, clients identify and select their advisors, deposit money, and execute documentation requirements all online. They may even attend virtual meetings, and most are likely to check the status of their investments and approve trades online.

Through all of these transactions, personal connection is minimal, so no foundational relationship ever grows. Under such impersonal circumstances, it is common for investors to simply find a new advisor when they become dissatisfied. If advisors do not work to cultivate relationships, they become commoditized and can be replaced at the drop of a hat especially with the transitioning of wealth. This is bad news for firms, as it can ultimately lead to asset attrition.

Leveraging Technology to Build Lasting Relationships

Clients appreciate technology’s ability to give them freer access to data, but they do not want it to replace their one-on-one relationships with advisors. As their wealth grows, they want support from a human advisor. They recognize the need for a trustworthy partner to help guide them through financial crises and appreciate the personal reassurance an advisor provides.

Successful advisors excel at balancing their use of technology with interpersonal connection. They exploit the time-saving, efficiency-boosting benefits technology affords them to personally engage with their clients in meaningful ways that strengthen their relationships. Technology supports them in remembering things like client birthdays and anniversaries, and it helps them to stay on top of their personal interactions. Advisors also use tools to measure and manage the actions they are taking to build relationships with their clients.

Wealth managers leverage technology to deliver value to investors in terms their clients understand. Goals-based reporting, for example, is an excellent way to provide investors with useful information that relates specifically to their goals and milestones.

Tools for Supporting Investor Relationships

With the right tool, advisors can gain instant access to real-time results that help them keep their clients up-to-date on what is happening with their investments. They can leverage technology to optimize their daily workflow and plan strategically for long-range goals.

An automated, scalable solution offers advisors flexibility and the opportunity to convert data into relevant investor reports that contain actionable insights for guiding their clients. Using advanced financial technology relieves advisors from time-consuming back office work to focus connecting with investors and delivering value that translates to asset growth over the long run.

To support advisors, First Rate has developed CORE™, a holistic, web-based investment performance and client reporting software for wealth management firms. Featuring a full suite of seamless wealth management applications powered by the proven First Rate performance calculation engine, CORE is designed to meet the complex, evolving investment measurement and client reporting needs of today’s financial service marketplace.

To learn more about CORE, visit http://firstrate.com/solutions/first-rate-core/.

 

About the Author: Judson M. Stone, Director in Business Development, has been with First Rate since 1995. Jud works as an Account Manager developing new and current opportunities with prospects, clients and strategic partners. Stone has served in multiple groups at First Rate, working as a Performance Analyst, Product Developer, Business Analyst and most recently as Development Manager in Professional Services. Connect with Jud on Twitter @judson_stone and on LinkedIn.

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