Bernie Clark Calls on RIAs to Embrace New Technology

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“Think beyond the demands of now, remove the distractions and act with the future in mind.”

This was the idea championed by Schwab’s Bernie Clark in last month’s IMPACT conference.

Besides the regular PR mumbo jumbo in his speech, Bernie encouraged RIAs to embrace new technology in the increasingly competitive landscape. He laid out several areas where RIAs could improve and differentiate themselves from the rest… Among them: connecting with clients, making technology a differentiator, and going paperless.

How tough is the road ahead?

Schwab’s Independent Advisor Outlook Study (IAOS) polled 821 RIAs across the country. The findings of this study revealed a lot about how RIAs perceive the competitive landscape going forward. The majority of advisors are optimistic about the future, with 70% of advisors positioning their business for future growth. However, 71% of advisors also recognize that there will be increased competition for new assets over the next five years. Looking forward, advisors believe that their top three competitors will be regional RIAs, national RIAs and online investment advisories. The latter is a shift from previous studies, highlighting the importance for advisors to have an online presence.

60% of advisors believe the need to differentiate themselves is greater than ever.

This is in the context of increasing competition and also changing demands from clients. 44% of advisors believe that clients will want a different service model 10-20 years from now. However, due to rapid changes in technology, they are unsure of what the service model will look like. Still advisors predict that clients will seek advice, rather than consolidate assets, when looking to plan their financial future.

Though there are still question marks over what the future holds for the independent advisor, it’s clear that advisors will need to adapt in order to face the future challenges of competition and changing needs. Bernie states that independent advisors are best poised to understand the changing landscape, since they have close relationships with the clients they serve. However, “incremental steps” must be taken to ensure advisors remain in that position.

3 Key Ways to Prepare and Differentiate

1. Strengthen your connection with clients

Independent advisors differentiate themselves from other alternatives due to their strong connection with their clients. In order to maintain and even strengthen this connection, advisors must be aware of how to communicate with the next generation of clients. Bernie noted that the next generation of clients will be “harder to engage, will know more than you think, and will expect to interact with you in different ways”. Technology can help on this front. Having an online presence is the key to prepare yourself to serve future clients. The next generation of clients will have spent a good portion of their lives online, and are used to digital delivery of services. Embracing social media and online client portals can help you to “speak” to those future clients.

2. Make technology a differentiator

How you use technology to stand out against the wave of new competition will determine your success relative to the rest. Technology has grown beyond being just the infrastructure of an advisor’s business. It’s now the foundation for an advisor’s ability to meet the needs and expectations of their clients. 86% of advisors believe that future clients will require an “anywhere, anytime” service model. How you adapt to those needs, with the technology available to you, will determine how well you fair against the rest. The technology you employ should be the core of your business model.

3. Reduce the paper pile

It’s surprising how paper can reduce the efficiency of a business, regardless of the industry. Being able to email and instant message, instead of sending a letter, was a huge innovation. Now more and more business tools are going paperless. The advent of electronic signatures and paperless reporting has been increasing the speed and efficiency of financial services. Again, embracing these new technologies can help you to stand out against the rest. Grab a free guide on How Financial Advisors Transition To Paperless.

Overall, the message is clear. The tools and technology for advisors is out there. In order to be prepared for the changing landscape, embrace new, efficient tools. Growth is possible in the increasingly competitive landscape, all you need to do is take steps forward.

Jason is an aspiring finance professional, working towards a BSBA in Finance. Currently an Intern at Blueleaf, Jason’s interest in the financial industry comes from a strong ability in analyzing and planning for the future, as well as a general appreciation of how markets work. Feel free to connect with him on LinkedIn!