Digital-First Disorientation: The New Wealth Management Problem


Last Updated on May 11, 2021 by Carlo Navarro

One of my fondest memories from 2019 is an afternoon playing eighteen holes at Torrey Pines Golf Course in La Jolla. I had wrapped up a successful conference (SSG) that week and decided to do something nice for myself before flying home the following day.

That was then. This is now. The SSG conference didn’t happen in 2020. Neither did TD Ameritrade’s LINC. Schwab Impact went the online route, but it wasn’t the same. Watching the world on video doesn’t give me that same conference experience.

Prospecting and new client acquisition have changed also. Those Chamber of Commerce mixers with free coffee and donuts? Gone. Teaching financial literacy classes in person? Good luck getting attendees for those.

Our profession has gone digital-first, permanently.

Client Behavior won’t Change in 2021

I read an article in Forbes last August that covered the online conference trend in 2020 and projections for how it might change in 2021. It brings up some interesting points about human and economic behaviors that could lead to an increase in online engagement next year.

On the human side, crowd anxiety brought about by the Covid-19 pandemic is not going away any time soon. This applies to your clients too. Gathering together, or even meeting one-on-one in person, will not be the first preference for many Americans in the coming months.

From a technology perspective, 2020 was a test of how we can effectively communicate virtually. The tech providers passed that test with flying colors. Applications like Zoom and Google Meet have been facilitating conferences and client meetings for several months.

The best part? Clients are loving it. In most cases, it’s more convenient to meet remotely. Between juggling homeschooling, work, and a global pandemic, most clients appreciate the breather they get by being able to check on their money via a Zoom call.

Advisors who offer virtual client service are gifting their clients a bit of respite during an otherwise-chaotic time — a respite they probably won’t want to relinquish even after social distancing requirements ease up.

Finally, there’s the budget concern. I spent several thousand dollars on the SSG trip in April of 2019. Schwab Impact cost me $450 to attend online in 2020. I might miss the camaraderie of seeing all my friends in the industry, but I could always just book a golf vacation.

If You Don’t Adapt as a Digital-First Advisor, Your Competitors Will

Individual wealth management firms are reacting differently to the current digital-first situation. Some are treating it as temporary, gambling that “the way we’ve always done things” will somehow become the norm again. That scenario is unlikely.

The other camp is embracing the digital-first transformation and thriving in a new virtual advisory environment. Many of these firms already saw this coming.

Covid-19 didn’t light the fire for a digital revolution in wealth management. It just accelerated it.

However, even if your firm has been working toward remote client service, treating it as an afterthought or simply a checkbox on a list is a mistake. A remote client experience is now a primary way to interact with clients and a key way advisors deliver their value proposition. As a result, it deserves the same thought and planning that your in-office experience traditionally has. Maybe more.

Financial Advisors (FAs) are Technologically Challenged for Remote Client Service

This goes right to the heart of the problem in our industry. Despite huge strides in fintech over the past decade, many advisors are still using antiquated technology. Wealth management is a relationship business. Historically, FAs don’t consider software to be part of that process.

Reluctance to embrace technology is the primary reason for digital-first disorientation.

Like anything else in life, resistance leads to unmanageability. That’s what we’ve seen in 2020. Advisors are begrudgingly going remote, but only as a last resort. The disorientation is an unfortunate side effect of getting too comfortable in the status quo and using old technology; when the tides turned and client service went virtual, advisors faced a flurry of confusion about how to adapt.

Going forward, the ability to effectively offer remote client service will be a differentiator for wealth management firms. The advisors who are capable of doing this well will thrive in 2021. Those who are still technologically challenged will struggle. They’ll need to evolve to survive.

Your Firm’s Operations are Broken and Won’t Adapt Well to Virtual Client Service   

I wrote a piece back in 2013 about the “Rise of the Franken-Product.” Software developers were cobbling together unrelated products to create supposed “super tools.” This was the opposite of our philosophy of an open ecosystem with API integrations.

Those franken-products, now running in the back end of many advisory firms, are causing front-end operational nightmares. Most require daily maintenance, and few adapt well to a virtual model. Remote client service is nearly impossible with some of them.

To complicate the situation, custodians in the RIA space are now offering these obsolete software packages as “all-in-ones” to their advisors. That sounds appealing, because everyone wants a system that can do it all, but it may cause more problems than it solves.

Over the next few weeks, we’ll delve deeper into this issue and offer some solutions. Remote client service is here to stay, so it has to be a primary concern for advisory firms in 2021. Your software stack needs to complement that, not hinder it.

Ready to learn more about Blueleaf?


  • Kevin D. Flynn

    Kevin D. Flynn is a former Head Coach at Blueleaf and founder of Flynn Consulting, LLC, a business and financial coaching service for startups and small business owners.

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Kevin D. Flynn is a former Head Coach at Blueleaf and founder of Flynn Consulting, LLC, a business and financial coaching service for startups and small business owners.
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