Is Technology Disrupting Client Engagement? "No," Say Savvy Investment Firms -- They Use Technology To Strengthen Relationships And Help Clients Make Better Decisions

BALA CYNWYD, Pa., Nov. 14, 2016 /PRNewswire/ -- Technology is disrupting the investment industry. But savvy investment firms have discovered that there's an answer to this disruption – technology itself.

Technology gets the blame for a host of problems like the overwhelming, 24/7 flood of information, and the robo-advisor threat. But for some firms, technology isn't the problem – it's the solution. These firms are making strategic technology choices and combining the best of technology with the best of human advice. The result: Investors equipped to make better decisions, and stronger relationships between investors and clients.

What these firms are doing – and how others can follow their example – is the subject of a new commentary published by InvestEdge, a leading national provider of wealth management, data analysis and reporting solutions for the investment industry. It argues that it's possible to use technology to "up the ante" on client engagement.

According to the commentary – titled From Convenience to Confidence: To Drive Client Engagement, Combine Human Advice With the Right Technology Solution – the best answer isn't to fear technology. It's to make technology choices that lead to a better client experience.

"Technology can be a threat to the traditional advice-driven model, but it can also enhance the quality of advice and create stronger client-advisor relationships," says Brian Burns, President of InvestEdge.

"The most fundamental business question is, 'What are clients struggling with?'" says Burns. "The answer is, too much information and the question of how to get good advice. That means that firms should stop thinking about technology in terms of information, and instead start thinking about it as a tool for business intelligence and decision support. The highest value and best use of technology is to support better decisions and produce better results."

The problem: too much information and robo-advisors in place of human advice. The answer: high-level analysis and decision support

The commentary describes two main technology-driven challenges for investment firms – a flood of "always on" information that can make it harder, not easier, for investors to make decisions, and the rapid spread of automated robo-advisor systems that replace human advice with formula-driven investment strategies.

In response, firms should use technology to turn raw information into insight, and to put the advisor back in the spotlight. According to Burns, "There should really be just two major areas of focus. The first is transforming a high quantity of information into a high quality of information, so that it delivers not just a flood of data but rather actionable intelligence and insight. What's required is a decision-support system. The second is using that information and insight in order to deliver advice that leads to higher client confidence and satisfaction."

Technology is not just for millennials – all investors, including high net-worth individuals, rely on it

Technology solutions should be designed for all clients, not just tech-reliant millennials, the commentary says. In fact, according to research by CEB TowerGroup, 65 percent of high net-worth (HNW) individuals prefer to interact with their wealth managers using an integrated approach, using some combination of technology and in-person interaction for accessing accounts, products and services. Nearly as many prefer online access for news and insights into financial markets.

To design an effective decision-support system, firms should focus on key points where investors need insight

The central element of an effective decision-support system is a client-facing portal that advisors can use to deliver the firm's recommendations. To design it, firms should focus on the key moments when investors have the greatest need for decision-ready information and insight:

• When making asset allocation decisions.
• At the threshold of new lifestages – when starting a family, changing careers or retiring (and starting something entirely new).
• When deciding whether or not to change the advisor relationship.

Firms should also consider how the portal can serve to involve the client in the workflow, and provide them with transparency into the investment process.

Critical business questions should guide the development of the technology solution

Critical questions about the firm's business should drive the design, the commentary says:

• What kind of information will the firm need to provide, in what format and with what frequency? Will it have to vary by client?
• Will the information be deliverable across platforms? "It should – investors of all demographic profiles expect mobile access," Burns says.
• How easy will it be to connect the portal to the reporting system, so that information and reporting flow seamlessly, with minimal impact on productivity, resulting in a set of services clients will value?
• Can the portal be connected to the firm's customer relationship management system? "Investors' key decision points are also moments in which you can establish, intensify or expand your relationships with clients," Burns explains.

The right technology partner can help firms navigate the technology, and avoid the trap of doing too much, too soon

A technology partner – one that understands the business – can help the firm navigate a confusing array of options and make the right technology choices, the commentary says. "The choices aren't easy and there are many ways for firms to misstep," Mr. Burns says. "Common mistakes include focusing only on the technology rather than the business, focusing on one client group such as millennials rather than all clients, building a solution that serves clients but not advisors, or building the complete system all at once. It's not necessary to take on the whole project at once – instead of biting off more than you can chew, build the solution in stages, at a pace that you can manage. A strong partner will understand that and help you set the right pace.

The most important single factor is to have a plan – a technology plan that matches the business plan. "Firms get into trouble when they acquire technology without first having a plan," Burns says. The key to success is to make savvy technology choices – focus first on what clients need, then build a technology solution to meet that need. Technology works when it gives investors not just more information but better information, and when it helps the firm deliver high-level advice that makes it more valuable to clients."

About InvestEdge, Inc.

InvestEdge is a leading provider of innovative advisor solutions to banks, registered investment advisors, family offices, and brokerage firms. Founded in June of 2000, InvestEdge is one of the fastest-growing providers of wealth management solutions to the UHNW advisor market. Through a patented data unification process, supported by an integrated wealth management platform, InvestEdge simplifies complex wealth management operations and automates key front-office functions including portfolio management, performance measurement, client communications and reporting, compliance monitoring, trade automation, data aggregation, and client portal solutions. To learn more, visit www.investedge.com or call 1-800-830-1839. InvestEdge is a registered trademark of InvestEdge, Inc.

SOURCE InvestEdge, Inc.

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