Five Ways to Build Wealth Management Relationships in a Digital Era

Bill Martin, CFA, Chief Investment Officer, INTRUST Bank

Technology is enabling financial advisors to develop better relationships with their clients. In the past, advisors had to split their time doing manual tasks and servicing clients. Today, technology allows advisors to devote more time with clients, spending less time anchored to their offices. Accordingly, financial professionals are able to know clients well and build meaningful client connections.

Below are five ways innovative advisors are using technology to foster enduring wealth management relationships.

1. Collaborate with clients using financial planning and account aggregation tools. Wealth managers traditionally have focused their efforts on managing investments. Accordingly, advisors had few reasons to interact with clients, except to win new business, review account performance, and pitch new investment ideas. In recent years, many wealth managers have refocused their efforts on goals-based planning. This holistic approach requires advisors to know their clients’ total wealth and unique goals. Advisors collaborate with clients to build personalized financial plans using interactive financial planning technology. Financial goals, such as retirement income, funding college, and charitable giving, are discovered and prioritized. Risk preferences are determined through advisor-client interactions, and probability of goal achievement is analyzed using financial planning applications. Client wealth, including all assets and liabilities, is identified using account aggregation technology. When aggregation and planning tools are integrated, financial plans can be monitored in real-time, allowing advisors and clients to assess the impact of market changes and client spending on goal probability. This tech-enabled planning approach promotes deeper client engagement, as investors’ goals become the focal point of client interactions rather than products and investment performance.

Current and emerging technologies are empowering advisors to enhance collaboration, simplify onboarding, customize portfolios in scale, enrich client communications, and improve investor outcomes

2. Simplify account opening through digital onboarding. Client’s initial impressions of their wealth management relationships often form during account opening processes. Historically, lengthy delays and manually-intensive workflows set the stage for client dissatisfaction. With the emergence of robo advisors and digital advice offerings, a new precedent of easy, streamlined account onboarding has raised the bar for all wealth managers. Clients now expect simplified digital experiences when establishing new accounts. Whether or not wealth managers incorporate digital advice into their practices, advisory teams should re-evaluate their account opening procedures. If opportunities for improvement are discovered, consider leveraging the account opening tools of robo solutions into workflow processes. By embracing digital onboarding, positive first impressions likely will become the norm for new clients.

3. Customize portfolios efficiently with model hubs and tax-smart trading technology. In order to manage a large book of client accounts, wealth managers often rely on the use of model portfolios. Although efficient, this investment approach typically generates higher tax bills for investors and limits portfolio customization. With the emergence of model hubs, advisors can now source third-party investment solutions comprised of individual securities from model exchanges. These portfolios, when traded using tax-smart rebalancing technology, can be customized to minimize tax impact and to account for unique client preferences such as social criteria. Also, scalability is not lost, as these model and trading ecosystems are engineered to accommodate mass customization. As a result, advisors are able to manage large books efficiently, and clients value the tailored, tax-aware approach.

4. Enrich client communications through virtual meetings and digital portals. In the past, advisor-client interactions included in-person meetings, emails and phone conversations. Today, the potential to engage with clients consists of many more options. One such example is the use of virtual meetings. Through video conferencing and web meeting applications, advisors are able to visually interact with clients essentially anywhere in the world. Thus, virtual meetings enable advisors to expand their geographic reach. This technology also allows clients to meaningfully connect with their advisors while traveling, home, and abroad. Another way advisors can enrich client communications is through the use of digital portals. These applications allow advisors to securely message their clients and deliver real-time reports to client vaults. Moreover, digital portals give clients 24/7 access to their wealth management accounts via mobile apps and secure websites.

5. Improve investor outcomes with artificial intelligence (AI) and virtual reality (VR). Imagine an environment where client behaviors are predicted with high degrees of accuracy, and investor experiences are virtually rendered in 3-D. Given the rapid advancements in AI and VR, predictive analytics, and immersive simulations may begin to surface as mainstream technologies in wealth management. In the not-too-distant future, AI applications may present advisors with best next actions for servicing and retaining clients based on deep analysis of internal and external client data. VR has some similarly compelling use cases for wealth management. For example, VR could be a useful educational tool to teach investors the impact of their financial decisions. Retirement outcomes could be simulated based on savings, spending and investment choices, encouraging younger investors to take actions now to increase their odds of reaching their financial goals.

In conclusion, current and emerging technologies are empowering advisors to enhance collaboration, simplify onboarding, customize portfolios in scale, enrich client communications, and improve investor outcomes. As a result, client engagement and satisfaction tend to increase, and strong client relationships provide the foundation for thriving advisory practices in the digital era.