Constructing Your Tech Stack: 5 Essential Questions for Financial Advisors
By Alan O’Donnell, MBA, MA, ChFC, CLU, RICP, CASL
Director of Advice Engagement, Asset-Map
The value advisors fundamentally provide to their clients is their empathy and insight.
At the same time, to be competitive today is vital to run your business as a tech business. Now is the time to consider how your tech stack reinforces your value proposition and where you may have opportunities to improve.
How do you think about building out your advice tech stack? At its core, the process needs to center on your business model: who you serve, how you serve them, and how you monetize your services. Those are essential considerations to any tech stack, but constructing a tech stack for advice offers unique challenges.
These are exciting times to be an advisor, especially as you continue to add tremendous value to clients navigating an era of uncertainty and significant change. But these are challenging times for advisors who not only face dynamic regulatory and tax environments, but rapidly evolving technology capabilities and heightening consumer expectations.
However, an advisor’s value is also challenged by financial institutions. To maintain relevance in the eyes of customers, institutions are increasingly enhancing their client-directed features. Capabilities like financial planning, goals tracking, and what-if scenarios are increasingly accessible while previous value-adds like asset allocation optimization are now simply table stakes. Consider, for example, the employee-facing capabilities offered through Empower, Fidelity, and Schwab to get a feel for what customers can expect simply by participating in their employer’s 401(k).
To address this, advisors need to double down on their core value proposition: themselves. To be sure, advisors must continue investing in traditional advisory capabilities, including CRM, financial planning, and portfolio management. These are now essential parts of the advisor tech stack. But for long-term competitiveness, advisors need to bet on themselves by seeking technology that amplifies what makes the interaction with the human advisor so valuable.
The emerging need for advisors is to ensure they are investing in the advice interaction process with the client and to lean into advice engagement. This means creating a cohesive advisor/client experience, from introductions and interactions to guidance and implementation. While marketing, planning, and implementation increasingly become systematized and available digitally through institutions, there’s an opportunity for advisors to focus on the advice interactions themselves.
Ready to get started? Here’s an exercise to reflect on the way your practice is structured and how you are investing in technology.
First, write down your target market and your value proposition to them. Referencing the AdviceTech Compass framework, note the vendors you currently have in place and the role they play in your process, and especially focus on the client-facing capabilities. Then consider:
Do your client-facing capabilities align with a cohesive client experience? Are your core client-facing tools integrated with both process and data?
What percentage of your tech investment is going into each of marketing, discovery, planning, and risk/allocation management?
Do your tech investments reinforce your value proposition and human-centered advice? Do they amplify your ability to efficiently and deeply serve more clients?
In what ways does your tech stack enable your review meetings to be more efficient and impactful to the client?
In what ways do your tech investments enable empathy and understanding to your client and make it easier to impart insight to them?
To position your practice for success today and in the future, are you investing in the capabilities that reinforce the value of you? Know that your empathy and insight are invaluable to clients who are otherwise awash with access to information and capabilities like never before.
To help you ensure your competitiveness, review the AdviceTech Compass - a tool to navigate the world of advice tech - and especially focus on the capabilities that are essential for your value prop.
Want to know more about how Asset-Map can contribute to your advice engagement process and amplify your value as an advisor? Schedule a demo today!