Technology Now Conspicuous By Its Absence

Technology first gave advisors a competitive advantage because it increased operational efficiencies so the advisor could spend more time serving clients.

Technology then gave advisors a competitive edge when it was used to provide more and better value added services than was possible manually.

In our digital society the right technology still has the power to give an advisor a leg up on the competition.  However, there has been a not-so-subtle shift.  The lack of digital tools in an advisor’s toolbox has become the quintessential example of something that is conspicuous by its absence.

According to a 2013 Fidelity Insights on Advice survey, one-third of investors said they would switch if advisors were not using technology to enhance their services.  As Ed O’Brien, senior vice president and head of platform technology for Fidelity Institutional, said in a press release, “Investors today expect technology woven into everything they do, and that includes their financial advice.”

The Fidelity survey also shows that 77% of financial advisors are making an effort to increase the use of technology in their practices, but nearly all (95%) see challenges in using it.  The most prevalent challenges are not knowing which tools are right for their practice, and how to integrate new technology into existing systems.

The shift in investor expectations is an irreversible trend.  Clients’ tolerance for advice sans technology will diminish rapidly, particularly with younger generations.

For tips on how to quickly integrate technology into your practice, check out the February 2014 issue of AdvisorFocus.

For more information on Fidelity’s Insights on Advice survey and what it means to you, read our recently published blog,Fidelity Finds Advisor Goal-Setting Shortcomings in Recent Study.