With everything we do, technology can improve our lives. From having a virtual assistant in our back pockets to having the world wide web at our fingertips – it’s only natural that a financial advisor be at the forefront of this technology.
Through modern technology, a financial advisors’ life can be made easier, especially with the use of a Robo-advisor. With the way the world is advancing, we need to understand what a Robo-advisor is and how it can benefit us in the financial services industry.
So, what is a Robo-advisor? What makes them unique? Robo-advisors are financial planning services that are algorithm-based, and on a digital platform. There is very little human interaction involved with a Robo-advisor. To make an informed decision, they gather everything they need to know from a client, and with this information, they invest a client’s assets on their behalf.
Robo-advisors combine the wealth and practice management components of a financial advisors’ business, rounding out a firm’s ability to give clients more self-control. This, in turn, frees up the advisor, lending them time to concentrate on clients’ essential issues.
Advantages of a Robo-Advisor
One of the primary advantages of using a Robo-advisor is cost-effectiveness. There is an annual management fee payable, unlike the ongoing fees paid to a financial advisor.
Another critical component of using a Robo-advisor is the availability of the platform. When connected to the internet, your Robo-Advisor will be at your beck and call, whereas humans are not available 24/7. This is modern technology at its best!
Robo-advisors do not stick to one portfolio when investing assets. They diversify portfolios, which can prevent a downward trend during volatile times. By doing this, you can rebalance your portfolio.
Platforms with integrated Robo-advisors include AdvisorEngine and VestmarkONE. Both platforms maximize productivity for the financial advisor for workflow management, performance reports, portfolio construction, etc.
AdvisorEngine serves as a digital advice platform and helps financial advisors engage with clients and prospects. Tasks such as paperless client onboarding, goal-based financial planning, and performance reporting are all performed digitally. The management of relationships is more proactive, so the need for face-to-face interaction is greatly reduced.
Ways to use modern technology
There are many ways you can use modern technology to its full potential:
- Go digital when creating a new client profile. By doing this, you will spare time and money while boosting your productivity. You will save paper and never have a compliance nightmare again.
- Client Relationship Management (CRM)—improve workflow, increase productivity, create performance reports. These are all relevant to your financial practice and will give you the chance to assess and plan for your clients on a deeper level.
- By monitoring your compliance online, you will reduce financial risks and manage regulations.
- You can use a digital advice platform to store all your clients’ important documents in an online document vault. The vault keeps everything stored with accuracy, so you will never have to look for these documents.
The way forward
Wealth management is continually changing, and financial advisors need to evolve with technology in order to give their clients the best financial advice possible.
21st century clients are tech-savvy, which creates the need to incorporate human interaction with online technology. You can build a financial planning tool that benefits your clients by using your human intellect, along with the advanced technology of a Robo-advisor.
The future of financial advice lies in automated financial planning. It should not be something that scares you. Instead, embrace modern technology and maximize its full potential by combining the digital space with human intellect.
Robo-advisors are here to stay, now is the time to get on board and be ahead of your competition!