The AdvisorEngine Blog

Wealth management's digital age

Written by Carly de Diego | Nov 18, 2019 3:30:08 PM

Technology has entered every part of my life. 


At home, I am surrounded by it. In the kitchen cooking, throwing in a load of laundry or helping my kids with homework - everything requires something digital to function.

At the office, my Macbook has replaced all my old tools - pen, paper, scanner, and fax.

On the road, I’ve got something high-tech in my pocket, on my wrist, in my car - the list goes on and on. Everything has a screen and buttons to push. 

It’s no wonder that a new digital age has entered wealth management.

Digital clients 

Client expectations are changing rapidly. 

People expect secure access to their financial information 24/7 on their phones, computers, tablets and mobile devices. And it’s clearly not just millennials. This new digitally-connected cohort cuts across age levels and income levels. 

Over the next few decades, we will be witnessing the largest-ever intergenerational wealth transfer in history – when baby boomers transfer their wealth to their children. It is a phenomenon valued at around  68 trillion dollars

To capture this opportunity, financial advisors must establish intergenerational relationships - with technology at the center.

Digital financial advisors

According to the Certified Financial Planning  (CFP) Board demographics numbers, the largest age range for CFPs is 40-59. The average age of a financial advisor is 51.

Yet, a large number of advisors are now in their 60s. This means the fate of thousands of firms and millions of clients over the next decade remains in doubt. Succession planning is vital.

With the transfer of wealth on the horizon combined with these statistics, it’s time to look for ways to attract millennials to fill the shoes of baby boomer advisors. You must embrace those advisors who specialize in working with GenX and GenY investors. 

The future advisor must be able to make a connection with the next generation of clients. Technology is the KEY to that connection  - technology bridges the gap.

Digital wealth management leaders

Since I entered the industry 15 years ago, the need for leadership has not changed. But the tools and required skill sets have changed exponentially. Technology know-how has become a critical skill-set in order to lead and manage employees effectively. 

Technology strengthens efficiencies. By improving the way advisors do their jobs; these capabilities make them more efficient and free from the burden of tedious, repetitive tasks - strengthening performance and improving job satisfaction.

Through technology, advisors can create unique offerings for clients. Technology also enables a more flexible work, life balance. Employees have access to all their documents in one digital space - available from a laptop, at any time. Meetings can be attended remotely if needed. Communication and collaboration are seamless.

The future of your business and the commitment to your employees should be digitally driven to achieve your strategic business goals.

Digital future of financial advice

Statistics show that companies are growing 30% to 40% when they are innovating. 

Recently, I had a conversation with one advisor who shared the story of his career with me. This advisor worked for an “old school” wealth management firm. He struggled to get buy-in from the firm founders and upper management to expand into digital technology offerings. He argued that innovating would create better advisor and client experiences across the board. No one listened. 

After much consideration, this advisor finally decided to break away and start his own RIA firm. This decision wasn’t easy, but he felt trapped. 

Over the next couple of years, this advisor managed to grow his new RIA firm from 20 million AUM to 80 million AUM. He attributes his growth to hard work and innovation. Ironically, the firm that he left has lost $2 billion AUM during the same time frame. 

By not being open to change and embracing new technologies, this “old school” firm lost clients, advisors and valuable staff. Don’t fall victim to the same. 

Embracing new technology

By embracing this digital age and committing to employees, clients and recruits you can secure the future of your firm. 

AdvisorEngine® wants to be a resource during your succession planning. Are you ready to utilize technology to grow, scale and successfully transition your business? Start by asking questions, know the mistakes to avoid and be a savvy buyer!