Planners: Get Ready for These 3 Changes Post-Pandemic

You may consider wealth technology to be a collection of various tools that help you manage client portfolios and automate account administration tasks. In its relatively short lifespan, wealthtech has proven to be extremely valuable to advisers and their clients because it has saved advisers time—time which they can spend serving their clients and growing their practices. And the way I see it, its continuing evolution will likely change the advice industry forever.

Take the most recent market downturn as an example. It was the first major stress test for wealthtech as we know it. By and large, the technology did its job. How do we know? Trading and rebalancing algorithms kept investment decisions in line with individual risk tolerances and goals, enabling planners to focus on keeping clients calm under intense market conditions. To be clear—the real value of wealthtech is that it is designed to provide consistency by dynamically matching individual investors to the right asset allocation for their investment goals. Some people say that wealthtech is all about higher returns. Respectfully, I say they’re wrong because, in my opinion, it’s all about better results.

As this technology continues to evolve at a rapid pace, we continue to have our eyes on the future and what financial planners can expect. If anything, the pandemic has only accelerated the need for more comprehensive and sophisticated software.

Here are three key changes that I think will likely impact your role as a financial planner:

  1. Advice is (already) the new alpha. The days of judging the wealth management industry on investment performance are numbered. I believe the adviser of the future will add the greatest value through personalized planning—not by mapping out life goals on a timeline, but by serving as a personalized CFO who handles everything related to money. Clients wondering how to navigate Paycheck Protection Program loan applications? You should help with that. What about drawing up a budget for their child’s wedding? Yes, you should help with that too. How about navigating tax savings for snowbirds? Absolutely. Better yet, be the hub that aggregates your clients’ legal and insurance advice. Advisers need to play an increasingly active role, and it will go a long way in terms of client retention and referrals. Thanks to wealthtech taking on the bulk of the wealth management process, clients can receive the level of personalization they have come to expect.
  2. Consolidation will pick up. Consolidation can lead to growth opportunities and that isn’t limited to wealth management. Take Amazon’s acquisition of Whole Foods, for example—it enhanced innovation for both companies and led to a better customer experience. Why is this good news for planners? Increased consolidation coupled with technological innovation creates a natural path to advisers as a one-stop-shop for financial guidance, resulting in better overall customer experience—for you and your clients.
  3. Integrations will become deeper and more meaningful. It wasn’t too long ago when you had to use one program for your remote keyboard and another for your webcam. A lot of wealthtech platforms are at a similar stage now. Financial advice software is starting to behave more like the iPhone, where various apps and controls are housed seamlessly under one roof. With more consolidation, there will be better integrations. More meaningful integrations should mean improved adviser and client experiences.

Though much of the world has slowed down in recent months due to the pandemic, make no mistake—financial planners are more valuable now than ever. The changes coming to this profession will come quickly. You’re in a position to add value for your clients in totally new and innovative ways. Wealthtech is a catalyst for this change, and I encourage you to fully embrace it.

Mike Kerins is the founder and CEO of RobustWealth.