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A couple of years ago I was leading organizational growth efforts for a large RIA. We made the decision to develop a digital advisory solution. We were a bit early in the game – there were no custodian-driven offerings, Betterment Institutional was just rolling out and the majority of robo-advisors were focusing exclusively on business-to-consumer (B2C) models in their approach.

The development of this digital advisory solution took far longer than expected, looked only moderately like we anticipated, and was not nearly as initially impactful as we hoped. Was the rollout a mistake? No. Was our timing off? Possibly due to the limited initial options. Should advisory firms be looking to incorporate digital advisory solutions into their businesses? Absolutely!

The landscape of digital advisory solutions available to advisors is far different than it was only two or three years ago. All of the major custodians have one-stop offerings and most, if not all, of the initial B2C robo-advisors have turned their attentions toward the advisory channel. Even with more options available, in reflecting on my experience there are eight lessons that other firms can learn from as they look to bring digital advisory solutions into their businesses.

Eight key lessons learned:

  1. Know where you’re going before you begin the journey – Do you want a standalone solution as a new business unit? Are you planning on transitioning your existing business to digital? Maybe you want to gradually incorporate digital technology? These types of questions are crucial. If you don’t know where you’re trying to end up you are almost certain not to get there.
  1. Get all key stakeholders fully onboard from the very beginning – Digital advisory is a radical change for most firms and change is sure to generate fear, apprehension and opposition. If any key stakeholders are not fully onboard with the development of a digital advisory solution, it will be nearly impossible to get the rest of the firm to make the sacrifices necessary for success.
  2. Have designated roles and decision-making processes – Digital advisory is often outside the knowledge base and expertise of most advisors, especially founders and CEOs who have spent their entire careers in the advisory industry. Delegating key decisions to others in the firm with the passion, knowledge and expertise eliminates unnecessary, disruptive effort and is critical to staying on time and on budget.