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How can you, as a leader in a profession that provides professional financial planning and money management services, reassure your team and your clients?
Given the enormous challenges we face, our clients, staff, family and friends need calm and confident professionals in their lives. People are concerned not just about their savings and investments, but also their livelihoods and health due to the coronavirus pandemic.
As a small business owner, I understand how the current realities feel. With this in mind, I offer the following thoughts, which I hope are helpful to you in the coming weeks and months.
Find ways to build rapport even when you can’t be in the room with your clients.
Clients want this type of relationship all of the time, but it has come into even clearer focus during the current moment, when the spread of COVID-19 has required many people to self-quarantine for their health and safety.
The technology your advisory firm uses will mean the difference between clients who feel reassured and confident, or clients who feel panicked and uncertain.
One way to make sure you soothe fears is by having a solution in place to make collaboration a constant no matter what else is going on. For instance, use an investor portal with real-time collaboration tools so a client who logs in to check their balance can message you immediately, without navigating to a different website, text message, or phone call.
Hands-on communication (Without the handshake)
Running a modern business means running a digital business. Preparing for the unexpected should include digital solutions to continue running your advisory firm from anywhere, with minimal disruption.
If your firm hasn’t already invested in a video conferencing solution, like Zoom or GoTo, now is the time to do so. Google Hangouts and/or Facetime also might work for you and your clients. Meeting virtually with your clients gives you the opportunity to be face-to-face without health risk, digitally, and hands-on with their lives, even if you’re miles apart. Granted, some clients will be more comfortable with a video chat than others; but it is a great way for your more calm and patient support people to build rapport while bringing any still-reticent clients into the digital age.
Business communication and messaging apps like Skype, Microsoft Teams or Slack can be used by your internal staff to keep the flow of information steady and continue serving your clients as if you were together in the office.
Keeping costs down during tumultuous times
If your business is overleveraged with expenses, a slowdown caused by events you can’t control can have a catastrophic effect on your profitability and ability to function over the long term. For many advisory firms, technology expenses creep up and spiral out of control. The high cost of the modern technology stack is unsustainable for firms whose revenues rely on the markets performing well.
According to a 2019 study conducted by TD Ameritrade Institutional, the typical RIA firm spends more than 3% of revenue on technology and, as their firm size increases, their tech spend typically goes up. TD Ameritrade found that large, top-performing RIAs scrutinize their technology spending and focus on generating high returns on their investment. Rigorous planning and analysis also contributes to better results. When it comes to technology, the top performers are more likely to adopt tools that increase efficiency and deliver a better client experience, including financial planning software, digital document management systems and online client portals.
“The data reinforce what we’ve long believed to be best practices: well-managed firms are investing in themselves, their people and platforms to build a foundation for a larger, more scalable and successful future,” said Vanessa Oligino, director of business performance solutions at TD Ameritrade Institutional. “Standout performance is the product of sound strategic planning, an intense focus on operations. And, just as important, top-tier firms show they have the discipline to follow through on those plans over time, through thick and thin.”
The key takeaway from the TD study is that keeping a close eye on profitability and choosing technology providers that provide affordable and streamlined, but sophisticated, software makes the difference between a firm that comes out of an economic downturn in a position of strength or one of weakness.
The good news is that there are more and more low-cost or no-cost options to consider when it comes to technology and investment management option (e.g., Oranj), and several fintech companies have recently announced fee waivers or special deals to help advisors navigate through these uncertain times (e.g., Advicent announced that its NaviPlan® Client Portal will be free to all advisors through December 2021 and Snappy Kraken waived set up fees and froze prices for their automated marketing system for financial advisors).
Closing the digital divide
In May 2019, David Lyon, founder and CEO of the wealth management platform Oranj, wrote an article that urged advisors to adopt and promote user-friendly digital interfaces, saying, “The time to trim expenses and think ahead about these very serious threats is now.” This was before the current pandemic and global crisis began to bubble up. Was Lyon prophetic – or simply a realist when it came to keeping a cost-conscience perspective regarding the pressures that financial advisory firms were already feeling over the past few years?
Formerly a financial advisor himself, Lyon understands more accurately than other fintech executives the issues that independent financial advisors are facing. He provided three tips to help advisors navigate this complicated landscape:
- Close the digital divide with your clients;
- Revisit your business processes / client experience; and
- Think “flexibility” when it comes to your tech stack.
If you did not fully adopt his advice provided in that article, revisit those essential elements now. It’s not too late to adjust your sails.
Preparing for the next disruption
Despite the markets swinging wildly and health infection rates rising, we will emerge stronger from the volatility and disruptions we’re experiencing.
Taking your firm online, having employees work from home, meeting with clients digitally and reducing unnecessary costs are all steps advisors can take to help manage the moment and still give clients an uninterrupted relationship with their professional advisory team.
Preparation done ahead – or quickly adopted during a turbulent time – will lead to a faster recovery, but you can only take these steps if you have the systems and technology in place to work in an uninterrupted fashion. This won’t be the last event like this that we experience in our lifetimes. Business volatility and disruptions will always be present.
Those who take the time now to assess their workflows, systems and technology – and ensure that all elements support their client relationships in any and all scenarios – will approach the future with confidence and a position of strength.
To learn more from your peers about how they are coping with this crisis, as well as hear from an array of special guest presenters, Stephen Wershing, CFP®, founder of The Client Driven Practice, and I are setting up virtual mastermind groups to facilitate the sharing of best practices. Details about an upcoming related webinar, as well as other helpful resource, are posted on my Best Practices in the Financial Services Industry blog.
In my next installment, I’ll share what my team at Impact Communications and I are learning and doing as we help our financial services clients communicate in the best ways possible with their clients.
Marie Swift is president and CEO of Impact Communications (www.ImpactCommunications.org), a full-service marketing communications firm that works solely within the financial services industry. Prior to establishing Impact Communications in 1993, she served as director of corporate communications for a group of 20 fee-based top producers in California.
Read more articles by Marie Swift