Empowering Advisors with a Hybrid Approach

Mike Sha

Original article shared on Advisor Perspectives.

There’s no shortage of technology solutions for financial advisors. But financial management remains fragmented and siloed by legacy architecture. While tech adoption proliferates due to the overwhelming availability of options, integrating it successfully is another story – it’s the biggest pain point for 57% of advisors, according to Investment News’ 2022 advisor technology study.

There is growing demand and competition in the financial advice space, along with the need for next-level customer interaction tools. A hybrid model that combines sophisticated digital capabilities with human expertise and advice is not just today’s reality but will be a key differentiator for winning customer relationships. It delivers a better consumer experience by prioritizing the best of both worlds – bringing choice, transparency, and flexibility to financial services.

Investors are evolving; so should the wealth management industry

This year brought at least one positive trend: the universal prioritization of personal finance, most notably investing. The total number of direct brokerage accounts ballooned by 40% according to McKinsey. And a horde of new investors with a median age of 35 – known as “generation investor,” or Gen I – is in the market. Investing has effectively become the new savings. High-net-worth individuals are combining the behaviors of two types of investors: they oversee some self-directed accounts and find value in working with an advisor in-person or remotely to manage their portfolio.

Advisors are well-positioned to succeed if they can cater to the needs and changing investment behaviors of affluent clients and make digital transformation part of their strategy. Half of high-net-worth and affluent clients think their primary wealth manager should improve their digital capabilities – from more personalized offerings and omnichannel access to account consolidation and integrated services. Among respondents to McKinsey’s Affluent and High Net Worth Consumer Insights Survey, 77% preferred to primarily correspond with their advisors through either a digital medium (website or app) or a remote channel (email, phone, video conference).

Technology is the catalyst behind the future of financial services

Financial institutions have a choice: Invest strategically in digital capabilities or succumb to disruption from nimbler competitors creating cutting-edge solutions and potentially losing market share. While most financial institutions have upped their investments in technology, much of the focus has been on the fundamental infrastructure level. Consumers, however, have come to expect user-friendly platforms with robust functionality. When platforms can’t deliver the features people want, they’ll look elsewhere. Additionally, financial institutions have to balance catering to younger generations with strong digital and mobile-first preferences, while older generations are still likely to seek in-person experiences. Hybrid platforms can build upon the robust security customers have come to expect from financial institutions, with a modern, dynamic cloud-based interface that can be used alongside their human advisor for a totally personalized experience.

What adopting smarter tech means

Clients want the benefit of human advice, and advisors want better technology to enhance how they deliver that guidance. Putting better tech in the hands of advisors means having more time to spend with clients and less time doing manual work.

By consolidating financial services through integrated technology, people gain a comprehensive, big-picture view of their finances, rather than navigating disjointed, multi-platform accounts. Simply put, managing finances is easier – and more effective – when everything is laid out in one central place.

Whether setting up a bank account or assessing the big picture of an individual's financial goals, advisors are better equipped with holistic technological solutions that expand their capabilities, unlock more control, and improve the ability to make informed decisions.

It’s not a digital divide; it’s a bridge

Technology isn’t replacing humans in financial management – it’s enhancing the investment experience. When done right, a screen becomes a forum for collaboration and the launchpad for better decision making. It can help strengthen the connections between advisors and their clients – creating new opportunities for interaction and partnership. Rather than staring at static content, the robust functionality and intuitive interfaces of hybrid models is changing the way financial advice is delivered by creating superior, shared experiences with better infrastructure behind the scenes – well beyond Zoom or video chats of the past.

Audio and video capabilities are elevated for a finance-specific conversation, bringing people and information together in a more cohesive, productive way. Remote meetings can and should feel personal. From building customized agendas to sharing insights and recommendations, the needs-based content flow of hybrid models leads to best-fit solutions.

When it comes to navigating personal finance, tech isn’t there to take over. It exists to make human relationships stronger. We won’t see tech-driven solutions like robo-advisory replace financial advisors. It’s not a zero-sum game. It’s a complementary relationship.

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