The Evolving Role of Financial Advisors in a Technological Age


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Technology has had a drastic impact on wealth management.

Any time automation creeps into an industry, people who work in that industry wonder whether that automation will render them obsolete. While financial services are far different from something like an assembly line, change is inevitable. Many clients wonder why they need an actual FA, when algorithms and apps can provide the same services for less money.

Very few industries are unaffected by technology. Those who embrace technology instead of fighting against it are poised to win the fight by getting the best of both worlds. In much the same way tech can help investors, it can also help advisors. FAs who embrace things like social media and CRM software can make technology work for them, not against.

The role of a financial advisor is evolving more and more into that of a guide. Money can be an incredibly nerve-racking subject, and one of the most valuable services an FA can provide is a social one. They can provide support by examining different events in the stock market—making sense of temporary losses and helping to celebrate gains.

Money can make people emotional. When an investor sees their savings drop because of market conditions, they often lack the stoicism to make the right decision. Instead, they may react rashly. They sell off stock because it takes a hit, or they switch products because of current events. While people are emotional, markets are not. Markets dip, correct, and go up. When the day is done, long-term investing is proven to result in profit.

Financial advisors are around to help weather storms of volatility. An app will not be able to talk sense into an investor bent on divesting, but advisors can (and do). A relationship with an FA is a collaboration that spans decades, and that is the primary selling point—a relationship. Communication is going to become increasingly important as technology advances, because your very humanity is your biggest asset as an FA. Providing a great experience is just as important as building a great portfolio. The future is in not just returns, but also relationships.

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