Where to tech, and when to human

Technology is transforming the financial advice industry and the financial planning profession. From robo-advisors and Artificial Intelligence (AI) to digital platforms and cloud-based solutions, technology offers new opportunities and challenges for financial advisors, financial planners and financial advisory business owners, from small independent businesses to corporates. Technology can help financial advisors and planners deliver more efficient, personalised and holistic advice to clients. It can also help them streamline their processes, reduce costs and comply with regulatory requirements. Technology can also help financial advisors and planners reach new markets, expand their services and differentiate themselves from competitors.

However, technology is not a substitute for human interaction and relationship-building. Technology can complement, but not replace, the human element of financial advice. Financial advisors and planners need to balance the use of technology with the need to connect with their clients on an emotional and behavioural level. They need to know where to tech, and when to human.

Where to tech

Technology can enhance the value of financial advice in several ways. Here are some ideas of where to tech:

Technology can complement, but not replace, the human element of financial advice.

• Gather and analyse data from various sources, such as bank accounts, investment portfolios, tax returns and social media. This can help create a comprehensive and accurate picture of a client’s financial situation, goals, preferences and risk tolerance.
• Create and present customised and interactive financial plans for clients. Use tools such as cash-flow modelling, goals-based planning, scenario planning and visualisation to illustrate the impact of different strategies and options on a client’s life and financial outcomes.
• Monitor and review clients’ progress and performance. Tools such as dashboards, alerts and feedback mechanisms help advisors and planners track clients’ financial behaviour, provide timely and relevant advice, and adjust plans as needed.
• Communicate and collaborate with clients and other stakeholders. Use tools such as video conferencing, chatbots, client portals and digital signatures to provide convenient and secure access to their services and to enhance client engagement and satisfaction.

Tech is great for boring, repetitive and time-consuming tasks and processes.

When to human

Technology can improve the quality and efficiency of financial advice, but it cannot replace the human touch. Human interaction is essential for building trust, rapport and loyalty with clients. It is also crucial for understanding and influencing their financial behaviour and decision-making. Here are some touchpoints and when to human:

• Understand clients’ personal and emotional needs, values and motivations. Ask open-ended and probing questions, listen actively and empathetically and show genuine interest and care.
• Educate and empower clients to make informed and confident financial decisions. Explain complex and technical concepts in simple and relatable terms, provide clear and unbiased guidance and address clients’ doubts and concerns.
• Motivate and influence clients to act and follow your advice. Appeal to clients’ emotions and aspirations, provide positive reinforcement and encouragement and help them overcome their fears and biases.
• Deal with sensitive and challenging situations, such as market volatility, life transitions or financial crises. Provide emotional support and reassurance, show empathy and compassion and help clients cope and adapt.

Humans are great for creating safe spaces and accountability, two important aspects for changing and managing behaviour.

Technology and human interaction

Technology and human interaction are not mutually exclusive, but complementary. Financial advisors and planners must leverage the best of both worlds to deliver optimal value to their clients. They need to adopt a hybrid approach that combines technology and human interaction in a way that suits their clients’ needs, preferences and expectations. Here are some tips on how to balance technology and human interaction for financial advice:

• Assess clients’ level of digital literacy, comfort and trust. Tailor the use of technology to clients’ capabilities and preferences and provide them with adequate training and support.
• Segment clients based on their needs, goals and complexity. Allocate time and resources accordingly, use technology to automate and standardise the routine and low-value tasks and focus on the high-value and high-touch tasks.
• Integrate technology and human interaction throughout the financial advice process. Use technology to enhance data collection, analysis and presentation, and use human interaction to enhance client understanding, education and influence.
• Evaluate and measure the impact of technology and human interaction on client outcomes and satisfaction. Collect and analyse feedback from clients and other stakeholders and use it to improve service delivery and the value proposition.

In conclusion

It is easy to ignore an app, but it isn’t easy to ignore a human. Then again, tech can do what humans can’t. Technology is a tool that helps us do what we could not do otherwise so we can have the time to do the things technology can’t and that truly matters.

Stay curious!