The Goldilocks Zone

Have we prioritised scaling over smiling? Louis van der Merwe CFP®, Director, WealthUp argues that the use of technology must reach the Goldilocks Zone: not so efficient that it costs the client experience dearly and not so inefficient that the business cannot grow. Just the right balance...

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You either fall into the camp that grew up with and who love technology (aka digital natives) or you fall into the camp where you feel that the pain of mastering a new tool most likely outweighs the potential benefit. The love-it or love-to-hate-it camp.

It is completely normal to feel frustrated by technology. In a recent report on business efficiency by PortfolioMetrix, technology frustrations ranked in the top four concerns for financial planners. It is fascinating that the same tools can be loved by some and hated by others. How much time do we really give to understanding why we are implementing something in our financial planning business?

Technology has been used as the go-to answer for any business roadblock, expecting that we can provide our team or clients with a new tool and that will solve almost any problem. I count myself among this group as a lover of technology, automated processes and efficiency. The question of “can’t we just have one tool that does everything” screams the need for efficiency. This efficiency almost always comes at the cost of client experience.

In a report by Matthew Jackson, titled New Frontiers in Wealth Management, he unpacks the concept of using technology to create a better client experience as opposed to creating additional efficiency. It is not difficult to find a practice management consultant that speaks about the service constraints that financial planners experience resulting in a limited client base and a limited revenue stream.

What if we considered technology as a key ingredient to improve client experience, potentially at the cost of efficiency? Shifting the focus from scalability to remarkability. Creating a remarkable experience, something Seth Godin would call the “Purple Cow”. If your experience with your financial planners is so remarkable, this becomes an opportunity to share the experience with friends and colleagues and can become a powerful marketing engine. A term coined as “surprise and delight”; looking for any opportunity to bring a smile to the face of your client.

What if we considered technology as a key ingredient to improve client experience, potentially at the cost of efficiency?

A successful financial advisor from Johannesburg recently shared a powerful story with me. They employ a full-time driver to be able to transport clients to and from the airport when they travel, hospital when they are sick and even to their office to attend meetings. What struck me was not the fact that they are doing this but by the strength of the personal bond that clients have formed with their driver. He is a critical piece of their experience team, and this is one experience that a ride-sharing app will not be replacing soon.

Rethinking the role of support staff, who would typically deal with administration and “back-office” work, as an element of your experience team, showing the client what happens behind the scenes. What we have found is that clients are often surprised by how much work and effort it takes to get and keep their finances on track. Like seeing the head chef and his team at work in a Michelin star restaurant.

We are not in the job of manufacturing financial plans; we are in the job of helping people adapt to change. One question we often ask our clients is, “Who else can help you with this change?” The main purpose behind this is to create a structure of support and external accountability to help the client stay on track. This is a brilliant place for technology to create automated check-ins through push notifications on a client’s cellphone, automated emails or even just a quick text message to let them know that we are here to support them in their journey. It might not be the most efficient use of resources, but it creates a more valuable experience.

Louis van der Merwe CFP®, Director, WealthUp

The rise of low-code platforms like Podio, Notion and PowerApps means that almost anyone with a laptop and an Internet connection can build a technology solution that fits their client experience. This all without the need to hire a software developer. There will still be the need to integrate with more specialist tools when it comes to the heavy lifting of financial planning scenarios and portfolio analysis. These tools are well-suited to improve the core tasks of client onboarding and reviews.

My take is that the use of technology must reach the Goldilocks Zone: not so efficient that it costs the client experience dearly and not so inefficient that the business cannot grow. Just the right balance to turn your client into a raving fan with a massive smile on their face.