It was 1984 when I got my first ATM card. A couple years later I started using billpay with my Prodigy account. By 1990 I was trading online with Schwab’s software on my Mac SE. By the early 90s I was using Quicken to track my portfolio’s performance and budget.
Fast forward 30 years and think about the impact technology has made, even in recent years. Bank branches and ATMs are largely irrelevant with tools like mobile deposits, PayPal, Apple Pay and Venmo. Emerging loan companies such as Rocket Mortgage and SOFI are rewriting the rules of lending. Robo-advisors like Wealthfront and Betterment automatically design, implement, manage portfolios and open accounts — without human involvement. And this is just the beginning: Artificial intelligence, virtual reality, and big data promise to bring new insights on investor preferences, risk tolerance and financial behaviors. And this change is accelerating….
Even with all this innovation, our industry is still relatively slow to embrace digital technology — we’re just getting started. A recent report from the consulting firm McKinsey1 shows how financial services compares to other industries. It states:

  • Average digital penetration across all industries is 37% where consumer packaged goods and automotive & assembly are lower than average
  • At the top of the scale, the Media & Entertainment (at 62%) industry has been significantly digitized in recent years (think of Netflix, AppleTV, eBooks, iTunes). Also, we’ve seen Retail (55%) digitize significantly through the likes of Amazon and other eTailers
  • Financial services is still around 39%

What does further digitization portend? According to McKinsey, “…by reducing economic friction, digitization enables competition that pressures revenue and profit growth. Current levels of digitization have already taken out, on average, up to six points of annual revenue and 4.5 points of growth in earnings before interest and taxes (EBIT). And there’s more pressure ahead, our research suggests, as digital penetration deepens.”
For certain tech-savvy advisors — or “eAdvisors” as Fidelity defines them — technology can be a key point of differentiation and strength stemming the commoditization and pricing pressures. In a recent Fidelity study, they found that eAdvisors2:

  1. Had almost 40% more AUM than their peers
  2. Attracted more GenX/Y investors
  3. Had a higher percentage of millionaire clients
  4. Serve 55% more clients
  5. Expanded their geographical reach

What defines this advisor type? According to Fidelity, eAdvisors..

  1. Have 2x the number of technology activities including using tablets or interactive presentations during meetings (e.g. MoneyGuide Pro’s What If Scenarios)
  2. Offer a collaborative client portal along with data aggregation to provide a complete picture (e.g. MyAdvisor Center)
  3. Provide automated email alerts (e.g. Rebalancing notifications)
  4. Automate workflows and track interactions within their CRM (e.g. Loring Ward’s Design| Build|Protect workflows in Redtail CRM)
  5. Use online risk and compliance tools (e.g. Investment Planning Center’s Risk Tolerance Questionnaire and PDF archives)

If you’re leveraging a business partner like Loring Ward, you’re already ahead of most advisors from a technology standpoint. And through our partnerships with firms like Envestnet, MoneyGuide Pro, Redtail CRM, as well as the custodians, you’ve got a powerful foundation from which to tailor your digital offering. What’s most important is ensuring that you’re truly leveraging what’s in place — not adding more tools and creating complexity. You should focus on building competency with these existing tools and ensure you’re integrating the tools to deliver a better wealth experience.
To help you assess where you stand on the technology front, download our Technology Ecosystem Diagnostic. Once you’ve assessed your platform, contact your Regional Director or email us at to review how you can help improve your client’s experience.
By aligning your technology and marketing strategy, you’ll be better positioned to take advantage of the opportunities ahead — and not be the equivalent of an ATM in 2017.

1“The Case for digital reinvention,” Jacques Bughin, Laura LaBerge, and Anette Mellbye, McKinsey Quarterly, February 2017
2“eAdvisors Take the Lead,” Fidelity Insights on Advice, 2014