Automate Your Workflow The easiest place to start this process is by automating the ‘less-sexy’ operational parts of the business. From data entry on the frontend to reporting on the backend, many CRM, account aggregation, performance accounting and rebalancing tools can automate the tedious processes. This may sound like an incredibly onerous task, but taking the time to explore these solutions to find the ones that work best for you is a good starting point of automating and scaling your business. In fact, Totum is doing our own homework, evaluating other technology vendors in the space to see how to connect the various tools for the best end-to-end full-stack solution. Think of these automations as “bionic extensions” that increases your efficiencies, and leverage technology for what it can do better and faster than a human, so that you can focus your service on what robo-advisors can’t do as well: client engagement. Engage Clients Better How to better engage clients in a digital age was a key theme at the conference. Your unique human touch – whether it is a thorough financial plan, coaching clients on adhoc money matters, or just being there for the client – will always be the bedrock of a successful advisory business. This is what earned your clients’ trust in the first place and will prove essential during times of hardship or increased volatility. Besides account aggregation, more detailed discovery and updates on risks and goals can also enhance client engagement and retention. Interesting tools tailored to specific functions include: portfolio stress testing by Hidden Levers; quantifying perceived pain tolerance by Riskalyze and FinaMetrica; and ‘goal-based planning’ by a number of providers. These tools use analytics to target potential issues like engagement, trust, and reassurance during tough market periods, which we think are essential and we are dedicated to re-shaping. In fact, we see quality, bespoke, human-centric financial planning as the key differentiating factor in the battle for the future of the RIA business. The question then becomes, whether simply digitizing traditional risk questionnaires can get to the heart of what makes a client unique, and whether the same type of models and assumptions upon which robo-advisors are built can give human RIAs the upper hand. One Size Does Not Fit All While the DOL legislation and what fiduciary requirements will mean was ubiquitously discussed at T3, one more area to consider in this context is FINRA’s investigation of investment suitability of robo advisors and potential changes in regulation. A growing perception is that the simplified one-size fits all questionnaires by robo-advisors may not be sufficient at truly understanding the client and delivering suitable investment advice. This can be become a key shift in the landscape of RIA vs. robo. While robo-advisors ask about risk tolerance, basic financial information, and some even try to define boilerplate goals, none really address the risks that are unique to each household. Savvy RIAs should exploit this growing perception during the current bout of market volatility to showcase the more human and thoughtful approach to client discovery and advice. Demonstrating a clear understanding of and appreciation for a client’s comprehensive Human Capital Risk Context, such as retirement horizon, geography, job sector, career growth, health, family, leverage, liquidity, savings rate, among many other factors, and proposing specific and tangible solutions that address these risks, is how the hybrid advisor of tomorrow can rise above competitors and robos.  ]]>

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