It’s clear that technology has changed the way investors and advisors interact. From digital banking tools to cryptocurrency to a pandemic that forever changed advisor relationships, there is a lot to consider in 2022 when it comes to examining wealth management through the lens of technology.
Indeed, most advisors, like investors, are proponents of technology. One study found that 83% of advisors say better technology tools have the potential to greatly improve new client acquisition, an increasing challenge among growing competition.
Unfortunately, many firms still haven’t caught up. About a third of wealth management firms are still classified as “beginners” in digital transformation. When it comes to digital maturity, the financial services industry clearly has some catching up to do.
To help advisors better understand the landscape, a new report from Envestnet breaks down how tech has changed the way investors view money, why the human element in advising still matters, and how an integrated approach is the way to move forward.
How Has Technology Changed the Way Investors View Money?
The data is clear: investors are “firmly entrenched” in accessing money through technology. Whereas technology used to be viewed as a separate entity from financial well-being, today, it’s a critical component of how investors see the world of finances.
For example, almost 60% of Americans believe financial applications are important to successfully achieve their financial goals. Without technology, achieving financial freedom becomes more nebulous in an investor’s eyes.
Strikingly, investors who use advisors are much more likely to use financial apps than investors who don’t. Investors are also more likely to use financial apps than non-investors.
- Americans with a financial planner are 12% more likely to use financial apps than those without an advisor.
- Americans who invest are 8% more likely to use financial apps than those who don’t invest.
In other words? The fact that your clients are working with you indicates that they are high adopters of technology when it comes to finances.
How Much Does the Human Element Matter?
Despite the proclivity of investors to be technology literate, that doesn’t mean they don’t want an advisor at all. Indeed, Envestnet’s research indicates that investors are more confused than ever about navigating the financial landscape. They still want a human element when it comes to investing.
Here’s the conundrum: A majority (58%) of Americans want a human financial advisor over digital options. However, nearly the same amount (54%) also wish there was technology that could simply handle their personal finances for them.
So which is it? The answer is a little bit of both. While self-service technology will most likely improve over the next decade, the current uncertainty in the markets means more people are likely to turn to advisors for reliable information.
Indeed, across every generation in Envestnet’s study, engaging with a financial advisor directly still held value and relevance. A reason why might be that having an investor builds confidence.
- 76% of Americans with a financial advisor feel confident about achieving their financial goals.
- Only 41% of Americans without an advisor feel confident about achieving their financial goals.
How Docupace Blends the Best of Advisor Advice & Technology
As we’ve explored above, there’s little doubt that technology and in-person advisory services are the future of wealth management. Technology provides more actionable insights to advisors, increases visibility with clients, and fosters more connectedness between every step of the process.
At Docupace, our platform combines emerging technology with industry best practices to provide the best experience possible to clients and advisors regarding document management. It’s easy to use, frees up time for advisors to focus on the customer side of the business, and enhances the client experience when it comes to tedious paperwork.
Docupace can help your company adopt digital best practices that your clients expect and your advisors love. Contact us here to learn more.
David Knoch is CEO of Docupace a solutions provider focused on digitizing and automating operations in the financial advice and investment industry. David currently serves as the Immediate Past Chair of the Financial Services Institute (FSI) Board of Directors and has been voted one of the 25 most influential people in the Investment Advisory industry two years in a row – 2018 and 2019.
