I attended SIFMA’s Annual Meeting this week with a group of my Hearsay colleagues. Topics ranged from key industry challenges like cyber security, technology enablement to drive productivity, and driving diversity in the workforce, to the balance between regulation for protection of investors and the potential impact it has on stifling economic growth.
In addition to an impressive lineup of keynote speakers, there were a series of panels with participants from Bloomberg TV, JP Morgan, Vanguard, Charles Schwab, Wells Fargo and many other industry leaders.
Hearsay’s founder and CEO, Clara Shih, participated on a panel titled, “Embracing the New Frontier in Private Wealth Management.” The panel also included leaders and industry veterans from Charles Schwab, McDonald Partners LLC, Hilliard Lyons and Wells Fargo.
The panel discussed everything from the evolution of an advisor’s role with their clients and technology as a productivity driver, to people and organizational challenges that include an aging advisor workforce, hiring and talent retention, and the importance of more diversity in the industry.
The Evolution of The Advisor
The role of the advisor has evolved from financial service specialists and sales people to more of a life coach. Advisors work with clients to understand their needs, goals and retirement objectives, in addition to helping them move through major life milestones. Clients expect personalized services, yet want to communicate where/when it’s convenient. That’s where technology can help advisors engage with their clients where, when and through which channel they prefer – social networks, email, texting, phone calls or face-to-face meetings.
Only 40 percent of advisors consider themselves “tech savvy,” yet those who do leverage technology tend to have larger books of business and perform better than their non-tech savvy peers. This is why many of the firms on the panel invest in tools to help advisors more effectively market to and engage with their clients and prospects.
Lisa Kidd Hunt from Charles Schwab’s team has invested heavily in these tools, including Hearsay, and teams that curate content relevant to financial services and other relevant subjects. This allows advisors to share interesting (and compliant) content with their client network – and measure and track engagement.
Brand Meyer, senior managing director at Wells Fargo Advisors mentioned they don’t want their advisors to be “techno-nerds,” but want to give them tools to drive productivity. This allows advisors to focus their time and energy on providing the expertise clients are looking for.
Advisors need to live in a high-tech, high-touch world. They need to be able to move conversations between channels to offer the experience customers are looking for. Advisors need to become data driven knowing who, how and when to reach out to their clients. And firms need to be able to track and monitor fiduciary responsibilities and understand their clients better.
Changing Industry Demographics
The baby boomers are all retiring. There will be a massive transfer of wealth over the next 10 to 20 years. That wealth will go to generations that grew up in the midst of the digital age, whose expectations are driven by their experiences with Facebook, Amazon and Uber. Meanwhile, the industry is faced with an aging advisor workforce. For every one student who graduates from a CFP program, two advisors reach Social-Security eligibility. Most firms have an average age of advisors over 50. Naturally, firms are working hard to attract and retain younger talent for transition and succession planning. They are also building a more diverse advisor population to serve the needs of a much more diverse client population.
They are using strategies like teaming experienced advisors with younger talent. They are working with university finance programs to train the next generation of financial advisors, and they are looking for talent in other jobs to make the switch to financial services. They are also investing in technology to help enable the next generation of digital savvy advisors who will interact with an increasingly larger part of the working and investing population of digital natives.