Empower Financial Advisor-Investor Relationships with Data Intelligence

Robo-advisors are taking the financial management industry by storm. Agile, powerful, and fast, these computerized financial advisor systems are projected to grow into a $7 trillion industry in the next decade, according to research from Deloitte.1 That’s 15% of all U.S. retail assets under management.

Big names in banking are lining up to join the robo trend. Wells Fargo President and Chief Operating Officer Tim Sloan says that customers are demanding to manage their assets on their own time, and robos are a response to that.” 1

If this is a profitable way to gain traction with younger investors, as banks report, where does that leave individual wealth managers and financial advisors? How can flesh and blood wealth advisors compete with a computerized robo wealth management algorithm?

Combining human advice with robo-advice

First of all, savvy wealth advisors should heed the robo trend but not let it keep them up at night. After all, advisors have something robos don’t: emotional intelligence. Sometimes investors need human interaction and validation instead of robotized advice to feel confident and secure in their financial choices. Human advisors offer all this and more.

Second, research shows science-based advice is not likely to fully displace human-based advice.2 Rather, a more likely scenario would include a combination of the two, where human interactions are strengthened by robo analytics.

Research from Deloitte indicates that the balance between science advice and human advice will depend on investors’ ability to pay for advice, the complexity or their financial needs, their self-confidence, their financial background, and other factors.2 Also, investors tend to seek out personal advice for complex financial needs, like estate planning, and tax preparation.

“Overall, I think most Americans, particularly wealthy ones, will still want at least some level of human validation before making complex financial planning decisions,” says Grant Easterbrook, a fintech startup analyst at Corporate Insight.3

Instead of fearing the robo invasion, financial advisors can combine their emotional intelligence with data intelligence to gain an edge over their robo counterparts. Rather than supplanting relationships, banks can use digital capabilities to supplement them.

Bringing digital touch points to advisors

Empowering investors to holistically view their finances and see the implications of their behavior from one sphere to another and offering robo guidance is one thing. But providing the same holistic view to the investor’s financial advisor extends the power of intelligence to the nth degree.

When advisors have a customer’s complete financial picture at their fingertips, they can understand underlying causes and are free to be real with their clients, and provide real value.

Envestnet | Yodlee makes it simple for banks to forge meaningful connections to customers by combining digital touch points with human contact. With a powerful data aggregation engine, Envestnet | Yodlee provides a holistic view of client financial data that enables advisors to understand the subtle nuances of their client’s situation. By intimately knowing their customers and plainly seeing their situations, advisors can offer simple and pointed solutions that make sense and can really help clients reach their goals. The conversation becomes more creative and potentially lucrative for both client and financial professional alike.

Digital solutions for a human connection

Human advisers will always have an edge in emotional intelligence, with the ability to make clients feel validated and more secure in their financial choices. Envestnet | Yodlee enables advisors to see their client’s complete financial picture and gain a clearer understanding of their situation, and provide true value by tailoring their advice and guidance accordingly. It enables advisors to take the best of what robos have to offer, and add their own human touch.

Want strategies and tools to build on the robo trend and build lasting and profitable advisor-investor relationships?  Contact Envestnet | Yodlee today.

1   Broughton, Kristin. "Once Fearful of Robos, Banks Now Court Digital Advice Startups." Financial Planning. July 20, 2016. Accessed September 07, 2016. http://www.financial-planning.com/news/once-fearful-of-robos-banks-now-court-digital-advice-alliances

2   Deloitte report: 10 Disruptive Trends in Wealth Management. 2015

3   Davenport, Thomas H. "International Institute for Analytics." Are You Ready for Robo-Advice? -. March 24, 2015. Accessed September 07, 2016.http://iianalytics.com/research/are-you-ready-for-robo-advice