By MARK J. HANNA
As technology evolves, automated financial advisors, or robo advisors, have become impossible to ignore. They offer consumers quick and convenient service at a low price with automated algorithms that manage investments. While this technology may be appealing, we should not see robo advisors as a competitive threat since they will never be able to replicate the relationship a client can develop with their human financial advisor. Play to your strengths and remind prospects and clients the unique value you provide that they can’t find in an online service.
Our Ability To Connect
As a financial advisor, relationships are at the core of all success. It sounds obvious, but one of the best ways we can differentiate ourselves from robo advisors is by channeling our human experiences and emotions. In fact, a recent MDRT study found that for 65 percent of Americans, the top benefit of working with a human financial advisor over a robo advisor is the opportunity to build a trusting relationship.
Take advantage of your ability to form meaningful relationships and gain trust by connecting with clients on an emotional level that goes beyond money and products. If your client dreams of retiring to ski in the Alps, chat about your own love of skiing and swap stories of past ski trips. If the client is saving up to take their family to Disney, share tips from your last vacation there. The bulk of what we deliver to clients is not technical, it’s emotional. If we work to relate to them as humans, all the algorithms in the world can’t match that type of connection – a connection that often leads to effective personalized financial strategies.
A Tailored Approach
While robo advisors make calculated decisions based on market conditions, human advisors go beyond just plug-and-play numbers. We recognize each client is an individual who needs a tailored approach to their financial goals. Some may look to us to provide their family with protection and security, while others may want financial freedom after a divorce. Our clients’ reasons for coming to us are never the same because finances are deeply tied to who we are and what we value. By getting to really know them and understanding their intentions, we can see the bigger picture and understand the potential impact that financial decisions have on their life goals.
Due to our industry experience, we’re also able to strategically adjust their financial plan when they encounter bumps in the road. If a client has an accident at work, we can sympathize emotionally while helping them navigate claim procedures and the impact of benefit payments on their overall financial well-being. Plus, we know exactly how to tweak their ten year goal to make sure they’re still on track.
One of the best ways to actively differentiate yourself from a robo advisor is by making a point to check in with clients regularly. Ask if they’ve had any major life changes such as a new baby or a new job. Their financial needs and goals are constantly evolving, and we know how to coach them across the finish line. With regular check-ins, you’ll make sure they’re ready to face any unexpected challenges and still accomplish their goals.
Don’t Forget The Benefits Of Technology
While human connection and expertise is the backbone of our industry, it’s important not to abandon tech completely. The same MDRT survey found that 71 percent of Americans believe financial planning should be managed by a mix of people and technology-based tools. In such a digitally-focused era, advisors who combine a traditional, comprehensive approach while using technology to maximize efficiencies have the opportunity to thrive. For example, by using a good CRM, we can easily keep track of our activities, responsibilities and schedules. With digital marketing tools, we can drive prospects to our website.
Adapting to new technology can help us remain competitive in our industry, but human connection will always be the primary driver of client loyalty. Though robo advisors are an exciting and new technology, they can’t compete with the emotional connection and years of professional insight we provide our clients. The best way for a nervous advisor to leverage fintech is to embrace it and its evolution into your practice, allowing you to maximize your human connection. Remember to share your expertise and emphasize the rich benefits you as a human advisor provide, and you’ll win more prospects while retaining a solid client base.
Mark J. Hanna is CEO of Hanna Insurance & Financial Solutions, Inc., an Executive Benefits and Financial Services firm specializing in integrated retirement and compensation solutions for multi-national companies and their executives. A 41-year veteran of the financial services industry, Mark J. Hanna is recognized internationally for his professional and industry accomplishments. Most recently, Hanna served as the 2017 President of the Million Dollar Round Table (MDRT), an organization where membership is determined based on sales production. A 31-year MDRT member, Mark has 20 consecutive Top of the Table honors and served as Chair and Divisional Vice President of Top of the Table in 2007. He is also a Royal Order Excalibur Knight of the MDRT Foundation and a member of its Inner Circle Society. His Round Table service is extensive, with service on multiple committees and task forces, as well as presentations at multiple MDRT Annual Meetings, MDRT Experience Meetings and Top of the Table Annual Meetings.