Blog | 4 Min Read

How To Optimize Digital Advice In A Digital World

In the blink of an eye, everything went digital. The coronavirus spurred a necessity for digital tools that many advisors weren’t prepared for. This shift clearly illustrated the technology gap that exists in the financial planning industry. 

Advisors scrambled to adopt virtual tools to help keep their business running and their clients happy. While the digital revolution may have felt sudden, it’s been building for a long time. 

To keep up with changing client needs, advisors must adapt to this new digital landscape. Our team is here to show you this transition doesn’t have to be difficult. Today, we are going to look at a few proven ways advisors can leverage technology to scale their business and grow their practice. 

Advice is Going Digital, So You Should Too

Leveraging technology may sound unapproachable at first, but don’t let that be a turn-off even if you pride yourself on delivering personalized, one-on-one customer service and client interaction. 

You’re likely known as the advisor who meets clients in person, takes great care to establish individual financial plans, and who picks up the phone to recommend a fortuitous buy or sell opportunity. You aren’t keen on these newfangled “Robo-advisors” who automate investment planning by relying on computer algorithms to build client portfolios. To you, they pose a threat to your business. 

Your traditional approach has served you well, but to stay competitive, you’ll want to give technology a chance. Not only will digital tools save you time and energy, but increasingly, your clients will demand them, especially the younger, more tech-savvy kind. Today’s financial advisors will find many options to integrate technology into their practice and teach their clients how to use them.

They can be very simple such as basic email tools or budgeting apps like YNAB or Mint. Others are designed to offer powerful data-gathering functions or sophisticated customer relationship management (CRM). Software like DataPoints is handy to assess your customers’ attitudes toward money and risk. Many advisors and their clients alike value online financial planning tools to check portfolio performance, upload documents, and view recommendations all in the same portal.

Once you start adding such tools to your practice, you will increase your effectiveness without sacrificing personalized advice. Remember, technology and financial planning aren’t mutually exclusive. When done right, technology can enhance your business and help you thrive for years to come. 

Understanding the Red v. Blue Ocean Strategy

Red or blue?

We aren’t asking a political question, rather, which investment strategy you practice. Not sure which is which? Read on.

The Blue Ocean Strategy is a marketing strategy based on the eponymous book first published in 2004 by business professors W. Chan Kim and Renée Mauborgne of INSEAD, the renowned international graduate business school. The authors propose that companies leave the shark-infested blood-red waters of ruthless competition by pursuing a strategy of high-quality product differentiation and low cost that will place them in the open, calm blue seas of uncontested markets. This strategy aims not to beat the competition but to make competition irrelevant.

A classic example of a blue-ocean strategy is Apple’s launch of iTunes, which upended the traditional distribution of music. Rather than competing for existing customers in a highly saturated red ocean of DVDs, the company created its own new, highly profitable blue ocean of digital music, movies, TV shows, and more.

The strategy can be applied across all industries. The key is the mindset to create a new service and a new demand, allowing innovative business owners greater control of the services they offer and their price points.

How can you, as a financial planner and wealth advisor, differentiate yourself and your target market and thus make your competition irrelevant?

Consider integrating digital tools to identify a new target audience, automate low-value tasks, or create new, unique services—all developments that will set you apart from competitors.

How Can Advisors Scale?

You will achieve a hybrid practice of custom-tailored, personalized advice, and technology elements that turn your clients into active participants of the investment planning process.  

Most likely, you’ll discover that many of your customers embrace these new tools as a means to enhance their financial knowledge and exercise greater control over their money through various life stages.

How does that benefit you? By offering technology, you are elevating your service and creating additional touchpoints without having to spend more of your time or expertise.

Here is an example from our own company. Our signature product, College Money Report™ available to financial planners nationwide, offers customized, interactive DIY reports to guide families on how to pay for college. 

Not only has this software proven to be an invaluable resource for families as they compare net costs, grants, scholarships, and out-of-pocket expenses, but it enables the financial planner to recruit two generations of clients in one strike: the parents as well as the student as they mature through college, obtain their first job, start investment considerations, as well as budgeting for a car, a wedding, and a family, plus retirement planning. The list goes on and on.

A novel tech product like the College Money Report™ could be part of your blue-ocean strategy to grow and differentiate your practice.

Do you have a blue-ocean-strategy mindset?

Personal advice offers tremendous value. However, as the field of financial planning is becoming more competitive, you already know that it should not be the only way to create a true connection and trust with your clients. Something has to change if you want to want to continue to thrive. Leveraging technology will empower you to offer unique, targeted services in the future.

Are you ready for blue ocean waters? Try our demo and see for yourself.