Robo-advisors like Wealthfront and Betterment may be fighting to automate financial advice, but most people still seem to be interested in a hybrid approach, according to a Wells Fargo (WFC) and Gallup survey conducted in June 2015.

The study found that roughly 40% of investors preferred a blended approach to financial advice, while less than 10% preferred a fully-automated solution involving no human interaction at all. While robo-advisors have captured about $14 billion of all assets under management, according to MyPrivateBanking Research, traditional financial advisors still control the vast majority of the $5 trillion market. (For related reading, see: Robo-Advisors and a Human Touch: Better Together?)

Advisors may still have an upper hand, but technology is playing an increasingly important role in remaining competitive. In a world where people have instant access to their bank accounts, brokerage accounts, and personal finances, clients are increasingly seeking ways to monitor what’s happening online and interacting with advisors only when they need clarifications or need to make major changes.

Here we’ll take a look at some solutions that aim to augment financial advisors' services to improve the value proposition for their clients.

Managing Cash Flow

Guide Financial—a startup recently acquired by John Hancock—enables financial advisors to provide comprehensive guidance through an accessible online interface. Using artificial intelligence algorithms, the company’s Financial Planning Engine analyzes transaction and account data in real-time to suggest ways to improve cash flows, optimize deferral rates, and make behavioral changes to build retirement assets.

Clients are provided with online access to a comprehensive dashboard designed to help accomplish these tasks, with a built-in messaging system that enables them to communicate more easily with their advisor. Features like the Action Plan helps keep clients on track in terms of completing tasks like filling out paperwork, setting up meetings, and determining optimal investment rates in order to achieve their desired outcomes. (For related reading, see: Which Robo-Advisor Is Best for Financial Advisors?)

By implementing a client-side service like Guide Financial, financial advisors can differentiate themselves within an increasingly crowded industry and maintain a high level of contact with clients, thereby reducing the odds they’ll feel neglected and leave. The technology also improves the overall level of service and enables clients to feel more in-control of their finances, while leaving an advisor in charge of assisting in the decision-making.

Analyzing Risk Tolerance

Riskalyze is designed to help financial advisors beat the expectations game by calculating client risk scores that can then be used to adjust asset allocations within a probability range. At its core, the technology is built upon an academic framework that won the Nobel Prize for Economics in 2002. Customers have already used the technology to build more than $2 billion in portfolios in 2012, a number that has expanded dramatically ever since.

The company also helps with a variety of different marketing-focused capabilities, ranging from lead generation to automated proposals. With its risk assessment tool, financial advisors can transform their existing website into a lead generation machine that empowers prospects to hand over all the information needed to close them as new clients quickly and easily. The technology can also be used to impress existing clients with a new way to measure risk.

By using Riskalyze, financial advisors can improve their conversion rates when it comes to marketing to potential clients. The process of creating a risk assessment collects a large number of data points that can be used to make a far more effective pitch than going into a meeting blind. In addition, the technology can help improve the experience of existing clients by helping them feel more comfortable with their risk tolerance levels. (For more, see: Is a Google Robo-Advisor on the Horizon?)

Client Communication

Redtail CRM is a web-based management solution designed specifically for financial professionals. Since it integrates with Riskalyze and other advisor services, the platform enables financial advisors to easily generate reports, provide inroads for relevant client “touches,” categorize clients for marketing campaigns, automate workflows with reminders, and many other things to make life easier.

The company’s technology is widely employed throughout the financial advisory industry to help manage workflow and communication. The platform serves as an intermediary of sorts between other solutions, while calendar and to-do functionalities help keep daily operations running smoothly. The multi-user solution can also help delegate tasks between advisors operating out of a larger company or office.

The Bottom Line

Clients significantly prefer to work with financial advisors that employ technology in order to achieve a higher level of service. Financial advisors should use technology to meet the demands of these clients, while competing effectively with so-called robo-advisors. There are many start-ups and established software providers within the financial advisory space that are worthy of consideration; Riskalyze, Guide Financial, and Redtail CRM are three that can improve a financial advisor practice. (For related reading, see: How Robo-Advisors Benefit Both Investors, Advisors.)

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