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What Does “Relationship” Mean in This New Age of Virtual Interactions?



Written by: Jeffrey Fleischman | Penn Mutual

There’s been a lot of talk about robo advisors and whether they present a challenge to financial advisors. It’s clear to me that in-person financial advisors can offer significant value above what can be done with a robo advisor, but I look at my own teenaged son and it makes me think. My son would rather text than talk to someone on a phone. He’s had a cell phone for years but he’s never even set up his voice mail. That’s because younger generations thrive on virtual interactions. So, how will these expectations affect a relationship-driven industry like financial services?

My take on robo advisors is that they can do some things really well, but they’re not a one-size fits all solution.

If someone is looking for a simple term insurance policy or a target-date fund, answer a few questions and the robo advisor can certainly provide a solution. But, for comprehensive financial solutions, I think they miss the subtleties. Let’s say there are a range of options that someone might consider to address a given financial situation, and the quick Q&A with a robo advisor might suggest one option that one the surface looks good. However, if the robo advisor does not ask the pertinent questions than key information to make a recommendation is missing – and the solution will not address the underlying need of the client.

Having a conversation with a financial advisor, one who comes to understand every aspect of the client’s situation and their underlying life goals and values, is important to shaping the right financial plan. It would be similar to going into a car dealership and asking simply for a car – without any other information a sales person may bring you a two seat sports car when in fact you need a sedan.

As marketers, how do we bring these two worlds together and have them co-exist? We shouldn’t hide our head in the sand and pretend that robo advisors don’t exist. Instead, we should look for ways to add value on top of what the interactive tools can provide, and that is what Penn Mutual can do. Interactive tools can provide incredible insight but having a conversation with someone to understand what you really need or learn about options you would not have known about, is indispensable. Financial products are complicated and can be intimidating, but an expert can help to clarify their nuances and what best fits your goals.

We’re operating in a bipolar environment, where you have two very different ways of interacting with the world and each has its own unique value. There are those who thrive on personal contact and want in-person meetings and frequent phone calls “to touch base.” Then there are others, mostly younger and raised on technology, who feel more comfortable interacting through apps, social media, and websites.

That doesn’t mean relationships go away.

People still need a trusted advisor, but the way they want to interact is different. Advisors will be struggling with this question: What does “relationship” mean in this age of new virtual interactions, and how does an advisor answer the needs of clients?

Content is becoming the connective tissue of the advisor-client relationship. An important aspect about content is its ability to educate and inform. It’s not about selling. It’s about providing people with a perspective, giving them information they find valuable and presenting ideas to think about. If an advisor is consistently offering well-targeted and consultative content, the advisor will be top of mind when it comes time to act. Who are they going to call? Chances are the person who’s providing the content.

Content can provide valuable insight into the needs and interests of your clients. Many tools will show what content gets read and shared, and by whom. If you look at what people are reading based on the content you share, you might discover that many of your clients are thinking, for example, of funding college education for grandchildren. Think about the specialized needs of your clients and what information you can provide them that will be useful to them.

Beyond content, I think we should be looking at expanding the use of digital touch points and tools. For example, use Skype or other videoconference tools for a virtual in-person meeting no matter where someone is located. That satisfies the needs of both the tech-literate client who values efficiency and the client who values face time conversations.

One thing is clear, virtual interactions are here to stay, and we should be embracing technology wholeheartedly as a key part of our engagement with clients. Our clients will demand it of us, and even if the relationship is a virtual one, they want choice, convenience, and control in working with an advisor. Regardless of how sophisticated the technology becomes, ours is still a relationship-based business no matter what channel clients choose to use.

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