The 21st Century Advisor - Powered by Tech and Assisted by Humans

Life, Death, and Taxes.

Unfortunately, there’s considerably more to it.

The landscape of wealth management has changed dramatically, and continues to do so. Advisors now have access to technology to solve for everything they need, whether it's through an all-in-one solution, or a multi-faceted solution with an open architecture nature.

As advisors gain more access to client data, they are able to provide more holistic service than ever before. The breadth and depth of financial planning has expanded, and with technology, all realms of an advisor's practice have evolved. A key development in fintech for advisors has been asset management.

The development of turnkey asset management platforms (TAMPs) originally offered advisors an opportunity to offload their portfolio construction to a third party, decreasing their workload. However, TAMPs, are just one example highlighting the need for a human element behind fintech.

Money management is so commoditized that clients have too many options. The more options clients have, the more questions they ask, the more things they want, and the harder it becomes to construct their ideal portfolio.

They’re all different and they all want something else. Meanwhile, advisors are supposed to be out there growing their practice and top line revenues.

It’s time to recognize it, understand it, and embrace it.

Advisors are paid on assets under management rather than portfolio construction. That’s why there should be a greater emphasis on the human element of the wholesale space.

Even if you drew-down the ever-expanding universe of investment solutions to those of one TAMP or third party manager, there would still be hundreds of solutions available. If a client asked for a number of constraints to be met, then theoretically, the unified managed account (UMA) capabilities would be never-ending.

What fintech is supposed to do is make an advisor's life easier, not harder. In some cases, it's just the same, but on a different screen.

Advisors just don’t have time to do it all.

In a day and age where, due to technology, advisors and end-clients have more access to solutions than ever before, it is the human element that remains a key differentiator.

In the example of investment management, the human element is paramount. Whether it’s a client chasing aggressive returns, another who is fee-sensitive, another with tax-sensitivity (or one with all three!), a TAMP isn’t always enough. In the event of a more complex client, a technology solution without a human element backing it adds little to no value at all.

  An ironic inefficiency.

An advisor’s practice is most efficient when they’re outsourcing services, specifically asset management, in this case. However, up until now, the outsourcing they’ve been able to do has been quite limited. More complex client cases have historically demanded a more “hands-on” than “hands-off” approach from advisors.

They haven’t been able to offload these tasks.

Unfortunately, as their access to TAMPs and other technologies have increased, the demands of the average client have only risen. This has meant that, rather ironically, less and less clients have remained happy with a standardized “set it and forget it” model, and begun to demand personalized, "family office"-like service.

Technology that does not solve for complex clients is not beneficial to advisors. That’s what the human element is solving for.

Whether clients are large, small, relatively simple or extremely sophisticated, a technological solution backed by skilled investment professionals will allow an advisor to fully outsource the task. In the example of investment management, no matter the complexity of the case or constraints of the client, a multi-strategy TAMP with a human behind it will provide a solution.

There’s always going to be more than life, death, and taxes, but advisors now have the ability to outsource services for even their most complex clients.

While TAMPs are just one example, with the human element backing technology, the world of a financial advisor is becoming more efficient than ever, despite the challenges that arise from adaptation.