3 FinTech tools advisors should be embracing

What sets you apart from your competition? With the arrival of the robo-advisor, what are both high-net-worth and mass affluent investors looking for from an advisor? What will keep you one step ahead of the robo and above your human counterparts? Undoubtedly one of the biggest draws to attracting new clients is technology utilization.

Embracing FinTech for clients

It is no secret that young people are constantly switching devices from their smartphone to tablet to computer, and they want financial planning experience that can seamlessly switch to whichever device they prefer in the moment. Clients of all ages are seeking a uniform experience to track their returns and stay on top of their financial future and goal progression.

Embracing FinTech tools

Clients want a larger role in the planning process and require justification for a financial decision that will affect their future. Being unable to adjust and address today’s tech savvy investors will undoubtedly cause advisors to lost clients to their competition who are using more updated FinTech. Here are three tools that the modern advisor should be utilizing when servicing clients – both mass affluent and HNW – that will help integrate them into your practice.

1. Account aggregation

Account aggregation is not something that every advisor knows they need. However, if their goal is to become the indispensable center of their clients’ financial world, then they will need to embrace this particular FinTech tool. Whenever I am talking to an industry professional and I mention account aggregation and its benefits, they immediately bring up Mint.com.

Almost everyone is familiar with this personal financial management (PFM) tool and how helpful it is for anyone who is trying to form a budget. The real benefit to advisors from this type of account aggregation, however, is that this type data can roll up into a financial plan. The cash flow of their checking and savings accounts, the development of their 401(k), their individual brokerage account, and more are all aggregated into one convenient spot.

As well as being displayed to the client, all of this data needs to roll up into the financial plan in order for an advisor to accurately and correctly assess the needs of the client. From a fiduciary standpoint, this data will help the advisor justify their recommendations in the financial plan. Ultimately, by providing the client with a user interface that contains their financial plan and PFM information, the advisor becomes the central hub of the client’s financial life.

2. Progress reporting

Progress reporting is another financial planning technology feature that will help an advisor justify their recommendations. The financial advising process that leads to product recommendations has evolved from a one-time engagement to an ongoing and continual relationship. Following up on and assessing how prior recommendations have served the needs of clients can help improve the likelihood of proposing steps that will fit with the best interests of a client in the future.

Progress reporting allows an advisor to assess how prior recommendations have performed and led to value for clients. This is true of both the value of a specific investment and the “bigger picture” of how the recommendation, when viewed in the context of a full portfolio and a client’s needs, have progressed the comprehensive plan.

Ultimately, progress reporting improves the documentation that an organization creates around the reasoning and performance of recommendations that can fit the clients’ best interests, but also provides visibility and confidence for clients that the plan is made in their long-term interests.

Want to learn about the other FinTech tools advisors should be embracing? Read the rest of the article here.