Excerpts from Schwab Conference - Financial Planning: The How

In our previous New Think article, we highlighted Yaela Shamberg’s presentation of InvestCloud’s latest app - Financial Planning. She presented this app to a large and interested audience at the Schwab Impact conference in San Diego on November 5th, 2019. This article is part 2 of the common questions asked about this new app. 

In part 1, we discussed how Financial Planning - combined with Digital Onboarding and Digital Advice - can help financial firms collect important client data. In this second part, we discuss how specific AI and behavioral science tools are helping wealth managers and advisors effectively service greater volumes of clients digitally.  

Q: Why did InvestCloud choose to enhance Financial Planning with Behavioral Science methodologies?

As we have discussed in our previous article, in order for ‘AI’ to be of any value, you must have complete and accurate data. Simply, great data equals great results. This is why InvestCloud’s Digital Onboarding, Digital Advice and Financial Planning apps are critical as they play important roles in capturing rich client data directly from the source. The ultimate goal is to provide automation to help wealth managers and advisors service more clients efficiently and effectively.

The process starts right from the very beginning. For wealth managers and advisors, this means ensuring these apps are placed in the right locations on your marketing site or pre-client portals. As clients fill in details regarding their investment objectives, risk tolerances, summarized goals and plans, InvestCloud deploys different Behavioral Science methodologies. These methodologies are essentially gamification techniques designed to engage clients and guide them through a digital journey.

The important thing is to capture the right information about them so that you can efficiently service these clients and do so at scale. As your client moves through the process, greater details are captured such as their future goals and plans, assets and liabilities, income and expenses, etc.  

InvestCloud’s behavioral science methodologies leverage this data and then apply predictive analytics. Because of InvestCloud’s Digital Warehouse serving as a time machine, our clients are able to monitor how an end client’s profile changes over time. Their risk tolerances today will be vastly different than 15 years from now. You can only do this type of analysis if you have accurate data that can be viewed in time-series.

Q: How else does InvestCloud provide automation to help wealth managers and advisors?

Due to increasing fee compression, advisors must take on more and more clients to remain profitable. Robin Dunbar, Professor of Anthropology at University College, London wrote in the Journal of Human Evolution that our capacity for interactive relationships peaks out at 150. For some wealth managers, 75 relationships is a lot. Our goal at InvestCloud is to equip wealth managers and advisors with tools to help them push those boundaries - servicing more clients in digital relationships. 

For example, InvestCloud’s Financial Planning app is unique in that we run Monte Carlo simulations everyday. This is an incredible feat, as our clients do this for hundreds of thousands of accounts. We created this feature, as well as the ability to run them ad hoc, so that each day when an advisor checks their dashboards from their browsers or on their mobile devices, they can immediately see which clients are going astray from their targets. They can immediately see who needs reaching out to and why. 

The advisor can quickly determine if the cause is a change in market conditions, or perhaps the client has increased spending. The important thing is the advisor is in a position to take action, to nudge the client back on a proper path, and for the client to feel their financial plans are constantly being looked after.

InvestCloud understands that It is easier to maintain and salvage an existing $1million dollar relationship than it is to win a new $1million dollar client. This is why we have built a series of integrated apps that help your organization maximize adoption, engagement and decision making to service your clients.