For advisers, technology is not an elective

Many financial advisers are falling short in their knowledge and use of technology. That was the observation of two veteran advisers who attended the pre-conference technology session of the recent InvestmentNews Retirement Income Summit.

“We, as financial planning advisers, need to continue to dedicate ourselves to lifting up our core competencies,” said Nicholas Nicolette, a certified financial planner and a principal at Sterling Financial Group Inc. in Sparta, N.J.

Mr. Nicolette, whose firm has about $250 million under management, said he sometimes has been frustrated by what he feels is a lack of commitment on the part of some fellow advisers to embrace the complexities of technology and the comprehensive nature of financial planning.

He shared his views with me over coffee just minutes after the technology session ended. I have known Mr. Nicolette for about four years, respect his views and look forward to the time we spend at various events discussing key industry issues. He is passionate about the financial advisory industry and always supports initiatives that he feels will raise the level of professionalism in the industry.

“Financial planners need to always look to expand their technology competencies and there are some out there that just do not want to take the time to understand the software programs,” he said.

“Sure, it is tough at times. But I get very frustrated when I attend sessions and see an adviser who has made the effort to attend a conference and then seems to just get frustrated and says ‘I don’t need to understand how that technology works; just make it easy to present.’ And then they just seem to give up. Hearing that bothers me,” Mr. Nicolette said.

I shared Mr. Nicolette’s observations with a 20-year veteran adviser who also attended the technology session. He agreed.

“Advisers have a real incentive to always attain further professional development,” said the adviser, who asked that I not use his name. “When it comes to embracing technology, however, the industry is way short of that.”

“It’s evident that some advisers are technologically challenged,” the adviser said. “In this business, we all better learn to get a handle on making better use of the tools that are available. If you cannot figure it out, then hire someone who can.”

Both men agreed that advisers and planners need to be armed with better technology and more product options to better meet the individual needs of their clients.

It’s hard to keep up when the technology is constantly changing, Mr. Nicolette explained.

“That’s why we [advisers] have to step it up and educate ourselves to use advanced tools to better serve our clients,” he said. What’s more, he said it’s critical for advisers to get a better understanding of the latest technology because it will obviously help them create presentations that the average client can understand.

“The bottom line is that financial planners need to learn to deal with complicated technology issues and how to integrate them with our holistic approach,” Mr. Nicolette said. “They need to make investments to expand technology competencies within their firms. It’s all about raising the level of professionalism.”

For the industry to be recognized as a profession, advisers and planners must continue to move to higher levels of competence and be able to demonstrate their expertise, said Mr. Nicolette, who stressed that it goes beyond technology.

“Imagine if you went to see a doctor, and he looked at some scans from test results and he told you that he didn’t really know how to read them. You would have no confidence in him as a professional,” Mr. Nicolette said.

The financial advisory industry has come a long way in recent years, but it still has a way to go.

“This is an evolving profession. We will only be taken seriously as professionals, like doctors and lawyers, if we keep pushing the envelope and raise our knowledge base,” Mr. Nicolette said.

Jim Pavia is the editor of InvestmentNews.

Related Topics: ING Group, Just Thinking