Advisers seek balance between client service and automation

Effective communication takes place when the receiver interprets the sender's message in precisely the fashion in which the sender intended it, according to The American College's “Fundamentals of Financial Planning” textbook.

“Since any individual’s intentions are private and rarely clearly stated, the receiver of the message has the difficult job of decoding the message without knowing for a fact what the sender’s intentions are,” Lewis B. Morgan, a Villanova University professor of counseling and human relations, wrote in his chapter on effective communication in financial counseling.

That chapter was published in 1990 — before advisers had access to e-mail, smartphones and social media, all of which are excellent communication tools yet compound the problem of relaying messages that might be misunderstood or misinterpreted by clients and prospects.

Advisory firms have long prided themselves on a “high-touch” business model that has traditionally put a premium on serving individual clients in face-to-face conversations. But as profit margins tighten, especially for smaller firms that are lowering fees to compete against larger registered investment advisers and broker-dealers with robust technology platforms, advisers are now debating just how much they should favor a high level of personal service over state-of-the-art technologies that better automate communication and workflows.

A look into the “high-tech versus high-touch” debate shows that it’s far from over.

Fidelity Institutional Wealth Services’ 2013 RIA benchmarking study shows that 77% of high-performing firms and 61% of all other firms ranked “enhanced client experience and satisfaction” as one of their top goals in using technology. Yet 74% of the high performers and 53% of other firms said that while they are investing in technology, it’s less than cutting edge, and only 24% of all firms said they plan to keep increasing technology spending consistently over the next five years.

But Trish Haskins, who leads the technology consulting group at Fidelity Institutional, argues that technology is not just about efficiency and capacity anymore. It’s about reaching out to the client and adopting more user-friendly tools in the future, she said.

“More and more, technology is a great way to enhance the client experience,” Ms. Haskins said. “It helps advisers grow their business and keep track of prospects.”

With every marketing decision advisers make, and every technology tool they use, they are settling the tech-versus-touch debate for themselves in their day-to-day practices.

Michael Sicuranza, a planner at Milestone Wealth Advisors Inc., said he and his business partner don’t lose sight of the human element while trying to get the most out of their tech tools. They use the Junxure customer relationship management system, eMoney Advisor financial planning platform and the GoToMeeting secure online meeting tool.

“Using a CRM to enhance the touches you make can be valuable. For example, most advisers have a schedule for meetings, but we have a communications schedule and reach out when client-specific events are top of mind,” Mr. Sicuranza said.

If he learns in a meeting that a client is planning a trip to Italy, for example, he’ll put a tickler in his Junxure CRM notes that reminds him to send the client a book about Italy.

“We leverage the technology to add personal touches and let the client know we care,” he said.

Sunit Bhalla, a planner and principal at OakTree Financial Planning, runs his own practice and divides his time among client communications, trading on Pershing’s NetX360 platform, administrative tasks, reading and writing. He uses technology to communicate more effectively with clients, using the OmniFocus application for Mac and iOS to track tasks and set up quarterly meetings with clients.

“There are only so many hours in a week,” Mr. Bhalla said. “By running a high-tech practice, I can reduce the administrative tasks and focus on client-facing ones. It makes it easier to spend time with clients on e-mail and phone.”

BEHIND THE SCENES

Some advisers say they prefer to keep technology “behind the scenes,” functioning largely in the back office while clients continue to get personal treatment.

Damian Gallina, an adviser at Buttonwood Financial Advisors, uses a cloud desktop interface called External IT, which is supported by his custodian, Fidelity, and outsources his portfolio accounting to Advent Software Inc.

But he would “rather go old school” with clients.

“There’s nothing high tech about the interaction I have with clients,” Mr. Gallina said. “If a client calls and leaves a message, I call back and have a conversation. I don’t have to decide how to communicate with clients; I respond with the communication they use.”

Similarly, Shaun Dowling, a partner and director of financial planning for Howard Financial Services, has tried to automate workflow from behind the scenes as much as possible. When it comes to client service, his focus is “very high touch and white glove,” he said.

“I have a few clients who text me, but I actively try not to go down that path with the client,” Mr. Dowling said. “Call us old school if you will, but after we meet with a client, we still send a handwritten thank you note. It’s kind of hard to automate that.”