A Financial Advisor’s Must Have Tools for 2013

Leading Financial advisors now offer services beyond pure investment and financial planning. Their services have expanded to include account aggregation, on-line collaboration, vaults (for the storage and sharing of important documents), money transfer, bill pay, mobile apps and expanded advisor/client communications.

As an integrated whole, these tools add tremendous value to the client. In addition:

As advisor’s usage of tools increase, more touch points with clients are established that result in stronger and longer lasting relationships.

As clients use and receive benefits from these tools they become more involved in the financial planning process and discover a more value-added relationship with their advisor.

MUST HAVE FINANCIAL ADVISOR TOOLS, 2013

Account Aggregation

Aggregation is the process by which investors and their financial advisors collect all of the data needed to create a complete and accurate picture of an investor’s entire portfolio – for purpose of advice giving and reporting. There are four ways to aggregate; Do-It-Yourself, Basic Feeds (screen scraping), Enhanced Tools (screen scraping w/enhancements) and Advanced Aggregation (reconciled data received through custodial feeds and/or manual entry.

Budgeting

Budgeting tools allow users to track both their income and expenses against a budget that includes their required and discretionary spending as well as their savings goals. In conjunction with account aggregation that includes transactional data, this is a powerful tool to foster discussion between an advisor and a client to make sure they are on track to reach their goals.

Vaults

A vault allows advisors and clients to store documents for access and sharing as appropriate (e.g. Wills, Trusts, Powers of Attorney, Tax Returns, Statements and Client Reports). A vault should enable both the client and advisor to store, share, edit and/or hide documents as desired.

On-line Collaboration

On-line collaboration enables the live sharing of up-to-date data between the financial advisor, a client and the client’s other advisors (e.g. attorneys, accountants, insurance agents) incorporated within a flexible entitlement system for multiple user types. Advanced tools also would allow for users to create and foster discussions.

Mobile Applications

Mobile tools should incorporate the relevant information and functionality that clients want to have on-the-go. This includes their ability to see account values and recent transactions as well as the ability to trade, deposit checks and transfer money. Functionality is typically starts as a subset of what is available on the firm website with the goal of providing complete functionality and often-times unique mobile-only tools

Money Transfer / Bill Pay

Clients desire an easy, fast and secure way to transfer money between accounts that the advisor manages, those they do not, and external entities (bills, one-time checks, etc.). These tools are available at various banks and many clients desire the same functionality with their brokerage accounts.

Advisor / Client Communication

In addition to the standards of communication (phone, email, letters, and in-person meetings), new communication tools should be explored. Instant message tools that show if their advisor, or their assistants, are available provide clients with greater than 9-5 support without an unacceptable burden on the advisor’s team.

Communications through social networking can be an effective tool in communicating non-client specific information (e.g. a weekly newsletter) and gaining referrals.

Conclusion

Leading-edge tools portray to clients that their advisor is offering them the best possible service.

Out-dated reports and limited services lead to the assumed (and real) perception that their advisor is not offering best-in-class tools. Advisors that offer the above services distinguish themselves from those who do not.

Relationships and performance will always be paramount. However, tools and output cannot be ignored and have a significant impact on the growth of an advisor’s practice.

For more information on EMC’s perspective on any of these tools, please feel free to reach out to me to discuss in more detail.