Charlotte County Florida Weekly

The Human Touch

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The pivotal role technology plays in financial planning today cannot be overstated. It has allowed planners to serve their clients more efficiently and enhance their business.

Broadridge’s 2023 Digital Transformation and Next-Gen Technology Study found that 57% of financial services firms agree that digital transformation is their most important strategic initiative. Advancements in technology have made it possible to automate parts of financial services, such as risk management, performance reporting, rebalancing and client communication. As a result of these improvements, clients are kept well-informed about their investments. In sum, technology helps simplify investing outcomes in tangible ways and provides speed and accuracy in the process.

But what about the human element in financial planning — the planner’s role? Has technology’s emergence in the industry lessened its importance? Not one bit. In fact, the adviser’s interaction with the client is more important than ever.

Tech strengthens the adviser-client relationship

More and more, advisers are using technology to improve and grow their businesses. They recognize that better client relationships result from an investment in tech because it modernizes their operations, which next-gen clients in particular expect.

Online portals and mobile apps enhance client engagement, providing clients easy access to their investment portfolios and other pertinent financial information. This enables streamlined communication between client and adviser and the building of trust, which is critical to ensure a lasting relationship. Clients expect regular and personalized communication from their adviser. Keeping them informed about their investments, performance, and changes to their portfolio builds trust as the adviser demonstrates they’re working in the client’s best interests.

It’s all about a client-focused experience. Investors increasingly want such an experience because they demand transparency on how plans are developed and financial advice is determined, what the fees and risks are, and how the reporting gets done.

Leveraging the human element

Financial technology is a tool to leverage, not something that can replace human interpretation. It allows planners to spend time creating customized financial plans instead of spending extra time gathering data and crunching numbers.

As much as investors like the technology that makes the process more efficient, they don’t want to trust their financial futures entirely to technology. For one thing, planners will be important in helping make sense of the technology. And for another, tech can’t think, empathize and communicate like advisers. For example, some financial services firms are offering automated financial planning using artificial intelligence to provide advice based on a client’s current financial situation. But AI-only financial

Every person’s financial situation is different. Getting the best financial advice means getting personalized attention from an adviser, not just numbers technology churns out. Clients need someone who understands them and can tell them what the numbers mean, currently and for their future. Advisers who embrace the technology — and don’t look at it as a threat to their livelihood — will provide their clients with the best experience. They will also make the human touch more impactful, leading to a long-term productive financial future for their clients and a winning relationship.

About the author

David Johnston is the managing partner of Amwell Ridge Wealth Management and a Certified Financial Planner. He built the firm around the fundamental belief that a proper financial plan begins with risk management, then infuses innovative, enhanced diversification within an investment portfolio. ¦

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