(April 2006) On March 14th, Citigroup Smith Barney released the results of their Affluent Investor Poll. They checked in with the wealthiest segment of American society — those who have at least $100,000 in investable financial assets — and asked (among other things) how they felt about technology.
Although at least 40 per cent said they used the Internet to do things like check account balances and conduct their own investment research, most of those surveyed said they still prefer to do business either in person or over the telephone. According to the research, 25 per cent of affluent investors use the Internet to trade or communicate with their brokers via e-mail, and even fewer are prepared to move money electronically from one investment account to another — due in part to security concerns they feel are inherent in online trading.
But using technology in your practice is about more than just communicating via e-mail and online transactions. Many technology-based solutions are about increasing efficiency, enhancing existing processes and improving overall levels of service. So while "touch" may be more important than "tech" to well-heeled clients, there are plenty of ways advisors can be using their computers to serve the high-net-worth (HNW) market:
Web Presence: Affluent clients may want to seal deals in person or on the telephone, but other data released by Forrester Research earlier this year suggests that HNW advisors still need to have their own Internet sites. According to the Forrester poll, millionaires in search of investment information are more likely to visit their advisor’s own site than third-party content sites like Yahoo Finance. And which features do they want? "Most say account information is important; half cite asset allocation and equity research tools; and nearly half put a high value on stock and mutual fund screeners."
Profiling: Getting to know new clients’ fears and preferences can take quite a long time, but technology can speed up the process. In the November issue of the Institute of Chartered Accountants of British Columbia’s Beyond Numbers, Harrington Lane president Dan Brintnell described the Financial DNA program his firm uses to get inside the head of important new clients. Equipped with a series of online personality tests, Brintnell says he’s able to generate a unique financial behavioural profile for the client. This allows him to not only choose the right clients up front, but also tells him how he can motivate clients to act more quickly.
Research: Clients who have more money may also face more complicated financial problems, so advisors working in an upscale market need to have access to up-to-date technical reference material. Rather than spend hours leafing through a book in search of an answer to your tax or legal question, consider purchasing access to the electronic research databases available from professional publishers like Carswell, LexisNexis and CCH Canadian. You can search by key word or phrase, and you’ll get your answers in much less time.
Coordination: In the March edition of the Journal of Financial Planning‘s newsletter, practice coach Matt Oechsli said that affluent clients want a "financial coordinator," but lamented the fact that very few advisors had embraced the concept. Capgemini, a U.S.-based financial services consultant, suggests that advisors use a virtual service network to bring it all together. By collaborating online and meeting at virtual web portals, they suggest it’s possible to connect the advisor not only with HNW family members, but also with other professional advisors such as accountants and lawyers.
Number Crunching: A simple, back of the envelope calculation may be sufficient for very basic retirement and insurance planning, but do you have the resources to deal with estate freezes, holding companies and operating companies? A comprehensive financial planning software package, can help you create a professional-looking report to address the needs of your wealthier clients. For a closer look at six financial planning software options, please click here.
Productivity: Any sort of tool that could help you to become more efficient, thereby freeing up more of that essential "face time" to spend with your wealthy clients, is probably a good investment. This could be a Personal Digital Assistant (PDA), a BlackBerry, or a contact management software program like Act! or Maximizer. If you require human help but either don’t need or want to hire a full-time assistant, you could also consider contracting the services of a virtual assistant.
Paper: Most people may have made the transition from hard copy to emails, but Citigroup Smith Barney found that affluent clients still like to have paper copies of their account statements and investment transaction confirmations. If this is the case, consider installing a high-quality laser printer in your office so that you’ll be able to provide the quality documents high-net-worth clients expect.
Andrew Rickard is a freelance writer located in Toronto, Ontario.
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