Disruptive innovation is happening all around us. And with the advancement of artificial intelligence (AI) and robotics, the future for us humans can start to look as dystopian as some of the darker science fiction movies (think “Blade Runner” and “Terminator”). But there is a light at the end of this tunnel.

Humans want and need to interact with other humans and that includes human advisors. They just don’t seem to realize the true value because they have a misunderstanding of what a financial advisor does. And, thanks to the Internet and other digital technologies, many consumers think they can do it themselves.

I am a strong supporter of putting more control in the hands of the consumer. And many of the most recent technical innovations have been moving in that direction. However, there are times when you don’t do it yourself. There are times when you hire a professional to get the job done right. And that’s where the skilled and knowledgeable human financial advisor becomes key.

A recent study commissioned by the Million Dollar Round Table (MDRT), found that eight in ten Americans have never hired a financial planner. Of those individuals:

  • Less than half have a retirement plan or emergency fund;
  • Less than half have life insurance; and
  • Only 19% have a long-term financial plan for the future.

Among Millennials, only about one-third participate in employer-sponsored 401(k) or retirement plans, even though a previous MDRT study found that Millennials expect to retire earlier than other generations.

They may think they can do it themselves but they obviously cannot.

Here’s where a financial advisor can make a real difference. But not if you think you can still do it with “business as usual” tactics. Instead of resisting digital technology, embrace it. Use its disruptive power to open doors and create opportunities.

Ways to use technology to create opportunity

*You’ve heard it over and over – get connected on social media. However, you need to do it in a sensible way. Use it to engage and communicate, to build relationships. That’s something robo-advisors can’t do.

*Incorporate technology into your business. Many consumers are looking for a combination of cost-effective automation with the need for human advice. There are a number of robo-advisors that you can link with – Betterment for Advisors is one – or look for a company that offers more mix and match services – Envestnet, NestEgg, and Motif are some that offer a more configurable solution.

*Look for opportunities to add value to your service offerings. Financial planning encompasses more than just insurance and investments. How does the client visualize their future? What is important to them? What kind of legacy beyond just financial assets do they want to leave? Again, while technology can support the implementation of more legacy planning issues, it often takes someone asking the right questions for the client to even recognize the need to discuss these dreams or objectives.

An insurance technology solution

Market research has shown that automated advice is growing. But it is also true that as clients progress through different stages of their lives, they have different financial planning needs. Using the innovations of technology and digital services to provide a well-rounded experience for clients is the way the industry is headed.

Since LegacyShield began several years ago, we’ve seen an increase in demand for digital solutions. We’ve also seen an increasing number of privacy, security and easily accessible storage needs as our lives become more complex. We have expanded our services to offer a way for clients to safely and securely store all of their important information and share this information with the people they designate. Take a look at LegacyShield.com to see if our services are something that could add value to your client relationships.

Dan Pierson

Dan Pierson

Dan Pierson is an insurance industry veteran, having run several insurance businesses and eventually selling a nationally recognized life insurance general agency. Dan started LegacyShield to help other insurance advisors grow their practices by focusing on the consumer experience.

Leave a Reply