Using technology to become a “cyborg” advisor.

Technology has the power to allow advisors to interact with clients both digitally and in person in new ways. But advisers who don’t embrace this change are in danger of being left behind.

A panel of industry experts discussed this and other emerging trends Thursday at Asset-Map’s AdviceTech.LIVE 2023 virtual conference. The panel was moderated by Malcolm Ethridge, Executive Vice President at CIC Wealth Management, who is also a CNBC contributor and author of the forthcoming book Financial Independence Doesn’t Happen by Chance. Panelists included David Carr, chairman of Equitable Advisors; Burt White, Chief Strategy Officer at Carson Group; and Colleen Bell, president of innovation and expertise at Cambridge Investment Research.

Ethridge said these “unprecedented changes” in technology have left the industry “at a tipping point”.

“Technology is not just a tool, but a driving force behind how the advice experience is delivered,” he said. “Clients are demanding more and more from us while paying less and less for advice.”

White said his “first law” of technology is that “magic is never about machines.”

“Magic is what machines enable people to do,” he said.

Clients are increasingly demanding personalized advice, White said. This means that outdated thinking within firms has left many advisors behind. Many organizations are built on a set of principles that are no longer true, he said.

“There are so many large broker/dealers and custodians and others that are built around the language of accounts. That’s how regulators have always thought about it,” he said. “Their whole language is wrong. In my opinion, the new currency is for households. It’s about families.”

Bell said addressing not only outdated thinking but outdated technology stacks is important for advisors looking to improve efficiency.

“When you have legacy systems, you have to think about how we’re going to roll back the things that were holding us back,” she said.

Ethridge said the inherent difficulty of switching between old and new technology often creates inefficiencies for advisers.

“If I have to switch to a legacy system to get data to work with half of my clients, and then switch to a new system to work with the other half, it makes my job a lot harder than it needs to be , and it makes me much less likely to adopt any new technology as we go forward,” he said. “The hardest thing to do is get that advisor in the corner office to learn a new trick.”

However, Ethridge said these types of transitions are essential because while baby boomers prefer in-person meetings, Millennials tend to prefer digital interactions.

“Advisors have to become cyborgs to adapt to both,” he said.

Bell said that while her firm’s goal was to eliminate all paperwork and live a “paperless existence,” not all clients are digitally inclined.

“I sent my mother-in-law and father-in-law DocuSign. They had no idea what it was. I had to walk them through the process,” she said. “Some people want that paper in their hands.”

White said that as advisers increasingly embrace artificial intelligence, they need to ensure the technology adds value to the client.

“If you add convenience without utility, you’re going to have problems,” he said.

Delivering personalized customer journeys using AI will allow these “cyborg advisors” to fuse this technology with human interaction to “create magic”.

“Anyone who believes that data, analytics and AI will be overvalued is mistaken,” he said. “That’s how you’re going to create these personalized experiences.”

Carr said the demand for advice has never been higher and this technology will allow advisers to deliver that interaction at scale like never before.

“Technology won’t replace advisors, but advisors who embrace technology will replace advisors who don’t,” he said.

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