It’s the year 2030 and another industry has been wiped out by technology. There are no longer any positions for Financial Advisors. They’ve all been replaced.
Really? Well not really…but I do believe the industry is shifting and it’s shifting quick.
I believe that the strong will survive but the weak will perish.
Why would any consumer choose to work with a sub par advisor if they can have a technology friendly relationship with a robo advisor. They enter their information, type in or speak their goals and Boom! Out spits their personalized financial plan. And they didn’t need to sit in that awkward meeting with a pushy salesperson.
A lot of consumers will take that route but I don’t believe it’s for everyone. In fact, I believe most people still have the need for a human to human interaction.
Let me explain why:
First off, people, generally speaking, are not disciplined. The robo advisor may give them direction on what to do and how to do it, but when it comes time to take action, people tend to not follow through. People are held accountable by people, not machines. If we ever became 100% reliant on robo advisors, more and more people would not be doing the things they should be doing. They just don’t have the discipline.
Second, people may pick and choose. The robo advisor may recommend life insurance, disability insurance, IRAs, investment accounts, etc. If the person decides that disability insurance isn’t relevant to them, they wouldn’t have to do it. They wouldn’t have to do it if a human advisor recommends it either, however, that advisor can take that opportunity to explain the importance, educate them that their ability to earn an income is quite often their most important asset and share a personal story of a claim they’ve paid. That interaction is imperative to get clients to do what is important even if they don’t see it.
Third, robo advisors don’t care. It’s not that they don’t care it’s that they can’t. They can’t read emotion and know how to respond in an effective way to get the prospect to take action. The problem with this is that people do not make logical decisions, they make emotional ones. If the robo advisor, in this case, cannot tap into the emotional connection that the client has to their goals, they may not be motivated to take action and work towards them.
So what does all this mean and how can you as the advisor protect yourself?
It’s simple, actually.
Here are some quick tips:
- Remain relavent
- Follow up
- Share Stories
- Add Value
- Make the Personal Connection
- Keep your Promises
- Ask Great Questions
- Recognize your Clients when they Make the Right Move.
Thanks for reading!