Embrace the Future Financial Planners Need Not Fear Technology.

• Author: Freed, Glenn
• Position: Financialplanningtools

the future of all industries in the services sector will be shaped by technology. At different places and at different times, we have seen record labels, movie studios, grocery shopping, hotel booking and several other services revolutionized by new types of competition that have harnessed the power of technology. Investment firms have not been immune to these forces, as we have seen with the rapid growth of passive investing tools, roboadvisers and mobile stock-trading platforms that allow investors to trade from a smartphone. It's only natural to ask how new technologies will change the financial planning business.

Where We Are Today According to the Bureau of Labor Statistics, in 2020, there were 275,200 personal financial advisers in the United States. We've read about the reduction in the number of advisers, and there are probably many outside the industry who believe advisers will meet the same fate as bank tellers, travel agents or secretaries.

However, people still want counseling when it comes to investing, and more broadly, to financial planning. Clients, especially affluent ones, will not rely solely on an algorithm to make some of the most critical decisions about their future.

A few weeks ago, I was rereading "Breaking Through," an excellent guide to the industry published by CEG Worldwide's partners in 2013. One number caught my eye: research showed that more than 90 percent of affluent individuals--those with more than $ 1 million in investible assets want to work with a lop financial adviser. My experience tells me that likely has not changed. When it comes to essential matters, people still want to see a doctor or confer with a lawyer. Or a financial adviser. Technology can facilitate these interactions, but it will not replace them.

The challenge for advisers is how to grow their business through engaging and, crucially, retaining profitable clients. Only one approach will work:

spending more time devoted to them and attending to their needs and concerns. Even in a new, more tech-enabled world, a more lient-centric practice is what advisers will still need. This almost sounds like a cliche, but technology presents an opportunity to move in that direction decisively.

Tech-driven, but Much More... Many advisers spend a lot of lime in non-client-facing activities, which do not add much value. They need to build costly infrastructures, which then impact the fees they charge to run a profitable business. This is where I...