(Forbes) In an age when asset management has become commoditized, your financial advisor should be able to add value beyond portfolio management. If you, like many investors today, are grappling with the increasing tide of technological complexity, you should expect your advisor to help simplify the digital elements of your financial life.
All the data, documents and key tasks that define and influence your finances can get overwhelming.
While an advisor can’t eliminate those burdens, he or she should be able to simplify your understanding of your own money.
This comes down to providing access with the most robust and relevant client-facing tools, with financial planning as the central focus.
Here’s what to look for from your advisor in the digital age:
When you scroll through your smartphone, chances are you spend very little time thinking about how commonly used apps work, because they are likely intuitive and easy to use.
The same standard should apply to financial technology. That, however, is rarely the case.
The reason is that financial services providers often struggle with how to integrate user-friendly and cost-effective software offerings, often leaving clients to wrangle with a bundle of tools that are equal parts inefficient and counterintuitive. Ideally, advisors should have tech tools that aggregate everything from investment portfolios to checking and savings accounts, all under a single sign-on.
Once you have access to all your accounts in one place, you ought to be able to customize your experience. Younger investors often prefer interactive spending trackers and budgeting assistance. Older investors may just want to see their total net worth and retirement income estimates. Meanwhile, do-it-yourselfers sometimes crave a trading account of their own, with an advisor having a view into their activities. And still other clients want a virtual document storage center or to communicate via video conferencing.
Whatever your preference, don’t merely expect the proper customization -- demand it. Of course, customized offerings likely entail added costs and will come in different forms, like how gym membership plans are designed. Some firms, for instance, offer everything from self-directed, automated investment platforms (the “basic” package) to access to a human Certified Financial Planner (“premium”).
Regardless of the route you choose, your advisor should provide industry-leading asset management vehicles and be willing to take the time to consider your financial and lifestyle needs to ensure you are getting the service that best matches your circumstances.
Most crucial of all, your advisor should have technology that crystalizes the big picture. As you get older, your financial life tends to get more complex. As that happens, you have an increased need for a fintech solution that can gather your data from disparate sources and synthesize it for you in a way that makes sense.
Some advisory firms use third-party vendors to do this for them, while other firms build solutions in-house. From an investors’ perspective, either approach is fine. The important thing is making sure your data is protected and presented in an easy-to-understand format.
The best platforms give you a clear view of your total net worth, age-based progress toward retirement (or your decumulation pace while living on retirement income), categorized budgeting and spending analyzers, investment performance, as well as online document storage.
Total net worth is found by pulling data on all your investment and bank accounts, insurance policies, real estate, other forms of property, loans and credit cards. Online document storage can hold your written financial plan, risk profile, list of family members and beneficiaries, wills and estate plans.
Even the most user-friendly and straightforward tools might still call for some one-on-one guidance. Good advisors will show you how to use the software they provide. Just as they should explain their investment philosophy and make sure you are comfortable with it, in the digital age advisors must take the time to make sure you are comfortable with their tech.