3 Reasons You Are Losing to Robo-Advisors (And You Don’t Even Know It)

Welcome to the information age where new technologies are being introduced on a regular basis. For financial advisors the most obvious sign of this is the robo-advisor. Companies like Betterment and Wealthfront are investing millions of dollars to market their business to the next generation of investors and it’s working. Many advisors live under the assumption that their business is immune to the presence of robo-advisors and that’s totally understandable, but it’s not practical.

Don’t fall victim to a false sense security, if you catch yourself thinking the following, you need to take a second look: “I haven’t lost any business to a robo-advisor because…

…my network requires a personal touch.”
…high net worth investors don’t work with robos.”
…my clients have worked with me for years and will never leave me.”

Reason #1 — My network requires a personal touch.

Generally speaking clients prefer brands with some level of human interaction, a fact robo-advisors have started to pick up on. Most robo-advisors are starting to add a human touch to their product offering. Take this press release from Betterment, for example. Gone are the days when giving a phone number to a client or prospect was enough to beat out the competition. These small gestures will start to have less perceived value as the financial service industry evolves.

The Solution: Ongoing communication is more important than ever. Let’s focus on your existing investors, seventy percent of consumers say they open emails from their favorite businesses. You can showcase your strengths and set yourself apart from the competition by sharing content that starts conversations.

Reason #2 — High net worth investors don’t work with robo-advisors.

High-net worth individuals are using investment tools more than other advisors. In fact, wealthy investors are open to, aware of and utilizing these services at a higher rate than you might expect. Investopedia says “Most high net worth investors, are choosing to use both humans and computers to manage their money” which means you may not be getting the share of wallet you once were from these investors.

The Solution: Sharing content that resonates with your clients and speaks to their interests allows you to build a rapport with your investors. By engaging on a more personal level you strengthen your relationships and transition from advisor to trusted friend and confidant. Advisors also have the option to add robo services to their business in order to win over prospects.

Reason #3 — My clients have worked with me for years and will never leave me.

Typically your oldest clients will not voluntarily leave but if you’re primary audience is retirement age individuals it doesn’t hurt to start thinking about the future now. Millennials are familiar with technology; don’t lose the next generation of clients to robo-advisors. Connecting with the heirs of your investors is key to maintaining those assets long term.

The Solution: It’s never too early to start a conversation with the family members of your clients. Social media is the perfect way to gain exposure to that audience and communicate with the millennial generation. Brand yourself as a relevant and trusted resource for everyone in your extended network by reaching out on Facebook or connecting on LinkedIn.

Wrap-up

The advent of robo-advisors has forced an evolution within the financial services industry. Connecting with your customers in a meaningful way is more important than ever. Opening up a dialogue with your clients and piquing their interest with content they want to read will help highlight the largest thing in your favor, the real human element. Staying top of mind and engaging with your network will set you apart from the competition, help you retain your customers and earn their referrals.