Combining High Tech and High Touch to Achieve High Value

By Rob Klapprodt, Corporate Strategy Officer


Digital technology will play an essential role in the way that advisors service clients and operate their businesses; however, technology alone is not enough to build a business value proposition. This was a key theme highlighted during our webinar, “The Future of High Tech and High Touch Advisors,” featuring panelists Michael Kitces and Vince Pellegrini.

The webinar emphasized the importance of combining high tech with a high touch service model. As firms strive to address confounding business challenges — fee compression, active versus passive investments, and attracting new lines of wealth to their business — technology can augment business functions constrained by manual processes. The advisor can more nimbly support their business operations and better service their clients by spending less time on business administration tasks and more time assessing, diagnosing, and prescribing solutions that best fit a client’s objective.

Since the rise of the first robo entrant, newswires have belabored the threat of robo or digital tech on traditional advisor models. This perceived threat is actually an opportunity because tech and humans are complementary. An algorithm alone cannot prudently assess the many areas of an individual’s financial life and make the necessary strategic decisions related to retirement planning, estate planning, tax planning, healthcare planning, eldercare planning, and the many other personal financial areas most people face. A parallel analogy, drawn by Michael Kitces, relying on technology alone for all of your financial planning is like trusting a low-cost prescription provider with a diagnosis, as stated in his blog post “Why Robo-Advisors Will Be No Threat to Traditional Advisors.” “If there is no human interaction and no conversation occurred,” he says, “a prescription consumer runs the risk of not fully understanding the negative outcomes of a certain medication.” Investing in the market is high stakes and requires contextualization and risk disclosure beyond what digital technology alone can offer.

In short, real-time, digital technology enables advisors to spend less time on the things that, although necessary for business operations, are not high value. “The high value,” as Kitces describes, “Is having a conversation with a client… to get to a better outcome faster.” Technology that can reduce manual efforts and streamline administrative functions through automation enables advisors to place efforts where they are most needed — in front of clients.

Michael Kitces is the Partner/Director of Wealth Management at Pinnacle Advisory and the author of the blog, “Nerd’s Eye View.” Vince Pellegrini is Senior Vice President of Client Experience at Vestmark.
Read more about digital technology in our article, “The Rise of the Digitally Augmented Advisor,” featured in the spring issue of the Investment Management Consultants Association’s (IMCA) magazine. For more information from our webinar, “The Future of High Tech and High Touch Advisors” watch the recording and download supporting information from Michael Kitces.

By Rob Klapprodt, Corporate Strategy Officer