For the people who are never without their smartphone or their tablet, the world is their oyster, and everything needs to be available to them so they can open programs or information as they see fit.
While that may seem the way of the world in terms of shopping and travel, it is not yet the custom for investment and financial matters. But it certainly could be when the proper online tools are installed.
Although there remains a majority interest in hard copy records of accounts and manipulations of funds, there is a growing interest in applications that would allow investors to see all of their accounts and manipulate them to gain information and make decisions.
These tools are available, and investors who want them will find them. Wouldn’t it be better for you, as an advisor, that an investor finds these tools at your own website, where they might access other information and consider placing a call or sending an email for further information?
Of course it would.
“Online search patterns change daily, and it is difficult for any firm or company to keep up with the habits of investors,’’ said Spectrem president George H. Walper Jr. “But that does not change the fact that financial providers and advisors need to be aware of what investors are looking for online, and the put themselves in a position to provide those services they are looking for.”
An example of the kind of tool advisors should provide, and the way investors have changed in regards to online tools, is the desire to be able to access accounts from multiple providers in one place. The marketplace is creating more consolidated services, and advisors and financial providers can lead the way to consolidate an investor’s accounts from a variety of service providers onto one website.
For several years, the desire for a single-source site for account balances was the No. 1 technological request from investors. But Spectrem research shows that investors have become more sophisticated in their search parameters and demand a more specific level of information.
In the Spectrem study Using Social Media and Mobile Technology in Financial Decisions, Millionaire investors with a net worth between $1 million and $5 million were asked which online tools they would be most interested in, on a 0-to-100 scale. Topping the list of tools was a retirement planning tool and asset allocation to determine the maximum return, which graded out at 51.34.
Interest in this tool was greater (52.73) among Mass Affluent investors with a net worth between $100,000 and $1 million, but lower (47.76) among Ultra High Net Worth investors with a net worth between $5 million and $25 million.
Interestingly, interest in a retirement planning tool was highest among Millennials, for whom retirement might be 40 years away.
Such a tool can allow investors to increase their understanding of their current position in terms of asset allocation and retirement, which can lead to a more informed conversation about investment decisions when the investor and the advisor meet.
Another similar tool of interest to investors would be one to help allocate retirement assets and social security to determine the greatest retirement income possible. Again, the interest in this tool was greatest among Mass Affluent investors (50.36 on the 100-point scale), and would help educate investors about the complicated contorts of the social security system. This tool would likely prompt a phone call or email to an advisor for explanations or further details on how the system works relative to an investor’s portfolio.
There are two other tools which show varying degrees of interest based on wealth levels. UHNW net worth investors have a greater interest in the tool consolidating accounts from multiple sources into one platform. Millionaires and Mass Affluent show a greater interest in a financial planning tool, which would obviously encompass a wide range of products and services.
Top Takeaways For Advisors
Advisors need to make these online applications available to investors:
- A budgeting tool.
- A tool to allocate retirement assets and social security funds.
- A tool for retirement planning.