Advisers Seek Balance Between Client Service and Automation

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Advisory firms have long prided themselves on a “high-touch” business model that has traditionally put a premium on serving individual clients in face-to-face conversations. But as profit margins tighten, especially for smaller firms that are lowering fees to compete against larger registered investment advisers and broker-dealers with robust technology platforms, advisers are now debating just how much they should favor a high level of personal service over state-of-the-art technologies that better automate communication and workflows.

A look into the “high-tech versus high-touch” debate shows that it’s far from over.

Fidelity Institutional Wealth Services’ 2013 RIA benchmarking study shows that 77% of high-performing firms and 61% of all other firms ranked “enhanced client experience and satisfaction” as one of their top goals in using technology. Yet 74% of the high performers and 53% of other firms said that while they are investing in technology, it’s less than cutting edge, and only 24% of all firms said they plan to keep increasing technology spending consistently over the next five years.

But Trish Haskins, who leads the technology consulting group at Fidelity Institutional, argues that technology is not just about efficiency and capacity anymore. It’s about reaching out to the client and adopting more user-friendly tools in the future, she said.

“More and more, technology is a great way to enhance the client experience,” Ms. Haskins said. “It helps advisers grow their business and keep track of prospects.”

BEHIND THE SCENES

Some advisers say they prefer to keep technology “behind the scenes,” functioning largely in the back office while clients continue to get personal treatment.

Damian Gallina, an adviser at Buttonwood Financial Advisors, uses a cloud desktop interface called Workplace, which is supported by his custodian, Fidelity, and outsources his portfolio accounting to Advent Software Inc.

But he would “rather go old school” with clients.

“There’s nothing high tech about the interaction I have with clients,” Mr. Gallina said. “If a client calls and leaves a message, I call back and have a conversation. I don’t have to decide how to communicate with clients; I respond with the communication they use.”

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