Today, there is an app for just about everything. Need to find the cheapest place to park downtown that’s within walking distance to your meeting? There’s an app for that. Want to reserve a bargain hotel or fill up your car with the least expensive gas in your neighborhood? There are apps for those things too. We used to toss our spare change into a jar and then take it to the bank. Now, there is an app called Acorn that essentially does this for us; the spare change jar meets the robo-advisor.
Our finances have been automated in virtually every way. We can access our money online, via our phones, our laptops and our tablets 24/7. There is rarely a need to visit our banks for routine or even for more complex transactions. The ability to pay online or via our phones has significantly reduced the need to carry cash or use checks. And in some places, these methods of payment aren’t even welcome anymore. In many ways, this aspect of FinTech alone has been both life changing and has served to reshape the retail landscape.
Beyond shopping and mobile payment options, the automation of all aspects of our financial lives allows for greater control. It is easy to get a handle on all your accounts and monitor them via programs and sites like Quicken, Mint.com and others. However, the biggest benefit of FinTech shouldn’t be limited to access alone.
The real benefits produce collaboration and extend to playing an active role in managing your financial plan, especially if you work with a tech-savvy financial advisor. There is no need to be tied to a computer or to wait for a brokerage statement to monitor and manage your money. You can do it where and when it’s most convenient for you. Whether commuting to work via public transportation, waiting for an appointment or out for lunch, your financial world – and the advice you may need at any given moment — is at your fingertips.
Financial advice: Not a one-stop shop
The past few years have witnessed the rise of the robo advisor. Prominent names in this space include Betterment and Wealthfront. While the thought was that only millennials and Gen Xers would utilize robos, the fact is that their popularity has spread across a wide demographic including Boomers.
Financial advisors have taken notice, and many have adopted a robo platform of one sort or another to work with a wider range of clients. This not only helps cultivate the next generation of younger clients, it also makes the advisor-client relationship even more interactive and productive.
Many of the better financial planning programs used by financial advisors allow online collaboration and the instant sharing of data. This means that you can see what your financial advisor sees, making it easier to ask questions and receive a quick answer.
For do-it-yourselfers, especially, new digital advice solutions have combined the best of both worlds. This technology allows them to play a part in managing their own financial lives 24/7, while seeking and receiving the level of guidance that they need via a relationship with a financial advisor.
This type of online collaboration is not unlike an interaction between a patient and doctor. In many cases, an online appointment via a video connection is all that is needed to diagnose a minor illness. There is no need to make an appointment or miss work to see your doctor.
This isn’t to say that there isn’t value in a face-to-face meeting with your financial advisor if it’s convenient for both of you. If not, technology is there as a back-up, enabling advisors and their clients to build relationships and offering investors the opportunity to easily work with an advisor outside of their local area.
A win-win for wealth management
Many have questioned if this increased access and automation is a good thing or not. I’ve worked in FinTech for three decades, so I think you can guess my answer. But, as we know, there can be some challenges to having non-stop access to choices that previously required a lengthier decision-making process, like one-click payments on Amazon, for example. I’m sure many of us have experienced “click regret,” after splurging on a purchase or two.
It’s easy to make split second decisions just because you can. But financial decisions, especially those with a potential major impact, should be made only after sufficient thought and consultation with a trusted advisor.
While instant access may challenge your impulse control, it also enables collaboration more than ever before. This is where its real value is made most apparent to me as I work with advisors and firms who are looking for ways to deliver financial planning in ways that meet the unique needs of their clients.
Tech-enabled collaboration is a win-win. And there are no limits to how this can be enhanced in the future. From voice technology to virtual reality, the list of new technologies that can further boost the financial planning experience goes on.
Ultimately, FinTech has bridged together aspects of our lives that were once separate. And the best part is that we can choose to use it — and the advisors who embrace it — in the ways that work best for us.
FFB is a not-for-profit platform that engages different types of financial institutions of the country; assist them in their journey to reach next level