Russell Andrews: Why empathy informs advocacy

Imagine a world where your financial adviser knows you like a parent, understands you like a friend, motivates you like a coach, looks out for you like a doctor, offers the flexibility of a smartphone, creates minimal friction like an Uber, and solves many things in a single place like Amazon.

This is not a rose-tinted view of the future with flying cars and day trips to Mars. This is 2020's emerging norm, driven by changing client expectations, surging technology capabilities and continued increase in market competition.

This perspective not only represents the shift to a more holistic advice model, but a perhaps more profound shift toward the ultimate client-centric proposition.

The transition toward a client-focused business model and away from an adviser-centric model has been fairly evident since the pandemic's start. It has become less about how the adviser chooses to operate and what they have to offer, and more about what the client wants in terms of both interaction itself and the advice needed.

Putting the client first

Overall, advisers have reacted well to the shift toward a client-first approach, as well as the changing working environment. However, it really only represents the beginning of a journey, in which one will inevitably encounter casualties along the way.

We are most likely already seeing the negative impact on advisers who failed to respond to the pandemic proactively with the digital tools available to them, as clients may be feeling somewhat underserved at a time when they need help the most.

What has potentially compounded this further is what many clients will have experienced in their everyday lives during recent months. The support that technology has provided in grocery shopping, homeschooling, digital social interactions and online entertainment has set a new baseline of expectation.

When coupled with an increasingly empowered society, these new expectations are likely to continue to drive - even accelerate - the changing relationship between the client and financial adviser.

How do advisers proactively build a clear plan to not only meet but exceed an empowered client's demands?

The key lies in the technology strategy and the associated prioritisation process. Becoming that parent, friend, coach, etc. overnight is a significant challenge - one that for most, if not all, may be impossible to do at once. However, the scale of the project cannot drive fear and ultimately inertia, as this will likely prove to be the death knell.

Start with identifying a technology strategy that first tackles the need for true client empathy. Without the ability to understand the client deeply, it will become impossible to know what they want, need, or fear from a plan; how to coach the client through it; and ultimately act as an advocate in all advice-related matters.

Before thinking of a technology strategy that focuses on eliminating friction, creating efficiencies and solving for all client needs, advisers must first utilise technology to change the approach to developing a client relationship, and use that to help understand clients as humans.

With empathy comes engagement 

As advisers start to understand what makes clients tick and, crucially, their goals, they can start to serve them in a hyper-personalised way that will more likely resonate with them, and even interest them. As they do, clients will likely begin to engage more regularly and proactively with their advisers, looking for information or guidance. This heightened engagement then provides a platform for the adviser to provide curated content that will help educate clients in a relevant way, which will help enhance engagement further.

This process then becomes self-fulfilling, as it will bring three critical changes: Hyper-personalisation of the advice that meets the minimum demands of the client; client commitment to the plan as they learn and understand more of what they are doing drives greater empowerment; and a feeling of real value that they associate with their trusted adviser.

It becomes less about the fees they pay and more about how they could not cope without them.

Creating a platform to deliver this first stage of advice model transformation is not easy, so it is critical that advisers find a partner who can help - one who shares the same client-centric philosophy and has experience in delivering digital empathy. A partner needs to understand how behaviours drive decisions and recognise data's value and how it can be used to evolve empathy and engagement. And importantly, a partner must have the technological capabilities to support this first stage transformation quickly, and in a way, that will evolve through time as the latter stages of the transformation come into view.

Couple this with a partner who has expertise in investment advice and implementation and the scale to operate in an open-architecture, custody-agnostic framework, and the result is an advice, investment and implementation proposition that is both differentiated and crucially makes a positive difference to all stakeholders.

A client advocacy proposition comes in two shapes: Expertly curated, hyper-personalised advice and expertly curated, hyper-personalised education. The only way to deliver that is with technology investment and an advice solution.

Russell Andrews is head of solutions, UK, Europe & Asia asset management distribution, SEI

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