In the wake of recent technology advances and evolution of the robo-advisory phenomenon the imperatives of financial advisors have significantly changed over the last 2 years or so. Besides the price advantages that rob-advisors were able to pass on to clients due to the scale provided by tech, companies like Wealthfront and Betterment did a really swell job of winning the confidence of young investors. The best (human) financial advisors, though, have been able to continue to do well despite the recent changes in the market. Here are just a few thoughts on the how and why of it … feel free to add more in the comments section:
1/n They understand their clients deeply: Just as an investor needs to fully understand why she is investing and what her investment style will be, an investment advisor needs to know the investing profiles, goals, risk appetite, ROI expectations, investment size and other relevant things about each investor they are advising. While some of these may seem to be direct questions, it’s not always so simple to get the information out of your clients. An intimate understanding of their lives and family needs are is quite essential.
2/n They stay on top of technology: Tech beats tech. Nowadays things move so fast that if you’re not a tech enthusiast you could be at risk of missing out key opportunities or not seeing imminent challenges. Instead of being dismissive or defensive about new technology, the best financial advisors have embraced it to beat rob-advisors. They understand the value of human capital and it’s strengths when applied over and above tech. There are some great systems available now which help financial advisors be more efficient, smart and agile. Why ignore them!
3/n They look for ideas in different ways: A key component of making good investments is coming up with great investing ideas – picking stocks differently, watching out for new parameters and observing large investors closely. In fact, tools like StockalPRO (#ShamelessPlug) give you the ability to discover stocks by over 5000 themes and tags besides standard industries and sectors and help you create beautiful stock discovery workflows with many modern parameters. Must try!
4/4 They Observe the Herd, But Don’t Follow It: Tech stocks in the late 1990s and financial stocks in first decade of 2000s should give everyone a great lesson in being carefully aggressive. Bull-runs don’t last forever, neither do Bear markets. As a financial advisor we often need staying power more than anything else. And that comes with patience and restraint.
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