It’s Time To Become a Bionic Advisor – Are You Ready?

by Jonathan Bega

“The Fourth Industrial Revolution is still in its nascent state. But with the swift pace of change and disruption to business and society, the time to join in is now.”

Gary Coleman, Global Industry and Senior Client Advisor, Deloitte Consulting

We are currently in the Fourth Industrial Revolution, and with it will come sweeping changes. These changes are industry agnostic. In fact, they’ve already started to hit every industry imaginable. From taxis to payments, from retail to insurance, the Fourth Industrial Revolution is changing the way we buy, sell, work, and relate to each other.

At its core, the Fourth Industrial Revolution builds off of the digital technology era that began in the 1980s. Coined by Klaus Schwab, Founder and Executive Chairman of the World Economic Forum, the Fourth Industrial Revolution is about the sweeping changes driven by new technologies at a pace unmatched in human history. Quoting Wikipedia:

 

“The Fourth Industrial Revolution builds on the Digital Revolution, representing new ways in which technology becomes embedded within societies and even the human body. The Fourth Industrial Revolution is marked by emerging technology breakthroughs in a number of fields, including robotics, artificial intelligence, nanotechnology, biotechnology, Internet of Things, 3D printing and autonomous vehicles.”  

The Fourth Industrial Revolution can be seen when an autonomous truck recently made its first delivery and when Elon Musk bets that you’ll one day your car will make you money through ride-sharing on its own. It is also why Nest was valued at over $3.2B and the ubiquitous rise of AI in technology all around us.

Insurance, too, is not protected from the changes being driven by new, smart technologies. In a recent survey by Business Insider Intelligence, they asked executives from Global Financial Service companies what percentage of their businesses they felt were at risk from standalone fintech startups. The results were below:

According to insurance executives, they expected that 21% of their business would be at risk. And don’t forget that technological changes often catch companies completely off-guard, so this is likely a severe underestimate. After all, technology is the reason that since 2000, 52% of companies in the Fortune 500 have either gone bankrupt, been acquired or ceased to exist.”

So if executives think that 21% of their business will be at risk, and we know that at least 52% of all Fortune 500 companies were blindsided by the risks to their businesses, we can suspect that this 21% is an enormous underestimate. And it is. The future is going to show many major shakeups. That is what the Fourth Industrial Revolution is about – radical changes across the board.

And we’re starting to see this disruption in the financial advisory market as well. In rapid succession, we have watched new entrants enter the financial services market trying to shake up the old structures and displace advisors. Mutual fund advisors were the easy first targets with a myriad of robo-advisors coming online, but players such as Zenefits, League, and Lemonade have begun taking on insurance as well. For financial advisors, this is an enormous threat. And the biggest problem is that these advisors aren’t equipped to take on this threat. They lack the technology to compete with these new entrants. And, without this technology, advisors will lose. They will go the way of the dodo.  

I didn’t set out to write this as a scare piece. This is no chicken little, “the sky is falling” warning. I am not a soothsayer reading the entrails of chickens and predicting doom. In fact, you can categorize me as optimistic to the chances of financial advisors. I do believe the future has room for them. However, I also believe the future will leave behind advisors who do not quickly adapt to the new realities of the Fourth Industrial Revolution.

What advisors need is to create a new pact with themselves and with their clients. They have to create a new version of themselves. At Finaeo, we call this the Bionic Advisor. It is an advisor that merges with technology to help produce better client engagement, more efficiency, and smarter processes.  

And the Bionic Advisor isn’t years away. In the financial services industry, the early wave of Bionic Advisors have already appeared. Primarily, we are seeing them pop up in asset and wealth management. Specifically, many Bionic Advisors are starting to use roboadvisors as a back-office tool to help them in multiple ways. From providing better client-facing service, to being able to target the underserved mass affluent and middle class, to helping generate efficiencies in the back-office.  As an article about the Bionic Advisor on ETF.com stated:

“Financial advisors who use robo technology and firms that provide the platforms say the biggest benefits for financial advisors is making back-office tasks more efficient. How much technology an advisor uses is now customizable, says Greg Vigrass, president of Folio Institutional, which provides a variety of robo-advisor services.

The magic that’s coming out of the robo trend isn’t around black-box algorithmic investing. It’s really around automating the business process [and] moving to a digital engagement model … engagement by the client, at the level that the client wants to be engaged,” Vigrass said.

So if you’re a financial advisor reading this, what does it mean? It means that it’s go time. It’s do-or-die time. It’s time to get on the bus or watch it drive forever away. It’s time to start taking the first steps towards transforming yourself into a Bionic Advisor.

To best understand the bionic advisor, there are three aspects worth talking about:

  1. Back office efficiencies
  2. Client-facing technologies
  3. Data enablement through AI

Let’s discuss each on its own.

Back Office Efficiencies

First, the Bionic Advisor doesn’t spend a lot of time in the back office. Everything from generating quotes to purchasing policies to keeping on top of tasks and due dates is digitally done with minimal manual input.

What does the Bionic Advisor spend those extra hours on? Clients! That is, client-facing activities that build his or her book. If you can get a series of quotes digitally and on the fly while sitting with a prospect, you’ve just shaved off both friction to a sale (the wait time where the client may change his or her mind or go elsewhere), and at least one meeting. If a piece of technology can remind you when to reach out to a client / prospect because you haven’t in awhile, or nudges you to send out pre-written emails after a meeting,  

The Bionic Advisor, then, spends very little time in activities that aren’t directly facing the client. As such, the Bionic Advisor spends very little time in the office unless meetings are taking place there.

Client-Facing Technologies

The second tenet of becoming a Bionic Advisor is using client-facing technologies throughout the pipeline. From prospect to renewal, client-facing technologies give power to your clients to decide on the appropriate communication method, and to receive real-time information.

A few examples that are worth discussing. While almost everyone has a website today (and if you don’t, you need to build one), how many of you have intake forms attached that can take a client through a simple financial needs assessment (or use a chatbot that does the same thing), allowing clients to let you know what they’re looking for from the comfort of their own homes? If you need a good example of this in the asset field, check out Wealthsimple’s signup flow. When meeting with a prospect, imagine the power of showing real-time visualizations of what different products and investment returns will look like for your client. And once a prospect becomes a client, think of the value of bringing them into a client portal where their documents, investment returns, and shared notes exist.

Bionic Advisors give power to their prospects and clients to lead the conversation. The Bionic Advisor is there for the client when required, but is happy to allow the client to be self-sufficient when the client wants to.

Data Enablement Through AI

Data enablement is probably the most interesting and critical aspect of the Bionic Advisor. It is also the aspect that is furthest away from fruition. Today, in insurance especially, there is a disconnect between the product layer of data and the client layer of data. The two never speak. And, because of this, advisors are often left in the dark.

A Bionic Advisor will be enabled by these large repositories of data. He or she will be able to connect client data with product data. What does that mean? Well, imagine a situation where AI technology helps you generate leads. It scans Facebook and Twitter and, when one of your clients announces something that makes it believe said client had a newborn, it notifies you that it may be time to reach out to that client to discuss a better life insurance policy or an RESP. That’s power through data.

Or imagine that you are selling a term 10 policy to a client who fits a certain demographic profile and the AI nudges you towards cross-selling a certain additional product because 73% of other individuals who fit that profile purchased that product. That’s actionable data that affects your bottom line.

The Bionic Advisor, then, will be much smarter and more capable than a financial advisor lacking data. He or she will be enabled to target the right person at the right time with the right product, becoming proactive instead of merely reactive.

Take the Pledge: Become a Bionic Advisor

And that’s our goal here at Finaeo. We want to turn the next wave of financial advisors into Bionic Advisors. That is the mission of Finaeo – we want to become the technological sword and shield for you guys. We want to help you transform into advisors who rely on technology to create better experiences for your clients, are able to better manage your back office, and receive all the benefits from the huge swathes of data you’re creating with your clients. We want to make sure that you use roboadvisors instead of being replaced by them. That AI helps you build stronger relationships instead of fracturing your existing ones. And that data helps you sell, instead of being used to go around you. Ultimately, we believe in keeping the advisor-client relationship alive, we just think it needs to evolve.

Right now, we are getting ready to launch and we want you guys to join us. Come take the pledge with us to become a Bionic Advisor before the market passes you by:

“I pledge to transform my business to better serve my customers. To stay up to date with the latest technologies to ensure that their needs are met, and that they are serviced to the utmost of my ability. I pledge to become a Bionic Advisor.”

We have a limited amount of room for launch, but are looking for awesome advisors who are excited about the future of technology and want to work closely with us to build it out. Sign up with us and we’ll help transform your business!