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Financial Advice

Why You Need Client Technology Ratings

Evaluating a client's proficiency and comfort level with technology should be a part of the onboarding process.

Technology continues to transform our profession, allowing advisors to maximize efficiency and increase their value to clients. While implementing the latest software suite or product may ultimately improve an advisory firm's overall client satisfaction or position the firm for future success, each client has his or her own unique comfort level with technology and using digital tools. That often leads to a mixed user experience, where some clients (or potential clients) may feel overwhelmed or frustrated with an advisor's technology stack. At the same time, advisors may feel pressured by their more tech-savvy clients to adopt cutting edge technology in order to remain relevant in a competitive landscape.

Knowing this, it's imperative that advisors not only understand each individual client's comfort level with technology, but also focus on educating both clients and staff on how to use the tools they've implemented--and to ensure they've chosen the right solutions for their clients in the first place.

Create a Client Technology Rating Evaluating a client's current financial situation is a fundamental part of the onboarding process, and this initial period of the client relationship is a perfect time to gather additional information that can help advisors provide a more valuable experience. As part of your data gathering process, assess and assign new clients a "technology rating" on a simple scale of 1 to 5. Much like a client's tolerance for investment risk, a client's technology rating should be multidimensional, representing their comfort level and proficiency using technology, as well as the advisor's observational conclusions.

On this scale, a client with a score of 1 would have limited proficiency or comfort with using digital tools; an example might be an older client without a personal computer at home. A client with a score of 5, in contrast, would be both proficient and highly comfortable with technology, perhaps someone working in an IT field. A score of 3 would represent the average tech user.

This rating can then be easily tracked in your CRM solution and incorporated into your existing onboarding process. If using a prospective client application, you might even incorporate two or three questions on technology comfort level and current tools used in order to further assess whether a prospect would be a good fit for your firm.

For existing clients, the best way to gather the additional data needed to assess a technology rating may be through an annual client satisfaction survey. Through the survey process, you might ask clients to rate how comfortable they are using digital tools and services in general, as well your specific tech stack (client portal, scheduling page, etc.). Further, you can solicit feedback on how you can improve your end-user experience and determine if there are any technology-related pain points to working with your firm. Some existing tools may provide additional insights, such as the ability to track the number of times an individual client is logging into her client portal to access their financial information or communicate with her advisor.

Educate Both Clients and Staff Once all clients are assigned a technology rating, make sure all staff understand said ratings and how they impact client relationships. This is highly important when it comes to helping clients learn how to use your digital tools, such as providing instructions on accessing a client portal or online account information. While many clients begin using new tech tools intuitively and without assistance, others will naturally require more hand-holding beyond an email or PDF instructions. In-person meetings to walk clients through the specifics of a software platform can go a long way in helping them understand why that technology would be useful to them, and help build trust in both the technology and their advisor. This is particularly true if the advisor approaches the meeting with a mindset that it is no less important than a meeting to discuss the client's financial plan or investments. Clients should be encouraged to bring their own laptops or tablets so that they can learn on the same devices they would use at home.

Some clients may resist using new technology altogether, but later re-evaluate their positions with the right coaching by their advisor. Rather than assuming that all clients are starting from the same level of understanding, a client technology rating can help advisors and staff approach client questions or digital learning opportunities from the client perspective. This customized approach can be taken even further depending on the data collected in either your onboarding process or client satisfaction survey, with the ability to track clients' preferred communication method, and whether any clients need to have paper reports mailed to them because they simply aren't able to access them online.

Perhaps the most important factor when helping less tech-savvy clients leverage the software tools you've made available to them is making sure that all staff are fully trained to use those tools. Delegating technology training opportunities to junior advisors or staff members may save you time in the short term, but could jeopardize client relationships if those individuals don't fully understand how to use the technology themselves. All staff members should be "power users" of any client-facing technologies you've implemented, with processes in place to make sure everyone in the firm has the ability to clearly explain key features, access, and navigation to clients.

Implement Solutions That Fit Your Clients Armed with a technology comfort/proficiency rating for each client--as well as other useful data such as an understanding of the tools clients are currently using in their personal lives--it's much easier to implement digital tools that you know will be a good fit for your client base. Data obtained from onboarding new clients or surveying existing clients should also help drive business processes, with clients' preferred communication methods front and center in their CRM profiles, and advisors and staff relying on that information when reaching out. Likewise, any potential negative feedback about existing tools discovered in your survey process should be quickly addressed, either through additional training or weighing a replacement solution.

When evaluating new or replacement technology tools, firms serving primarily younger, tech-savvy clients may find that these clients want and expect the brand-new, well-designed web-based interface for interacting with their advisors and/or accessing plan and account information. Likewise, a firm primarily serving clients less comfortable with technology may not see as much value in adopting bleeding-edge software solutions that require significant client retraining. However, and even with a client base that fits the latter example, most advisory firms are likely to be well-served by implementing tech solutions that are built for the future--specifically, a future client demographic that expects more from their advisors and end-user experiences, as long as clients with lower technology ratings can be accommodated or easily trained thanks to an intuitive and/or customized user interface.

Ben Brown is a certified financial planner and an IRS-enrolled agent. He is the founder of Entelechy, a fee-only financial planning and investment management firm based in Bethesda, Maryland, serving clients in the Washington, D.C., area and nationally.

The author is a freelance contributor to The views expressed in this article may or may not reflect the views of Morningstar.

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