The power of technology to bridge the financial advice gap
Research indicates that nearly 90% of the United States population does not currently receive financial advice, even though many would benefit from it. Especially in today’s volatile economic environment – impacted by rising interest rates, increasing inflation, implications from the COVID-19 pandemic, supply chain disruptions, and global uncertainty – Americans, particularly those approaching retirement, need sound financial guidance more than ever.
Why the advice gap continues to widen
It’s critical for financial advisors to understand why the advice gap exists in the first place, as well as the potential avenues for closing it. Below are three driving factors:
Cost
Many Americans don’t meet the minimum investable requirements to work with financial advisors – which is ironic, considering it’s these lower-income individuals who would likely see the greatest benefit from financial guidance. And even if they do work with financial professionals, individuals or families with lower investable assets often aren’t afforded the same white-glove service and valuable personalized advice as their higher-net-worth counterparts.
Lack of understanding
While the benefits of working with a financial professional may seem obvious, the ongoing financial literacy crisis in our country indicates that a large number of Americans don’t understand basic financial principles. And with the concerns of most of our country focused on paying rent rather than navigating investment decisions, it’s increasingly unlikely they’d seek out professional financial advice in the first place.
Inaccurate information velocity
With the explosion of unregulated financial advice readily available on social media platforms and other digital networks, Americans may think they’re getting the guidance they need to make sound financial decisions even without consulting a financial professional, when in reality the content they’re consuming could be generic, misrepresented, or incorrect.
The role of technology in bridging the advice gap
At its core, the purpose of technology is to improve accessibility and drive efficiencies – two key factors for empowering advisors to democratize financial advice to a broader market. Embedding technology into the advice process helps create economies of scale for advisory firms, enabling:
Lower fees
By streamlining and automating tasks and processes advisors used to have to perform manually, or hire additional staff to manage, technology can help eliminate significant resourcing and operational burdens, creating cost savings that can be passed onto clients in the form of lower, more affordable fees.
More effective communication tools
Obviously, client portals and mobile apps enable more efficient communication between advisors and clients. But technology, particularly digital marketing platforms and applications, also plays a role in opening up the broader market for advisors to communicate sound, educational financial guidance that mitigates the impact of widespread misinformation.
Additional time and resources
Advisors swamped with serving their current book of business and navigating the operational challenges of running their firms are just trying to keep their heads above water. Technology eases the back-office workload, freeing up advisors’ time to improve the service they provide to smaller accounts, take on pro-bono work, or mentor junior advisors to take on lower income clients.
With continued market volatility and the threat of a recession looming, it’s clear the time is now to enable greater access to professional financial guidance so more Americans can enjoy better financial outcomes. intelliflo’s suite of advisory solutions eliminates manual processes and operational inefficiencies, arming advisors with the time, resources, and scale they need to reach and serve a broader range of people while still achieving their business goals.