BACK OFFICE HEROES: Why Technology Now Belongs At The Center Of Client Relationships


Many advisors who have had a love-hate relationship with technology are coming to embrace tools necessary to evolve and grow their practices for the future.

Across all industries, there’s at least a mild distrust of advancing technology that always feels like it may one day have the potential to displace—or replace—incumbent workers. But in advisors’ case, technology was also sometimes seen as a necessary evil, especially when it came to serving clients.

It was one thing for technology to help handle the information management, account opening, trading and rebalancing work behind the scenes. It was quite another when it came to the sanctum of the advisor-client relationship—clunky technology forced advisors to type and talk at the same time, or to break eye contact to find information on the screen, or to swivel between the client and equipment. The tech just got in the way.

Mike Zebrowski, Docupace

Today, technology is moving from disrupting, or, at best, living peacefully outside or behind the client experience, to transforming and adding value to that experience, said Mike Zebrowski, chief operating officer at Docupace—and it’s a good thing, because the financial services industry is going to need tech to do a lot of the heavy lifting moving forward.

“What’s happening is that there are a lot fewer advisors, there’s a downward trend in the number of advisors in the business,” said Zebrowski. “When I started, there were well over one million. I think we’re probably closer to 375,000 advisors now.”

That downward trend continues, yet there are more investors who need help, said Zebrowski, who notes that roughly 10,000 Baby Boomers are retiring every day, a trend that is accelerating. The need for advisors is increasing, but the number of advisors to serve that demand is trending downward.

At the same time, the financial services industry is experiencing pernicious margin compression, said Zebrowski. A lifestyle practice that was once sustained by 100 clients may now require anywhere between 500 and 1,000 clients to maintain the same level of profitability.

“Advisors have to be able to do more with less, and the only way to address that is to use technology to support what their true value proposition is,” said Zebrowski. “The industry has evolved to conclude that their value proposition isn’t really picking stocks, it’s not even building a financial plan, it’s in being a coach. It’s about being a relationship person, and technology can free advisors up to do that and also empower them to have more open communication.”

Some trends are working in advisors’ favor, said Zebrowski. Clients have come to expect, due to the widespread prevalence of consumer-driven technologies like Amazon and Google, to do things on their own.

No longer a negative, self-service is now a consumer expectation in the financial services industry, and not just among the young.

“Some advisors will tell you that their older clients aren’t technology savvy, but I say that’s not true,” said Zebrowski. “My parents, who are great-grandparents now, at this point in tame, say that they will use whatever technology is necessary to communicate with their grandchildren and great-grandchildren as much as possible—they’re okay with that. It doesn’t take much to get people of any age to use technology.”

New Benchmarks

Consumer technology is driving the trend towards digitizing the client experience, said Zebrowski.

“The benchmark for the industry is no longer found by looking at Envestnet or Pershing or Fidelity, it’s what the consumer tools are doing, the tools that most users in the consumer space are already using,” he said, and he isn’t talking about Robinhood or FidelityGo or Betterment or Ally.

“Do you have Instagram? LinkedIn? Twitter? These are the tools that we should be benchmarking ourselves against,” said Zebrowski. “What we offer in terms of a consumer experience should be as simple as all of the other consumer tools that people are actually using on a regular basis.”

For example, Zebrowski uses Twitter to consume information, especially breaking news, and LinkedIn to consume business information. He uses Instagram to communicate with his children, because his children no longer pick up telephone calls and take too long to respond to texts. Conversations by applications’ messaging services are quick, convenient and receive almost instant responses from the people Zebrowski is trying to communicate with.

Advisors should offer multiple solutions to clients so that clients can consume information and communicate by the method of their choosing, said Zebrowski. Most will want a digital experience.

“I was at an airport and I needed a ride, so I pulled my phone out, opened up an app and requested the ride, and Bang! They were on the way to come pick me up,” said Zebrowski. “I could see where they were going, but the driver wasn’t finding me or seeing me, so I sent a message. Because they were driving, they couldn’t get back to me right away, so I switched again within the same application from hailing the ride to texting them my exact location to picking up the phone and calling them. As soon as I called them they answered the phone and I was able to resolve the issue.

“That’s how advisors need to interact with investors. It’s no longer good enough to be analog and just offer digital investors access to the data. Anyone can long into a bank site or a custody and clearing site and look at their information. That’s not the value proposition for advisors. The value proposition for advisors is to make themselves available when their clients need them. Technology can remove a lot of the slack in the system to put them in a position to do that.”

Where AI Will Come In

The financial services industry, as we know it, was built on slack in the system, some of it intentional to prevent or soften the blow of calamities like market panics and bank runs. The result is that money still moves relatively slowly, and the client experience still retains a lot of the hallmarks of an era where most business was done with handshakes and in-person signatures and consumers were accustomed to waiting in lines to interact with a human bank-teller.

That interaction was also a necessity for consumers, Zebrowski points out. People could not access their money without talking to a real, live human being. Stocks, and later mutual funds, could not be bought or sold without a broker or an advisor intermediating the transaction.

“What we’re seeing now is that has changed, and that change was especially accelerated by Covid,” said Zebrowski. “Now we’re seeing it change even more. I think artificial intelligence, machine learning and robotics are only there to get rid of some of that slack for advisors. So, if someone wants access to view their accounts, they should be able to do it, online, with their phone, they should be able to speak to their Amazon or Google or Apple device and get that at any time, night or day.”

AI tools like ChatGPT will help advisors offer this level of service—eventually. Advisors will have to become more efficient to scale up their practices, said Zebrowski, so AI tools will be deployed to help advisors process business—making sure that clients are followed-up with, or retrieving and bubbling up the latest information on a client to help an advisor prepare for an annual review.

But because AI and machine learning are so new, they will enter the consumer experience in other sectors long before they’re widely deployed in the financial services sector, said Zebrowski, and the consumer technology companies will set the standard that advisors will eventually have to adapt their client experience to. There are, however, opportunities to deploy AI in the back office today.

“We still see a lot of not-in-good-order (NIGO) responses within firms,” said Zebrowski. “The last that I saw last week was that it was something like 35% of business that comes in is NIGO. There’s a great opportunity for AI to come in and solve that problem, and there’s no reason why we can’t get that down to 0% of business, quite frankly.”

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