Financial advisors, as we know them today, could soon be replaced. Not by robo-advisors, investment apps or financial planning software; but by a new type of advisor – one who embraces these and other technologies into their practice to operate in a more modern, efficient and engaging way.

Although face-to-face, personalized advice will always have a place in the financial services sector, the day-to-day functions of advisors are poised to be overhauled. That’s because the industry is undergoing a major technological shift, with everything from client communication and compliance to portfolio management being digitized or automated in some form or another.

“The advisor’s role will always be to run great relationships,” says Larry Distillio, assistant vice president of practice management at Mackenzie Financial Corp. in Toronto. “However, the tools that they use to do that will change over time.”

The shift is affecting all elements of the industry, with financial services firms of all types actively investing in technology. Canada’s big banks, for instance, are launching entire new divisions dedicated to digital innovation. And they are clearly willing to leave tradition behind to compete in this new realm. The Bank of Nova Scotia, for one, recently opened a 70,000 square-foot “digital factory” in Toronto. In good Silicon Valley style, the open space includes ping pong tables, a bowling alley and a fitness studio.

Investment and insurance dealers are also investing in software and apps to help support advisors, and a new breed of financial technology (fintech) companies are gaining traction, with innovative new services for investors, including automated portfolio-management platforms, a.k.a. robo-advisors.

The prospect of technology playing a bigger role in the industry likely makes some advisors wary – particularly in the case of robo-advisors, which could potentially replace the role of traditional financial advisors. However, advisors shouldn’t feel threatened by technology, says Ann Felske-Jackman, principal, financial advisor talent acquisition at Mississauga, Ont.-based Edward Jones. Rather, she says, they should embrace it.

“We believe that technology enhances and augments the personalized service,” Felske-Jackman says, “but we’ll never be looking to replace that personalized service with technology.”

Advisors need to recognize that technology can be beneficial for their businesses, Distillio says. It can help with many aspects of a practice, such as managing compliance responsibilities, marketing, communicating with clients, and perhaps most importantly, improving efficiency so that advisors can focus on clients. “Technology allows you to implement the ideal client experience,” Distillio says. “It frees up your time to do what you do best, and that’s meet with clients, run relationships, and find new clients.”

And because clients are becoming accustomed to using technology in most other aspects of their lives, they are increasingly demanding that the advisors and firms they work with embrace technology. That means ignoring technology simply won’t be an option anymore.

“In our business, we always need to be able to evolve and enhance the way we serve our clients, and the offerings that we give them, and technology is making that happen faster and faster,” Felske-Jackman says. “Technology is evolving based on the clients’ needs – it’s driven by the clients.”

But advisors vary greatly in the speed at which they are adapting to the tech revolution. Many are already integrating digital tools into various elements of their practices, says Mike Donati, president and CEO of Bluesun Inc., a Burlington, Ont.-based financial services software firm. The next generation is moving even faster.

“Younger advisors have grown up with mobile devices and social media and so forth, so when they’re dealing with the industry, there’s going to be a level of frustration around ‘why aren’t you there'”? Donati says.

Others, however, can be slower. Cost is one factor that holds some advisors back, Donati says. That’s particularly so among those who don’t recognize the potential payoff in terms of efficiencies: more business.

“You have to be very selective about where you put your expenses, but if you do the proper business case, those expenses can be, by far, outweighed by the benefits,” he says. “Tech-savvy advisors realize that technology can help them in their sales.”

Research from Boston-based FMR LLC (a.k.a. Fidelity Investments) suggests that embracing technology can indeed have a positive impact on an advisor’s bottom line. The 2014 Fidelity Advisor Insight Study, which involved 933 advisors, revealed that those advisors who leveraged technology fully within their practices had nearly 40% more assets under management than their peers, and served 55% more clients, on average.

As an example of how technology can help advisors generate more business, Donati says data analytics tools can identify sales opportunities within your existing book of business.

“If you were to really leverage data analytics, and drill into your book of business, there are so many cross-sale opportunities and upsell opportunities and renewal opportunities,” he says. “You can really turn technology into an asset, and not a liability.”

A lack of experience and comfort with technology also holds some advisors back. Firms such as Edward Jones are taking steps to help, by providing support and education.

“Our advisors need to be educated on each of the tools as they come out, and more importantly, not just how to use the tools, but how the use of that tool can impact the client,” Felske-Jackman says. “Most of our advisors are quick to embrace it when they understand how that’s going to help their practice, and how that’s going to help their clients. But sometimes we have to help connect those dots.”

At companies such as Toronto-based Canadian Imperial Bank of Commerce (CIBC), the slate of technological tools available to advisors is constantly evolving. Recent initiatives at the bank include efforts to develop more mobile and tablet financial planning tools for both advisors and clients, and a pilot project involving a new video conferencing and collaboration tool that lets advisors meet with clients and share documents remotely. CIBC also recently rolled out new software that lets advisors generate comprehensive retirement planning reports for their clients in as little as 15 minutes.

“Retirement plans and financial plans are key to helping our clients meet their goals, and equipping our advisors with modern tools to help clients understand their finances is a huge part of that,” says Sarah Widmeyer, managing director and head of wealth strategies group at CIBC, in an email.

Using digital tools can make the planning experience much more engaging for clients, Distillio says.

“When you’re meeting face-to-face with clients, why not leverage your tablet?” he says. “Rather than shuffling papers in a messy pile on a desk, have everything in one nice folder on your tablet, where you can sort through presentations, go to different websites, use calculators and tools. And you can make it interactive for clients when you’re sitting in front of them.”

Regardless of how you choose to integrate technology into your practice, it’s important to consider the potential impact on your business – especially with a growing community of fintech startups competing for investor funds.

Even though Felske-Jackman says she doesn’t believe that robo-advisors present a threat to traditional financial advisors, she says the rise of robos is a reminder for advisors to review and refine the value they provide for clients.

“Through an investor’s different life stages, there are questions that come up, and financial and emotional needs that need to be addressed, that can’t always be addressed on a robo platform,” she says.

“[An advisor’s] competitive advantage is the level of personalized service that [you] offer to every client.”


Ross Allan, an independent life-insurance specialist at Allan Financial in Vancouver, is the antithesis of a stereotypical insurance advisor, ensconced in his office, poring over a stack of claims. At a time when parts of the financial advisory industry are struggling to communicate their value to an increasingly demanding client base, Allan, 55, is flipping the script, with a little help from social media.

In doing battle with the sea of online chatter, Allan works at getting people’s attention, both by learning the language of social media and using it to craft a unique, online portrait that reflects his personality. In his case, that means a blend of humour, behind-the-scenes videos and shots of his team at work, including promotion of their social initiatives, such as Kiva, a micro-finance project for women in developing nations.

On Allan’s social-media accounts – Facebook, LinkedIn, Twitter, and even Google+ – details about the culture within his practice are on full display. There are photos of artisanal crafts from a holiday pop-up event, graphics that feature progress updates on his team’s fundraising efforts and punchy videos of Allan doing monologues that poke fun at people’s attitudes about insurance.

The effort is paying off, with Allan successfully avoiding the caricature of an advisor as an impersonal, profit-driven cog in an impersonal financial services firm. “I don’t want to position myself as a stuffy, estate-planning consultant,” Allan says, adding that, if the industry is to change with rapidly changing times, it has to be willing to experiment with new ways of reaching younger demographics.

But finding a new wrapping for an old message is rarely enough. For Dian Chaaban, an investment and wealth advisor at Toronto-based RBC Dominion Securities Inc., using social media means a big focus on sharing information on financial literacy and other industry-related issues.

Chaaban publishes “Word on the Street,” a newsletter featured on her team’s website that explores different topics on a regular basis, from a primer on the second phase of the client relationship model, to why it’s important to keep emotions in check when markets are volatile.

If one of her newsletter pieces proves popular, Chaaban will publish it on LinkedIn for her prospects and centres of influence to check out. Putting out the newsletter and sharing relevant articles is a way for her to broach issues that don’t always figure prominently in clients’ minds, she says.

One of the knocks against heavy use of social media for business purposes is that it’s time consuming. Tweets, Facebook posts and LinkedIn profiles must be maintained and that can drain attention away from other important matters, from meeting with clients to helming an advisor’s own business operations.

Allan deals with that issue by surrounding himself with a tech-savvy staff who are tasked with managing the firm’s social media accounts and other branding campaigns. In his case, that means a marketing strategist, outside contractors and an in-house communications specialist. For a time, one of his daughters also pitched in.

It seems to be working. Although it’s not always possible to draw direct links that tie the firm’s new business to social-media efforts, Allan likes to think that when people visit his firm’s website or online profiles, they feel that they “spent some time with me” and his staff.

Lynn Whetham, financial planner and managing partner at Stepright Capital Planning Inc., in St. George, Ont., also devotes considerable resources to getting her message across through social media and her own podcast series. Like Allan, Whetham sometimes turns to her daughter to help manage her communication efforts, from editing the show, “Stepright with Lynn Whetham,” to promoting it on popular digital platforms, such as SoundCloud and iTunes. Whetham also maintains a presence on Twitter, leveraging it to promote her enthusiasm for what she calls, “mindful money management,” the idea of aligning personal values with strategies for donating and spending money. “We’re coming into a time where there is more attention [by clients] given to a company that we might invest in or purchase from, to be sure that [its] values align with the client’s,” Whetham says.

Preaching a mindful approach to finances is also a message that resonates with Whetham’s client base, many of whom are pre-retirees and retirees who must conserve their investments in order to maintain an orderly flow of income. Broadcasting that message on her podcast – and social media – has helped Whetham attract like-minded clients and prospects.

Whetham also spreads the word about her work through tweeting, blogging and conducting interviews for her show to broaden her circle of contacts. Those efforts have put her in touch with a variety of people who fall outside of her immediate professional network – professors, food-industry experts and social-enterprise entrepreneurs, to name some of her past guests. Through conversations about the ethics of fast fashion and grief counselling, for instance, Whetham educates listeners on issues that interest her personally. “I meet a lot of people [by] doing the radio show,” Whetham says, adding that it makes for a good conversation starter when new clients find their way to her.

– Beatrice Paez

© 2017 Investment Executive. All rights reserved.