mature couple at home meeting with financial advisor

On many occasions, I have been asked whether robo-advisors or artificial intelligence (AI) will replace human advisors. My answer is that it depends on advisors’ ability to connect with their clients. Using clear and consistent communication with clients, while managing their expectations, will lead to success. Failing to do this may lead to clients replacing you with a robo-advisor or AI.

The first step to securing your future with a growing business is to determine whether you have a strong foundation on which to grow your business. By that, I mean, are you sure you’re doing a great job with existing clients? Consider installing processes to connect with your clients and exceed their expectations. This pertains not just to returns on capital; it also means understanding and taking a genuine interest in your clients.

You know the importance of the “know your client” (KYC) obligations, but this is a different context altogether. This is not just about ensuring you are compliant; this is about actually understanding your clients and making sure they feel understood. Forging a bond with clients will ensure they cannot replace you with robo-advisors or AI. Here are some steps you could take to do this:

  1. Listen carefully to clients to understand their issues and concerns rather than planning your response or retort.
  2. Give clients the time they need with you to process the information you impart to them — and make it comfortable for them to ask questions.
  3. Define the terms you use so clients understand everything you say, such as “time horizon.” Only this level of understanding could lead to open dialogue.
  4. Endeavour to know and solve your client’s problems.
  5. Put your clients’ needs first. Don’t consider your own needs.
  6. Keep up with your clients’ changes and prepare updates to your clients’ KYC forms that are meaningful. Clients must feel connected to you to share these changes. It’s easier for them to say all is fine, nothing has changed, rather than reporting changes.
  7. Underpromise and overdeliver on everything. This is all about managing your clients’ expectations and ensuring they’re never disappointed. In a good year, remind clients of the goals — and that there are no promises that the successes experienced in previous years will be repeated.

Clear and consistent communication between advisors and clients leads to success. While you’re in the process of growing your business, it’s important to protect your existing clients by understanding them and taking a genuine interest in them. You can achieve this when you come to appreciate and understand how to execute on each of these requirements. There will be long-term gains to you and your practice by learning to serve existing clients and then real success while you continue to build your business on this strong foundation.

So, if you’re worried about robo-advisors or AI replacing you, remember that effective communication — including listening and being responsive as well as managing clients’ expectations — will ensure that won’t happen.

This is an excerpt from Communication Risk: How to Bridge the Client-Advisor gap to Protect and Grow Your Business by Ellen Bessner. Copyright 2018 Ellen Bessner, published by Babin Bessner Spry LLP.