“Coach’s Forum” is a place in which you can ask your questions, tell your stories or give your opinions on any aspect of practice management. For this instalment, George discusses the wave of technological change that is transforming the financial advisory business and offers his advice on how to adapt to that change. George welcomes questions and comments you have about running your practice.

Opinions regarding the impact of technology on the role of financial advisors range from dire predictions of the death of the traditional advisor to an unwavering insistence that “software will never be able to do what I do for my clients.”

Fortunately, the majority of observers, myself included, foresee the future as more of a collaboration between the power of technology and the insight and professional judgment of the advisor.

To frame the debate, let’s consider it in the context of the four-step evolution of the client/advisor relationship: attraction, engagement, conversion and advocacy.

There inevitably will be an overlap of the capabilities of technology and the influence of an advisor at each stage. At times, one will play the lead role while the other acts in support.

As a creative twist, because the awards season for movies and TV is upon us, let’s use an awards theme to examine each phase of the client/advisor relationship:

1. Attraction

Plot: Advisor ignores digital marketing and risks becoming “The Unknown.”

Nominations: Best Actor: Technology; Best Director: Advisor.

In the old days, we simply called this stage “marketing” and described it as determining what your target market wants and convincing prospective clients that you can provide it through a series of activities designed to capture their attention.

Largely, that still is true. However, the traditional methodology of advertising, direct mail, seminars, face-to-face networking, asking for referrals and other conventional “outbound” promotional activities have given way to digital marketing designed to create “inbound” opportunities. Now, prospective clients seek you out rather than you seeking them.

Many advisors who market successfully today have found that social media is the modern version of networking. Websites have become these advisors’ capabilities brochure, and their blogs, podcasts and webinars have replaced seminars. E-books illuminate these advisors’ value proposition and they get more referrals from Google than from existing clients.

Clearly, although you, in this context, have an important role in determining your message, the messenger – that is, technology – is what gets that message out to a targeted audience in a compelling way. And this strategy encourages those audience members to seek more information about you, thereby increasing the chance of engagement.

Final Scene: Advisor outsources digital marketing to a professional firm and draws increasing numbers of qualified visitors to his or her website.

2. Engagement

Plot: Advisor attracts qualified prospects, then loses them to the competition.

Nominations: Best Actor: Technology; Best Director: Advisor.

“Engagement” is a more definitive and accurate term for “sales funnel” or “pipeline management.” Engagement describes the broader intent of this stage of client development, which is to have a disciplined progression for deepening relationships by increasingly demonstrating your value in order to build trust and confidence.

Your website is the heart of your engagement efforts. It’s where you house your intellectual content, your offers and your calls to action. Your other promotional activities – such as blogs, tweets, posts and your LinkedIn and Facebook profiles – should all be designed to lead prospective clients back to your website.

Once there, your prospects should find a series of offers that sequentially build trust. First is a no-risk, no-contact-info-required encouragement. For example, “Free download: 10 Tax-Saving Tips Many Small-Business Owners Ignore.”

Next, a low-risk (email address required) invitation to “Sign up for our newsletter, For Business Owners Only.” That might be followed by “Click here for our e-book, Anatomy of a Successful Business Succession Plan.” And, finally, “Register for our upcoming webinar, Succeeding at Succession.” Each offer brings the prospective client closer.

Again, although the content of these offers should originate with you, the administration of the engagement process, the breadth of its reach and its ability to convert interest into action gives technology the leading role.

Final Scene: Prospective clients eagerly await the next steps in relationship-building.

3. Conversion

Plot: Technology overtakes the advisor’s traditional value proposition.

Nominations: Best Actor: Technology; Best Supporting Actor: Advisor.

The “conversion” stage of the client/advisor relationship-development process is most closely aligned with “selling.” The challenge is that the process of converting a prospective client into a real client traditionally has been built on you demonstrating your expertise and advice process – in other words, your value proposition.

Amid the technology revolution today, however, the traditional value proposition of being a good financial planner, portfolio designer, picker of stocks or fund portfolio manager or estate planner is being usurped steadily by technology that provides similar or better results faster, more accurately and less expensively.

The choice facing you is either to fight the incursion of technology into your value proposition or to leverage it in a collaborative effort to meet the needs of your clients better. Among the categories in which technology now can perform very effectively and efficiently are financial and estate planning, investment policy statement generation, portfolio design, portfolio monitoring and rebalancing, and client account reporting.

As technology evolves, you will be able to add aggregation of client financial information across institutions (currently available in the U.S.), automated “onboarding,” client self-services, artificial intelligence-based needs analysis and process improvement.

Final Scene: Advisor welcomes technology to his or her practice, enabling the business to prosper to unexpected heights.

4. Advocacy

Plot: Advisor puts long-term client loyalty at risk by fearing technology.

Nominations: Best Actor: Advisor; Best Director: Advisor; Best Supporting Actor: Technology.

We know that obtaining a new client costs much more than retaining an existing one, which should lead you to ask: “How can I ensure the retention of clients?”

Historically, advisors looked to provide a high level of client service as the key to loyalty, which they delivered through periodical reviews, occasional on-demand activities and public relations. In today’s world, with much of those traditional services – including information updates, financial plan review, portfolio rebalancing and client reporting – having been assumed by technology, the standard of what constitutes good service has been raised significantly.

In that context, the starring role for you will be much more than “subject matter expert” or “process engineer.” The hero of the story will be you – if you manage the client experience through every stage of the relationship. If you can do that, you will play the parts of tourist guide, coach, confidante, counsellor, consoler and cheerleader.

This stage consolidates the previous ones. In the attraction phase, for example, your role is to guide your messaging so that it speaks to your desired market and makes relevant content easily accessible to those who seek it. Throughout the engagement phase, your role is to allay fear and confusion through a progressive demonstration of expertise and experience. The conversion phase will find you sitting on the same side of the table as your clients, using the tools of technology together to analyze, investigate, validate and implement custom-crafted solutions to your clients’ requirements – both personal and financial.

Advocacy recognizes that technology will help you deliver superior results in your traditional role, at the same time as you become more deeply and passionately engaged with your clients.

Final Scene: Advisor benefits from the value of lifetime client relationships.

George Hartman is CEO of Market Logics Inc. in Toronto. Send questions and comments regarding this column to george@marketlogics.ca. George’s practice-management videos can be viewed on www.investmentexecutive.com.