Last week, I was in New York City for the second annual In|Vest conference for the wealth management industry. I have to applaud the folks over at SourceMedia for doing a great job with this one – excellent speakers, and well thought-out sessions. To the many of you I was able to connect with, it was really good to hear your perspectives and exchange ideas. As expected, there was a significant focus on technology and industry trends.

There continues to be a lot of discussion on Robos, disruptive technologies, and the future of the industry. Unsurprisingly, the conversation wasn’t “are these fads?” or “how can we apply this?” or “what are you seeing?” Resoundingly, the theme was “innovate or die a slow painful death”. Unlike before though, innovation doesn’t just mean adoption of some new technology – it really means a major re-think and change of your business and value proposition. Gone are the days of wholesalers, said one of the thought leaders in the keynote.

I’ve been following Joe Duran for a while, and have become a bit of a fan of his. So it was an absolute joy to see him in person and hear him live on a panel discussing the impact robos are having on the industry. The panel talked about how great it has been, because it is flushing out the advisors that aren’t providing value. Robos are more than just a delivery channel, they are a new value proposition that is forcing traditional advisors to provide greater value. They talked about a shift to becoming “Financial Life Advisors”, where your advisor is responsible for your financial wellbeing and achieving your goals. I think about this a lot like having a “financial doctor”. One of the key points made was that this new generation of doctor-like advisors will need interoperable systems and integration of information is key. This not only improves transparency, but enables the advisor to make more informed decisions about your financial wellbeing. I can’t stress how important it is for firms that want to ensure long-term viability to make strategic investments in advisor technologies that help them deliver this fiduciary standard of care.

One of the coolest sessions was the “Idea Hackathon”, a lot of interesting topics discussed in a group speed-dating style setup. We talked about a problem with trust and perception of financial advice. Part of the issue is education on the value of financial advice. But a big part of it is also just doing a better job to earn trust. An analogy was made to the negative perception of legal professionals that used to (and in some cases still) exist. The difference is that lawyers have a clear value and there is a justifiable need for them. The interesting part of that conversation was how we would measure the success of efforts to improve trust and reputation – the answer is perhaps in social media. Measuring likability and trustworthiness through those media. Fundamentally, that means advisors need to start engaging customer through these new digital channels.

Another idea we discussed during the hackathon ties back to financial advisors acting more like financial doctors – which is educating investors (patients) on options, providing advice, and encouraging healthy behaviours. A lot of the issues for investors today come from poor habits. So, how can we enable advisors to enable investors to be more financially healthy with their lifestyles and habits? Again – we turned our eyes to the healthcare industry and looked at disruptors like FitBit and Nike that have really gamified personal health and fitness. Not only have they directly impacted consumers’ ability to manage their own wellbeing, they provide a huge tool for doctors to measure and educate patients. Similarly, the investment industry needs tools that allow advisors to take in data from investors to measure and educate them and start the process of gamification. With any luck, encouraging young savers today will result in wealthy investors tomorrow. More importantly though, it shifts concepts like performance reporting from simply investment returns to an overall review of financial health and goal achievement. Firms can take this a step further to indeed “shape up” by incentivising and compensating advisors based on goal achievement rather than ROI and AUM.

I look forward to next year’s In|Vest conference, and the topics we’ll discuss. In the meantime, reach out to me in the comments or directly and I’ll be happy to share my thoughts on these subjects and more.