Technology is playing an increasingly important role in wealth management and financial planning, and combined with a great human advisor it is a potent mix.
But for financial planners there’s one area of technology that has mutual benefits for clients and planners, according to a new study from the Financial Planning Association and eMoney Advisor, which offers a client portal solution among its offerings.
Drawing on insights from 849 financial planners of diverse backgrounds and business models, the research found that client portals are one of the stand-out technology solutions that, when used effectively by financial planners, can make a meaningful impact.
The findings focus on a cohort identified as "Power Portal Users," who not only believe that technology is important and use client portals but also have at least 40% of their clients using portals.
One of the most important benefits for financial planners is improved client trust, with 80% of respondents saying it has made a substantial difference in this regard. Almost two-thirds reported greater client loyalty, 55% said clients were more satisfied with their practice, and 67% said the use of client portals has boosted referrals.
For clients, reduced financial anxiety, greater confidence in their decisions, and greater motivation to reach their financial goals were all reported among the benefits for using portals.
"The development of technology solutions has grown exponentially in recent years to serve the needs of financial planners and their clients. Technology has played a critical role in connecting me, as a financial planner, more meaningfully to my clients while connecting them to critical information," said James Lee, 2023 FPA president James Lee. "This research with our partners at eMoney Advisor doesn't just highlight that connection; it quantifies it and provides the rationale for every planner to consider the role of technology in their practices."
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The survey also found that 64% of financial planners intend to increase spending in technology in the next two years.
Higher client satisfaction, increasing client engagement, and realizing improved workflow automation are the focus areas for their spending.
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