Advisors use technology to help clients adjust to the new environment

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The Covid-19 pandemic has pushed more financial advisors to figure out how to meet virtually with clients.

Advisory firms have had to find ways to be able to adapt through the use of virtual technologies to keep their meetings going with clients. That newfound comfort will probably change advisory practices well into the future.

To that point, the first Zoom video meeting that the advisors at Salem Investment Counselors had earlier this year to discuss financial markets was not a resounding success.

“We spent half the time troubleshooting people’s connections, and then it shut down after a half-hour,” said Kip Keener, chief compliance officer for the Winston-Salem, North Carolina-based firm. Salem was ranked No. 1 on CNBC’s FA 100 ranking this year.

Keener immediately switched to a corporate Zoom account and says that videoconferencing between employees and with clients has quickly become an integral part of the firm’s operations.

I’ve been amazed at how quickly employees and clients have adapted to this changed environment.

Mark Mirsberger

CEO of Dana Investment Advisors

“Historically we’ve been pretty low-tech in how we communicate with clients, and the pandemic really disrupted our communication chain,” Keener said. “I think everyone realized that this was something we had to embrace and between the Zoom calls, lots of emails and phone calls, we’ve been able to roll along pretty normally.”

The coronavirus pandemic and all the disruptions resulting from community and office shutdowns have highlighted the increasingly crucial role that technology plays in financial advisory firms. Not only has technology enabled employees to work remotely when their offices are closed to them, but it has helped advisors communicate more often and more intimately with clients in a period of very high anxiety.

“I’ve been amazed at how quickly employees and clients have adapted to this changed environment,” said Mark Mirsberger, CEO of Dana Investment Advisors, which was ranked 2nd on the CNBC FA 100 list.

“We couldn’t engage clients the way we had in the past but new and better technology, including hand-held devices, helped us adjust quickly and smoothly to the situation,” he said.

For most established advisory firms, adjusting to the pandemic has not been about investing in new technology as much as more fully utilizing their existing resources.

William Sloneker, CEO of fixed income portfolio manager Cincinnati Asset Management, says his firm’s existing network enabled his business to quickly transition to a remote-working model.

“We had the infrastructure in our office needed to extend our VPN [virtual private network] and make it secure,” said Sloneker. “If you have the IT knowledge, it’s not a problem to open the network up.”

Cincinnati Asset Management was ranked 6th on the CNBC FA 100 list.

Probably the biggest outlays on technology directly prompted by the pandemic have been for computer and monitor upgrades for employees working from home, advisors explained.

“If our advisors had two or three monitors at work, we wanted to make sure they had them at home as well,” Mirsberger said. “We’ve spent some money on technology, but it’s been less than we used to spend on travel.”

There have been challenges in helping clients adjust to the new environment, particularly older clients used to face-to face meetings with their advisors.

“To some extent, we’ve become tech support for our clients, doing pre-calls with many of them before virtual meetings to help them set up,” Keener said.

He, too, has been surprised how quickly clients have adjusted to new processes.

“Even older people who may have previously resisted before are suddenly very invested in these systems,” Keener said.

More from FA 100:
CNBC ranks the top-rated advisor firms of 2020
Advisor industry seeks to overcome lack of diversity
Advisors adapt as pandemic changes connecting with clients

In terms of the broader spend on technology, the pandemic has not prompted large new outlays by most firms. In fact, some have chosen to delay tech projects because of continuing uncertainty in the economy and financial markets.

“All our 2020 dream projects have become 2021 projects,” Keener said.

A big hardware refresh for all employees is a top priority for him.

“We want to become as digitally oriented as we can, but we didn’t feel comfortable committing the resources at this point,” he said. “This year is about survival and maintenance.”

Overall, for an industry that spends an average of about 4% of its revenues on technology and continues to move toward digital operating models, the tech budgets of advisory firms will continue to grow, industry experts predict.

Michelle Perry Higgins, principal at California Financial Advisors, which ranked 9th on the CNBC FA 100 list, said her firm has had some additional outlays for laptops and monitors for employees working from home this year and the firm continues to invest in technology projects it deems crucial for its competitiveness.

Its most recent initiative was to take the firm paperless over the last 12 months, enabling secure e-document sharing and electronic signature processing.

“It’s a never-ending stream of checks we have to write for technology,” said Higgins. Considering how the investment has helped firms like hers adjust to the pandemic, however, it is money well spent.

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