Why it is time for Independent Financial Advisors to go Digital

Author: Jim Eckel | | No Comments

Why is it time for independent financial advisors to embrace digital transformation? We dive in to address this question in detail and understand why financial advisors are going digital and what they are doing to enable a digital transformation in their businesses.

Digital is more important than ever. COVID, lockdowns, and WFH have accelerated the pace at which digital platforms are being adopted, from work to entertainment to daily life. This applies across the board; financial advisors and the financial advisory sector are not alone in embracing digital transformation. Today, businesses that are more prepared for the digital world survive and grow, even in constrained circumstances. Those caught off guard are struggling or shutting down. Being agile, flexible, and smart with digital is the key to success right now. What does that mean for financial advisors? Why is now the best time for advisors to get started with digital transformation? Let’s dive in and answer those questions.

What is digital transformation?

Everyone talks about digital transformation, but few people seem to know exactly what it entails. Digital transformation isn’t rocket science. It simply means adopting digital tools and platforms for critical processes in your business. For most companies, this would mean budgeting for the initial investment, a key objection point. In the long run, though, a properly executed digital transformation strategy will deliver substantial ROI through a reduced number of manual processes, faster execution, fewer errors, better utilization of resources, and long-term business sustainability.

What does digital transformation entail for financial advisors? In practice, it will involve adopting digital solutions for client outreach and marketing, your financial planning process, data collection and compliance, reporting, and other internal functions.

There are many digital tools available which can help you transform your advisory practice. As the world moves to digital, this is something all advisors need to consider. But getting on board with digital transformation right now could yield substantial benefits. Here’s why:

Cost-Effectiveness Matters in the Current Business Environment

Everyone is dealing with financial constraints in the COVID era. Cost and efficiency savings aren’t just nice to have — they’re essential for business sustainability. Your customers are looking to cut costs and, at the same time, retain services in some form or another. They’re also looking for ways to plan their finances strategically.

New customers are likely on the lookout for small, independent players. In this context, digital transformation can help advisors cut down on operational costs, making it possible to address customer needs at a more competitive price point without cutting into margins. The current situation can actually help financial advisors attract new business if they leverage digital the right way.

Digital can help advisors provide the same level of experience as enterprise financial advisory firms but in a more personalized and cost-effective way. Digital saves on overheads in terms of data entry, research, and payroll costs, putting you in better control of your finances, and making it possible to offer better deals.

Do More for More Customers

One of the most significant advantage digital offers you is the ability to scale. With COVID and the uncertainties in the market, your total business volume may likely come down. You’re probably going to see some customer attrition level as clients move from your premium packages to DIY solutions. Digital enables scaling, which can help you address a broader market because even if your revenue per customer is lower, the volume can offset any short-term loss.

There’s an increased market need for financial advice and planning across a broader range of demographics with so much uncertainty. Using audio and video for remote advisory services can help you reach these clients, regardless of where they are and at a price-point that makes sense to them.

This isn’t the only way digital transformation helps you do more. Automating manual, repetitive tasks frees up a substantial amount of time you can invest in one-on-advisory, leading to a more personalized experience, even with a larger client load. Moreover, as you scale up, robust digital infrastructure will guarantee a reliable experience even as data and bandwidth are going up.

Position Yourself to Leverage Emerging Tech

Emerging technologies like Artificial intelligence (AI) and Machine Learning (ML) have immense financial planning potential. AI and ML can transform key processes in advisory services, like forecasting and real-time reporting. Natural language processing means that chatbots could offer clients real-time advisory not too far in the future.

Blockchain is another emerging technology that will play a vital role in the FinTech and financial advisory spaces. Blockchain promises disruptive change in terms of security, data control, and access. Why does all this matter to an independent financial advisor? Understanding emerging innovations and leveraging them from day one can put savvy advisors in a position of strength once these developments become mainstream. AI and blockchain have the potential to threaten conventional financial advisor business models. Adapting right now can give advisors the time to prepare and realign their offerings for long-term sustainability.

Exceptional Client Experiences

We have already talked about why financial advisors have potential in the current context; they offer competitive advisory services at lower rates, together with a personalized, trust-based customer experience. As competition heats up, though, both between independent advisor practices and advisory institutions, Independent financial advisors need to double down on these advantages to deliver an exceptional, differentiated customer experience.

Going digital can take your ordinary advisory CX into something customers will appreciate. Digital solutions can provide customers with dashboards and real-time updates. They can act as information hubs, consolidating advisory and financial information in a single location. Smart forms and data collection can make the onboarding process more manageable, too, bringing customers into your system with minimal pain. Combining this with personalized advisory services can turn your customer experience into a key selling point as market competition heats up.

Digital can help you build a great customer experience even before onboarding, as part of the sales and marketing process. With the right tools, you can personalize outreach and target the right clients, and increase the volume of qualified leads in your pipeline.


Should financial advisors invest more in digital?” This is a question every independent financial advisor should be asking themselves right now. The answer is yes, without a doubt. Digital transformation offers you benefits that far outweigh the costs you are likely to incur. The key is to plan your digital transformation strategy to align digital with your long-term business objectives.

The finance space is at an inflection point right now; change is rapid, with long-term implications. For advisors, this means taking the right steps today so that you are ready for tomorrow’s challenges and opportunities.

Diversity and scale are vital to ensuring that your advisory practice survives the turbulence and comes out stronger. Digital is a key enabler here; digital transformation is not an option. For independent financial advisors, it needs to be a priority this year and, in the years to come. 

Leave a Reply

Your email address will not be published. Required fields are marked *