Technology enables advisors to deliver high-touch service — at scale

Independent advisory firms traditionally had to choose between pursuing greater scale and delivering high-touch, personalized service. Today's technology enables advisors to both automate their operations and facilitate scalable growth, while providing a tailored client experience that helps them stand out in a crowded marketplace.

For more than 30 years, the ability to provide trusted advice based on deep client relationships has fueled the success of RIAs, but with that growth comes challenges of maintaining service at scale. The good news is technology offers new ways to deepen and expand those service offerings, enabling more personalization for each client's unique situation and new levels of differentiation for advisors, according to Schwab's 2023 Independent Advisor Outlook Study (IAOS).

"Digitization is about allowing the appropriate distribution of human capital within a business to those things that are personal and relational," said Jon Beatty, Managing Director and Chief Operating Officer, Schwab Advisor Services. "Advisors who embrace technology can stay on the cutting edge of personalization, and maintain that edge, at scale."

Historically, it's been difficult to continue delivering high-touch, one-to-one experiences as firms (hopefully) continue to attract more clients. With access to a widening array of increasingly sophisticated digital tools, advisors can streamline routine, low-value tasks and deliver more personalized experiences informed by data-driven insights.

But delivering high-touch service at scale isn't just about automating wherever possible, the study found. It's important to balance both human and digital capabilities that meet clients on their unique terms.

Experts interviewed for the IAOS suggest the most successful firms use automation, digitization, and data analytics to create more informed and engaging client interactions, whether face-to-face or virtually. Firms, for example, can offer clients access to self-service web portals, or utilize tools that analyze client actions to help advisors anticipate potential, unspoken needs.

"Advisors spend a lot of time massaging data to help know what kind of transactions to generate on behalf of their client," said Jalina Kerr, Managing Director for Client Experience at Schwab Advisor Services. "They're relying on data in their ecosystem and their tech stacks to tell them what the next, best action is. A lot of that could be truly automated."

Automation, the streamlining of repeatable, labor-intensive tasks, remains a key trend. Modernizing a firm's core infrastructure creates operational efficiencies that enable advisors to serve more clients with greater efficiency and productivity.

The benefits of automation most cited by IAOS respondents were saving time (79%), followed by greater focus on high-value tasks (70%), and spending more time with clients (67%). That echoes Schwab's 2022 RIA Benchmarking Study, which found that firms that embrace digital workflows annually spent 12.5% fewer hours per client on operations.

Digital workflows also help reduce the risk of fraud, deliver faster and more convenient interactions, and sharply reduce the need for re-work caused by human error.

So while RIAs have made tremendous headway automating their day-to-day work, the IAOS study found advisors have more work to do in realizing the benefits of automation across more areas, such as financial planning updates, portfolio reviews, client reminders, investment management, and trading.

"There's a ton of opportunity in this space, but firms are going to have to invest and evolve faster than they ever have before," said Heather Fortner, Chief Executive of SignatureFD and contributor to the IAOS. "Technology innovation in the advisory industry is moving quickly, and I don't see that pace slowing down."

The IAOS, now in its 16th year, takes the pulse of independent advisors and offers a window into future industry trends. The latest study is based on an online survey of 862 RIAs as well as in-depth interviews with eight industry experts.

What you can do next

• Discover how Schwab's technology offerings can help your practice deliver exceptional service with less effort.
• Check out Schwab Alliance, the online and mobile platform designed exclusively for clients of independent advisors.
• Consider a custodian that invests in your success. If you're thinking about becoming an independent advisor, contact us to learn more about the benefits of a Schwab custodial relationship.