It’s time for financial professionals to break free from their comfort zones and fully embrace the new reality — a hybrid approach to financial planning that integrates digital tools with human expertise. The rise of automation and artificial intelligence has significantly shifted how advisors manage portfolios, interact with clients and streamline operations.

Advisors are facing the growing challenge of balancing the benefits of automation with the need for human involvement. On the one hand, automation can help advisors save time and scale their businesses. On the other hand, clients still value the personal touch, connection and expertise that only an advisor can provide.

While automation can offer many benefits, striking the right balance is essential.

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The benefits of automation for financial advisors

Today’s financial advisors juggle many roles, from providing guidance to managing administrative tasks, client meetings and professional development. This time crunch is a widespread challenge. One Kitces Research study revealed that the typical financial advisor spends no more than 50% of their time on direct client activity-related tasks and barely 20% meeting with clients!

By leveraging digital tools and automation to increase productivity, advisors can improve ROI and focus on more complex and strategic tasks, such as developing and maintaining relationships, creating personalized financial plans and providing investment advice. It can also help advisors improve accuracy and efficiency by automating repetitive tasks, like data entry and report generation while enabling them to gain deeper insights into the financial market and client portfolios.

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The importance of human involvement in financial advice

Despite the many benefits of automation, it’s important to remember that financial advice is a complex and personal process. For younger generations like Millennials and Gen Z, a relationship-driven approach is more important than ever. While they prefer technology for tasks that can be easily automated, these generations appreciate personalized guidance on financial decision-making. A recent study found that 85% of Gen Y and Gen Z would like some form of behavioral coaching from their advisors for accountability and support.

Another study found that 69% of respondents cite that they look to their advisors for support to “keep them motivated and on track with their financial goals.” Clients have unique needs requiring human touch and empathy to feel confident about their financial decisions. Financial advisors play a vital role in helping clients understand their financial situation, make informed decisions about their money, and provide valuable support and guidance during difficult times, such as a job loss or divorce.

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Here are a few tips for getting started:

• Identify which tasks can be automated. The first step is to determine tasks that can be automated without sacrificing quality or service. Not all tasks in financial advising are well-suited for automation. For example, tasks that require empathy or judgement are best left to financial advisors. But tasks like content marketing can be taken off your plate by solutions like Nurture & Engage.

• Use technology to enhance the client experience, not replace it. Software such as Asset-Map and Nitrogen can be used to provide clients with more timely and personalized information, as well as to make it easier for them to interact with their advisors. These technologies offer convenience and increased efficiency for the advisor and, more importantly, their clients.

• Be transparent with clients about how technology is being used. Clients should understand how their data is being used and what decisions are being made by algorithms.

• Continue to invest in your skills and knowledge. As technology continues to evolve, it is important for financial advisors to stay up-to-date on the latest trends and developments, especially as they begin to attract and engage next-gen investors.

The marriage of technology and the human touch is the way forward for financial advisors. By embracing automation while preserving the irreplaceable elements of human connection, financial advisors can offer a comprehensive, client-focused approach that meets the demands of today’s financial landscape.

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