Your New Partner: Client Data

Have you ever been browsing Facebook and come across an ad for something you just need to have? How did they know I needed a Furbo dog camera, you might think. I was just talking about how my dog needs to be surveilled when he is alone in the house (you know, so you can watch destruction in real time).

Technology today likely knows more about your clients and their needs than they do. And clients readily give their information in exchange for convenience and safety. Smart refrigerators tell them when they’re out of certain groceries—some go so far as to order the missing groceries. Video cameras alert them when there is a stranger outside their door and allows them to talk to that stranger from wherever they are.

Our phones know our patterns. Our smart speakers are always listening and predicting what we want. Some might argue this is not a good thing, but it might be for financial planners.

Bernie Clark, executive vice president and head of Schwab Advisor Services, noted in a recent interview with Financial Planning (“What’s New With Your Client? Data Will Tell You Before They Do”) that in the near future, technology that tells you what your clients are up to is going to be more prevalent.

Clark noted that client data will soon be analyzed to alert financial planners when wedding planners are hired or big jewelry purchases are made. Essentially, data will become predictive and you’ll know when big changes are coming for your clients and be able to be more proactive.

Some new software even helps planners predict how much clients are likely to spend on healthcare by analyzing their health history and location, according to the Aug. 5, 2019 InvestmentNews article, “Tech to Help Advisers Plan for More Years of Healthcare Costs in Retirement.”

While many planners have been employing predictive analysis to figure out how to best reach a prospect, using client data to predict what is coming down the pike for the financial planning process is perhaps new for many others.

“No matter how good you are as a human, you’re going to miss stuff,” said Jeff McMillan, chief analytics and data officer at Morgan Stanley in the 2017 InvestmentNews article, “Wirehouses Use Predictive Analytics to Shore Up Goals-Based Planning.”

“Data-driven analytics are key to the current and future competitiveness of financial service companies,” writes Karsten Egetoft, senior solution architect of the financial services industry unit at SAP, in the January 2019 issue of Digitalist Magazine. “We are just at the beginning of a wave of innovation based on data and powerful analytics.”

Ana Trujillo Limón is senior editor of the Journal of Financial Planning and the FPA Next Generation Planner. She also edits the FPA Practice Management Blog. Email her at [email protected], or connect with her on LinkedIn. 

Categories: Client Communication, Technology | Permalink.

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