There are several steps that advisors can take to improve their practices and thrive in 2023 despite continued market and economic uncertainty, according to Charles Schwab.
Many of those steps are tied to technology and making sure advisory firms are taking full advantage of the digital solutions available to them, Jalina Kerr, managing director of client experience at Schwab Advisor Services, told ThinkAdvisor during a recent online interview.
Digital modernization should be at the top of advisors' agendas and, according to data analyzed from Schwab's Technology Adoption Dashboard, many RIAs have already made significant progress on that front, the company says.
But there is still plenty of room for improvement, according to Schwab.
During the interview, Kerr discussed that and other Schwab findings and shared her insights on RIA technology trends she expects to dominate the rest of 2023.
"What is really a challenge for all of us is that, as digitization grows, we can't forget about the human side of it," Kerr said. Those things have to connect. Right now it can feel a little bumpy when you're bouncing back and forth from the human channels to the digital channels."
She added: "It starts to become a very tangled web that advisors have to sort out because, at the end of the day, this business is a relationship business. The trust that you build with your clients is a human thing and an emotional thing. How you weave that together more seamlessly with digital and technology is the only path forward."
Below are eight things she said advisors can do to help their practices thrive.
1. Make smart technology investments.
With the market outlook remaining uncertain, smart investments in technology may have an outsized and long-lasting positive impact on advisors' practices, according to Schwab.
For starters, it's important to make sure they're keeping their digital solutions modern.
"RIAs have certainly been widely adopting technology over the past few years" and the "amount of momentum we've seen over the last year or two has been pretty compelling," Kerr told ThinkAdvisor. But there is much more work to do, she said.
2. Make sure you're supporting the most popular digital initiatives.
Digital money movement and digital client onboarding are two of the most popular digital offerings so far, and advisory firms should make sure they're taking advantage of them.
"We saw 98% of the firms on our platform used that move money feature at some point in 2022, which was really quite interesting when I think about what it used to look like, even just a few years ago," Kerr said.
Digital client onboarding is obviously a "more complex process for a client," she went on to say. "Giving us all their account information, funding the account, making sure that all of the attributes that they want associated with that account are set up accurately. So it's certainly a more complicated workflow, but the fact is that 80% of advisors on the platform used our digital onboarding tools in 2022."
Schwab's digital onboarding tools have only about a 4% rework or not in good order (NIGO) rate versus paper or analog, which has an over 30% rework rate for advisors, she said.
