Stop Trying to Win Against Robo-Advisors: Change the Game by Providing Value they Can’t with Today’s “Predictive” CRM

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Morgan Stanley recently announced it is putting a machine learning-based system in an effort to make its financial advisors (the human ones) more effective. And this means what? That Morgan Stanley is ahead of the pack in understanding that robo-advisors are diluting the entire market, and simply having a “relationship” is not enough to retain clients and keep them loyal. Human advisors today need the ability to offer something more—something robo-advisors cannot: a crystal ball.

But here’s the problem: Human advisors, as far as we know, don’t have one, either.

What Morgan Stanley is doing, though, is s helping its advisors become more proactive by adding predictive technology—which provides more value to their existing clients. The theory they are promoting is that having a human advisor with an “algorithmic assistant” would be preferable to basic software that lumps the clients together using extremely limited information, and allocating assets wholesale within each category, based on how they are profiled.

We think Morgan Stanley has got this right, but do the rest of us necessarily need to have highly customized, complex technology (which is not cheap, I might add) to get us closer to that crystal ball? Or, could your firm achieve this goal with—hmmm—say, your CRM system?

Traditional CRM: It did what it needed to do before, but it’s no longer fighting the fight

If you have worked with CRM in a financial services capacity, you already know what it can do. The typical role for CRM has been that of a control tool—primarily taking care of managing relationships, asset aggregation, and reporting. At AKA, we have been implementing these Microsoft Dynamics CRM systems for many years, and we could easily argue that, when it comes to the integration of data from transfer agents, the systems that manage portfolios, trade settlement systems, and other such programs, we are the go-to experts.

Here’s the problem with traditional CRM systems:  They cannot provide enough value for the financial advisors when it comes to predictive relationship management. The reason for this is that traditional CRM systems are housed on premises, which limits them to using internal data such as roll-up information and account information. These systems have not been able to tap into any external sources, and they also lacked the capability to provide predictive analytics and machine learning. They basically were just not built that way.

Super-charged CRM: Machine learning is the new crystal ball

But hold on: If you’re thinking you’ve lost this war with the robo-advisors, you haven’t. Right now, advisors have the perfect opportunity to show clients that they are not just portfolio managers. They can help their clients reach their goals and realize their dreams. But to do this, they must get in front of the information so they can start providing such an unbelievable client experience that their client begins to think their advisor does indeed possess the ability to see into the future. Today’s CRM can aid them in doing just that. In fact, what CRM can offer now is pretty amazing.

Taking advantage Cloud capabilities, the CRM functionality in Microsoft Dynamics 365 can instantly integrate with other systems along with their information sources. Microsoft also features Relationship Insights, which basically super-charges CRM, turning it into a predictive tool that adds value through a proactive approach. Relationship Insights offers Microsoft’s capacity for managing external data as well as data that you have typically integrated within your CRM system. That takes CRM—and client relationships—to a new, exciting level by leveraging AI and machine learning along with the Cloud.

With the parameters and triggers you establish in the system, CRM reaches out to advisors well in advance—allowing them to make smarter, more predictive decisions that will benefit their clients. Beyond just monitoring their clients’ portfolios, advisors can now ensure that action is being taken on trends in the earliest stages. In addition, by monitoring social media channels, the advisors can provide a more personalized type of guidance. For example, if an advisor begins noticing that a client is posting lots of photos of sailboats on Instagram, he (the advisor) can then reach out to discuss how the client can work the purchase of a sailboat into their financial plan.

With this new layer of technology, a reactive CRM changes to a predictive tool, thereby allowing for greatly improved outreach to your clients and a considerably higher relationship score. The very minute you give a financial advisor the ability to make better decisions in the limited time that they have, you have added more worth to their client relationships. You’ve allowed them to focus more on those clients who are more valuable, increasing the chances for retention.

I’d like to see a robo-advisor do that.

Change the game!

To summarize, the CRM of today is equipped with predictive technology. Programs like Relationship Insights give your advisors the ability to build upon those precious, human relationships they have with their clients, allowing them to focus on helping them achieve their goals and live the dream. And that, my friends, is how you get a client for life.

So, stop playing the robo-advisor game–and learn how to change it. Check out our recorded webcast, Competing with Robo Advisors: How to Carry a Bigger Book of Business While Providing Clients with a High-touch Experience.

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