The first robo advisors were introduced in 2008 and became popular a few years later. Today, apart from robo advisors that focus on investment management, other platforms aim to do more. There is a new financial technology that aims to match the affordability of single-family homes to those of the super-rich. In addition, ChatGPT is here and is the forerunner of a dynamic revolution in the financial services industry and many other industries.
Describing the wealthy as having an income of US$ 10 million or more, and considering the needs, wants, and preferences of this group, it is clear that financial technology without an involved advisor will be used by very few of them. . Even then, wealthy people will be relying on various independent financial professionals to implement financial solutions. Another consideration is that it is possible that many of the wealthy who choose to rely on financial advisors instead of using advisors may miss out on great financial opportunities.
Giving a special benefit to a rich person requires a deep understanding of the person’s hopes and dreams, concerns, and worries. We refer to the process of creating a deeper understanding of value as Discovery. According to Homer Smith, Director of the DK Family Office Practice, Founder of Konvergent Wealth Partners, and co-author of Improving Clients’ Financial Lives: Harness the Power of the Accounting Firm’s Elite Wealth Management Practice“Discovery is a way to understand each prospect or client. As wealthy clients often have complex lives and multiple, complex goals, being able to adjust Discovery conversations in real time is important. Consultants cannot do a good job of Discovery if they rely on lists or other types of options. or the technical way. People are very complicated.”
Also, being able to customize the work relationship is very important. These thoughts and ideas are compared to possible financial solutions and communicated in a way that suits a rich person. We refer to this as a story. “By aligning the goals of our affluent clients with family office solutions, and being able to communicate and align with the value of those solutions, our affluent clients take immediate action,” says Vince Annable, CEO and Founder of VFO Advisory Group and co-author. about Your Most Effective Family Office: Maximizing Your Financial and Personal Life.
Today, many advisors are not participating in Discovery and are not creating powerful stories. It goes without saying that the rich are underserved. According to Mark Fujiwara, President of the Fujiwara Family Office and co-author Top Results: Maximizing the Value of Your Family Office as a Super Wealthy, “Because many of the wealthy are underserved, advisors who (1) have Discovery skills, (2) communicate well, and (3) speak clearly have a strong competitive advantage. For example, because the very rich are not supported, it is easy for them to win the business of the rich and the very rich, from other advisers.”
As for positioning financial technology as a low-cost service provider, that’s not always the case. “The goal is to deliver the best results,” says Fujiwara. “In order to deliver the best results, our family office solutions are always cost-effective. The price we offer is always higher by volume than what we charge our clients.”
Undoubtedly, artificial intelligence will help advisors to provide financial solutions. Technology – at all levels – will be useful and accessible to everyone. Therefore, technical expertise is, or will soon be, undifferentiated.
Inevitably, there will come a time when artificial intelligence will be able to perform Discovery and create powerful moral stories. But that won’t happen anytime soon. Currently, for consultants who are skilled at Discovery and building powerful stories, the current economy is not a competition, but then again, probably more than 90% of the consulting group is not a competition. If anything, ChatGPT and future AI innovations will enhance the success of advisors who can marry financial technology with the rich knowledge of their clients.
RUSS ALAN PRINCE and Executive Director of Private Wealth magazine (pw-mag.com) and Chief Content Officer of High-Net-Worth Genius (hnwgenius.com). He consults with family offices, wealthy, fast-paced businesses, and select professionals.
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