RIAs that have incorporated digital touchpoints when interacting with clients have also experienced greater organic growth compared with their peers, according to Charles Schwab’s 2020 RIA Benchmarking study.
Top-performing firms — those that rank in the top 20% of Schwab’s firm performance index — had the highest amount of digital adoption of tools like e-signature, virtual client meetings and screen sharing. Those top performing firms, too, had a higher net organic growth rate, meaning assets of new clients minus assets of departed clients, of 12.9% in 2019 compared with 7.6% in 2018.
“From a technology perspective, it’s interesting that the firms that are growing and have a lot of health in their model are also very likely to embrace a wide variety of digital touchpoints with their clients,” said Lisa Salvi, vice president of business consulting and education, Schwab Advisor Services. “That has positioned them exceedingly well throughout the pandemic.”
The study was based on a survey of 1,010 firms with a total $1.1 trillion in AUM conducted between January and April. Notably, 75% of the study’s respondents took the survey after March 1.
“The pandemic is definitely in the backdrop of the results,” Salvi said.
Digital signatures or e-signature and virtual client meetings were the most adopted technologies with 80% of top firms using the tools. Screen sharing or co-browsing with clients came in next at 75% followed by incorporating digital forms (70%), texting (40%) and using online meeting schedulers (30%).
Top performing firms are also more likely to document their firm’s ideal clientele, which helps them make better decisions about tech stacks and integration. In fact, 68% of top performing firms have a documented ideal client profile and 75% of top firms have documented client value propositions.
“A firm can know where to spend their dollars and where to reach target clientele,” Salvi said.
It’s also vital to understand how clients want to interact, according to Salvi. “Maybe your ideal client doesn’t want to come in for meetings but they want to communicate via text or they want to get on video chat and receive a quick snapshot of how their portfolio is performing rather than have an hour-long meeting.”
Moving forward, the intersection between technology and marketing will could become paramount in this environment, according to Salvi. As a result, the first thing advisers should do immediately is reevaluate their websites as digital communication with clients will likely be the norm for the long haul. “Your website is the new front door to your office,” Salvi said. “Make sure people can find your website from an SEO perspective.”
On top of that, advisers should take the time to master digital touchpoints like virtual meetings. “I spoke with an adviser that said they are still trying to figure out how to make a virtual meeting feel like everyone is in the same room, they are still trying to crack the code.”
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