The Formula for Success in Wealth Management

With South by Southwest nearly complete, many of us are thinking about the latest tech developments and the ways they may impact our lives. Technology is ever-evolving and continues to eliminate tasks both big and small. From turning off a light from your couch to automating your finances, the technological advancements seen in the past few years alone can be exhilarating. Of course, it’s easy to forget about the central role humans still play in complex processes – and that perhaps the best use of technology in the future is a marriage between advanced technology and human expertise.

This dynamic is especially true in how Americans save, invest, and manage their financial lives. As recently as a decade ago, when a family started accumulating wealth, they simply hired a financial advisor, typically at a legacy institution in their hometown, and worked with that individual to develop and execute a long-term plan. Now, thanks to technology, there are an overwhelming number of financial products built for casual and highly sophisticated investors alike, with as much or as little human involvement as needed.  

But with all of the choices and products, how do you decide what’s best for you?

We started Farther because we believe the best option is an approach that marries cutting-edge technology with human expertise and judgment.

One area where we lean on tech is to automate the transactional tasks that need to happen to keep your financial house in order. In wealth management for example, many administrative and operational tasks like account opening, money movement, and ongoing portfolio rebalancing are prime candidates for optimization and automation. Modernizing the execution of these tasks is beneficial for both advisors and their clients because it frees up time to focus on higher-value analysis and planning work. One recent survey showed that up to 80% of a traditional advisor’s time is spent on back-office, administrative tasks. Cutting that out means more time spent on what matters. In addition to more time for an advisor to spend on client work, digital processes create an easier, more seamless experience for client families, as well.

For higher-level work, such as managing concentrated positions and decision-making surrounding geopolitical events, there is simply no substitute for human expertise and judgment. Technology is not at a point where it can replace these core wealth management functions. A robo-advisor cannot, for example, guide a conversation about managing illiquid equity compensation, help a family balance current charitable donations with legacy planning, or advise on whether now is the right time to buy that vacation home you’ve always dreamed about. But enacting those decisions and transforming financial plans from static documents to dynamically executing transactions is where the tech side can shine.

There is also an element of trust that develops through a long-term relationship with an advisor. Trust not only reassures families that their money is safe and working toward their goals, but it also creates a backstop during moments of uncertainty. The strength of the relationship is crucial when the market experiences severe volatility, and mitigates the risk of portfolio-damaging knee-jerk reactions to current events. The advisor can talk through historical market trends, the latest market research, and relevant data points to keep those events in perspective before making any final decisions. And of course that’s easier to do when you have the world of financial data at your fingertips to manipulate and visualize.

At Farther, all clients receive the benefits of a trusted relationship with their advisor, while also enjoying the benefits of high-performing, beautifully-designed technology that provides a holistic picture of their overall financial well-being.

We look forward to more of the latest and greatest breakthroughs in technology at venues like SXSW, and we’re especially excited for those breakthroughs where technology and human expertise bring the best out of one another.