It's no secret that Mary Mack, president of Wells Fargo Advisors, believes the wealth management industry has much to learn from certain online retailers and their digital approach.
But implementing a technological strategy means choosing the right tools, and Mack stresses the firm is giving much thought and time to how it can maintain its advisors' value in the face of digital disruption.
For instance, technology can help make human advisors more efficient, but firms still need to address how they will recruit talent, she says. The firm's own studies show that while clients want digital tools, they still very much want a real advisor to guide them. Read on to hear how Mack and Wells Fargo are thinking about the changing wealth management landscape.
YOU HAVE DESCRIBED YOUR PHILOSOPHY REGARDING ADVICE AND NEW TECHNOLOGY. HOW HAS WELLS FARGO PUT THAT INTO PRACTICE?
We have begun a lot of our work by giving our advisors the digital tools that they need to be more collaborative with clients.
For instance, we just introduced an application ... that gives our financial advisors some real-time technology to monitor and rebalance client investment portfolios.
It was particularly helpful during the extreme volatility that we had in August and September. It gave real-time ability for our financial advisors to use that to work with clients intimately to think about portfolio construction.
HOW HAS YOUR FIRM'S PLAN FOR A ROBO ADVISOR DEVELOPED?
We're such a diverse financial organization with lots of ways to serve clients, and what we need to figure out is, does the solution exist today in a way that it gets integrated into Wells Fargo, or does it make sense for us to start outside and integrate? Or, do we think about how we build it in a fairly complex technology environment?
We're right in the middle of thinking through all those options.
I think it's a really important companion for the full-service business. So we're really interested in doing it right so it both supports and enhances the full-service business. I think Apple, Amazon, Uber and Fitbit have changed the way we think about technology interaction in every part of our lives, and I don't know why we think this would be any different.
To me, that doesn't displace a financial advisor at all. I think it makes the financial advisor even more relevant.
We've seen that on the bank side, with the [development of the] omnichannel experience; we actually see the relationship that our clients have with us grow because they have more ways to interact with us.
For me, it's a real companion.
TECH TOOLS FOR ADVISORS WILL MAKE THEM MORE EFFICIENT, BUT ALSO GIVE THE FIRM A GREATER ABILITY TO MONITOR AND MEASURE THEIR PERFORMANCE. WILL THEY BE UNNERVED BY THAT?
If we build these tools in a way that enables us to help advisors with more transparency to the issues that they may see and may not see, it not only fulfills our responsibility to supervise, but I think it also helps them with ideas around how to make sure you're adding the kind of value that we ought to be adding in full-service.
I think that's the trick of ensuring the full-services business is healthier through technology — if we can use it to ensure that we not only created value but can demonstrate that value more clearly to the client.
CAN WELLS USE TECHNOLOGY TO MANAGE POTENTIAL SHORTFALLS OF HUMAN ADVISORS IN THE FUTURE?
It is an additive to the business that we have today, and I do think that some clients will be served that way, but I don't think that in itself solves the fact that we have a real issue in the need to attract more advisors to the industry.
We released our Gallup study in June, and we asked a few questions. One was, what's important to you when getting advice? And 71% of investors said access to online and digital tools, but 70% of them said a relationship with a personal advisor.
So we said, out of those two, what is most important? Well, 56% said a personal advisor and 24% said state-of-the-art digital, but if you just give them one choice, a majority said a personal advisor.