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Ron’s Musings

March 24, 2020


Ron FiskeI recently saw a presentation by Rich Cancro, the CEO of AdvisorEngine, which was titled “The Change Hypercycle.”  This presentation envisioned a dizzying array of changes that will confront the advisor community, without even remotely considering the staggering life alterations imposed by our ongoing pandemic.  I believe that many of the changes envisioned by Rich and others will potentially be driven to an even higher pace, with a specific focus on the greater employment of digital technology throughout all aspects of an advisor’s practice.  Some examples are:

  • Will there be a lingering effect or even fear of face to face meetings? Many people may feel that meetings like those with a financial advisor can more easily be conducted via digital technology.  Anyone who has attended a Zoom meeting can realize that you derive much of the benefit of looking at a computer screen versus traveling to an advisor’s office.  While this change may be largely demographically driven, it has the potential to greatly accelerate in the aftermath of our ongoing struggle with the Coronavirus.
  • In the aftermath of some of the worst losses ever experienced by many investors, there may be a much greater need for end client applications and analytics. Also, risk tolerances may need to be retested across the board, since many people will look at risk differently since they have experienced it directly.  There has been a sense that many advisors resist deploying significant end client technology for fear of losing control.  I would posit that end client technology will now become table stakes given everything that has happened.
  • Advisors who relied on sub scale technology to perform functions like rebalancing (e.g. Excel spreadsheets or other slow legacy processes) had these processes tested during the wild swings we have experienced. Many advisors will have to revisit how their entire office functions given the struggles that many have had just to keep up.  Workflows will need to be rethought and reworked from every perspective, with a focus on dematerialization if there will be a significant decrease in face to face meetings.

It was Eleanor Roosevelt who said, during her speech at the 1940 Democratic Convention, that “This is no ordinary time.”  The reverberations that we will experience from our ongoing pandemic may last for years, and has the potential to require radical change within advisor practices.