financial advisor career

The Indispensable Advisor by Joe Duran

“The only way to get what you’re worth is to stand out, to exert emotional labor, to be seen as indispensable, and to produce interactions that organizations and people care deeply about.”

― Seth Godin, American author and entrepreneur, Linchpin: Are You Indispensable?

It’s not easy being a financial advisor these days.  Technological advances are chipping away at the traditional services that advisors have always relied upon to justify their fees.

Advisors should consider themselves lucky in comparison to how quickly other industries were overturned by automation and online self-service.

Thanks to rapid advances technology, consumers feel more knowledgeable, more powerful and are making more decisions for themselves than ever before.  They are relying less and less on human interactions when they purchase products and services and expect a customized experience every time.

These technology-driven trends have been pummeling the wealth management industry for a while now.  At the Invest 2017 conference held this month in New York City, a recurring theme was how advisors should leverage artificial intelligence (AI) to deliver more automated and more personalized wealth management services.  United Capital’s CEO, the seemingly indomitable Joe Duran (@DuranMoney), took up the mantle and provided his recommendation on how financial advisors should fight the digital wave: By becoming an indispensable part of their clients’ lives.

The Amazon-ing of America

Amazon has made geography and time irrelevant, Duran observed.  You can buy almost anything, anytime and have it shipped anywhere.  Usually in two days or less.  This has completely changed consumers’ expectations in almost every industry and wealth management is no exception.

Most advisors still work 9-5 hours and expect clients to come to their office twice a year for meetings. But most clients do not want to have that experience any longer, Duran proposed.  They want to interact with advisors remotely from wherever they happen to be anytime they want.

According to Duran, 35-40% of United Capital client meetings are held virtually.

Most advisors are hanging onto the belief that today’s clients still want to consume financial services the way they always have. But clients do not compartmentalize their experiences, Duran insisted. Their experience as consumers booking a trip on Expedia or aggregating data on raises their expectations for their financial advisor.

Consumers are adopting to new technologies at a rapidly increasing pace.  New apps seem to spring up almost overnight and take a chunk of market share from brick and mortar companies that cannot adapt fast enough.

But it’s what’s going on inside the software that is revolutionary.  Apps like Uber or Airbnb allow consumers to program their own experiences, on the fly, using their smartphones, Duran explained.  These apps communicate with sophisticated back end systems that allow these companies to provide an expanding array of highly customized services.

The ease at which consumers can program their own customized experiences is also making them far less loyal.  Advisors need to learn from this or risk being left behind, Duran warned.

The 800 lbs Gorilla

Business people sitting next to gorilla

Vanguard is the Amazon of the wealth management industry, Duran noted.  With over $65 billion in assets, Vanguard Personal Advisor Services seems unstoppable.  In fact, Duran previously explained that “the only thing holding Vanguard back right now is that they can’t hire financial planners fast enough to service all the clients coming their way. And where are all those clients coming from? Some of them were going to be your future clients. Some of them could be your existing ones.”

Vanguard and other robo-advisors are using technology & artificial intelligence (AI) to connect with clients anywhere at pricing 60-80% less than human advisors, Duran stressed.  (See 5 Ways Big Data Can Improve Risk Tolerance Questionnaires)

Duran suggested a number of ways that advisors can fight back:

  • Know their clients better than a Vanguard CFP sitting in a call center can;
  • Use systems to measure and track that their clients are making better decisions now than they were before;
  • Build portfolios that go beyond indexing;
  • Live in their client’s pocket and be available 24/7, in a caring way.

An Advisor’s Hidden Strengths

“He found something that he wanted, had always wanted and always would want — not to be admired, as he had feared; not to be loved, as he had made himself believe; but to be necessary to people, to be indispensable…’very few things matter and nothing matters very much.”

― F. Scott FitzgeraldThis Side of Paradise

Technology has been slowly creeping up the value chain and taking over tasks that formerly required humans to perform properly and effectively. However, Duran countered, humans have two important strengths over machines: empathy and judgment.  (See Wealthfront Revs Up With AI, But Is Still Running on Fumes)

Empathy is the ability to correctly interpret nuanced human answers and to understand human behavior. Judgment is the ability to come to sensible conclusions.

For advisors to be indispensable, Duran asserted, they need to provide the following:

  • Make 100% of their services available via mobile;
  • Change the value relationship that is deeply integrated to clients;
  • Gameify the client experience;
  • Empower clients to make decisions that help them make smarter choices.

This part of Duran’s presentation is a not-so-subtle pitch for his firm’s own turnkey asset management platform (TAMP), called FinLife Partners, which recently passed $3 billion in AUM.

United Capital’s FinLife platform allowed them a way to connect with firms it wasn’t interested in acquiring.  This could be a new channel for RIA aggregators to monetize their heavy investments in technology and behavioral finance-driven client experiences.

The first two FinLife Partners firms have already added more than $1 million in expected top-line revenue growth in just four months – and that’s by simply changing the way they currently charge their existing clients, according to United Capital. Firms have also transitioned clients into United Capital investment strategies for increased efficiency in their operating model.

What is the Purpose of this Money?

“The single most important place where humans play a role is where life & money intersect.”

— Joe Duran

The role of advisors has shifted significantly since the Financial Crisis, according to industry expert Michael Kitces. “Now for many advisors, the key abilities are technical competency to give the right advice, and empathy skills to form and deepen the client relationship. Sales and business development comes later, if at all.”

Duran stated that an advisor’s primary responsibility has changed from teacher to coach. To emphasize this, he recommended that advisors learn about what motivates their clients. All advisors should ask their clients this question: “Why do you go to work every day?” The purpose is to build a collaborative relationship with clients in order to better understand their life goals.

Automate, Automate, Automate

According to a recent study of advisor productivity from Envestnet, the median RIA with advanced technology integration has 78% more assets and the median IBD advisor has twice the assets of peers with little to no technology integration.

Advisors should be on the lookout for low value tasks that can be automated, Duran recommended. They should always be focusing on the highest value tasks, which he referred to as “practicing at the top of your license.”

The wealth management industry has moved beyond robo-advisors

The Indispensable Advisor

Amazon, Uber, Airbnb and hundreds of other companies and apps have forever altered investors’ expectations of how they should interact with their financial advisors.  Technology will play an outsized part in every advisor’s success, Duran insisted.  Making geography and time irrelevant will improve the client experience and help advisors to compete.

Some of an advisor’s strengths when competing against robo-advisors are the human feeling of empathy and human judgment, Duran proposed.  Knowing the underlying factors of your clients reason for working is critical to building stronger relationships with them.

“Money is like fuel,” Duran proclaimed.  Use it as the means to take you where you want to go rather than as an end in itself.  “Life is not about dying rich, but living rich.”



The Wealth Tech Today blog is published by Craig Iskowitz, founder and CEO of Ezra Group, a boutique consulting firm that caters to banks, broker-dealers, RIA’s, asset managers and the leading vendors in the surrounding #fintech space. He can be reached at