The Evolution of Financial Advisory: A Look at the Impact of Fintech and CRM

Posted on 5th May 2023

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The financial advisory industry has undergone significant changes over the past decade, driven by the rise of technology and changing customer expectations. Clients are increasingly looking for personalized, data-driven financial advice that goes beyond generic recommendations.

Allied Market Research reports that in 2020, the global financial advisory services market had a value of $79.4 billion. Furthermore, they project that this market will reach $135.6 billion by 2030, representing a compound annual growth rate of 5.8% between 2021 and 2030.

At the same time, new digital tools and platforms have emerged, enabling financial advisors to manage client relationships better and deliver more customized services. In this article, we explore the impact of fintech and CRM on the financial advisory industry and what it means for advisors going forward.

Fintech in Financial Services

Financial technology, or fintech, has emerged as a disruptive force in the financial services business. From online lending platforms to robo-advisors, fintech start-ups have been changing the way financial services are delivered and consumed. One of the most significant advantages of fintech is the ability to use data to provide customized and focused financial advice.

For example, robo-advisors use algorithms and machine learning to analyse client data and make investment recommendations based on their risk tolerance, investment goals, and other factors.

Forbes has noted a potential risk associated with using robo-advisors: the possibility of a cyber-attack. Given that robo-advisors are online platforms that manage sensitive personal and financial information, this risk is always present. However, it’s worth noting that most reputable robo-advisors implement cutting-edge encryption and security measures to mitigate these risks and safeguard their client’s data.

The Role of CRM in Financial Advisory

Client relationship management (CRM) systems have long been a staple of the financial advisory industry. These software tools enable advisors to track client interactions, manage workflows, and streamline administrative tasks.

With the rise of fintech, the role of CRM for financial advisors has evolved beyond simply managing client data. CRM systems are now commonly integrated with other digital tools and platforms, such as Gorilla 5 by Bill Good Marketing, which offers not only CRM functionality but also financial planning and investment management capabilities.

Despite Gorilla 5’s ability to streamline workflows, financial advisors should note that there are many similar options available on the market, and each solution comes with its set of perks. Time should be taken to research and compare different software solutions before making a decision.

Fintech and CRM: Driving Growth

The combination of fintech and CRM has significant implications for financial advisors. By leveraging data and automation, advisors can deliver more targeted advice and increase efficiency.

In a blog post on VentureBeat, it was noted that contemporary businesses heavily rely on big data to gain insights and steer various aspects of their organizational objectives. It was also said that the quality of data has a direct influence on the quality of stakeholder decision-making.

Fintech and CRM tools are highly advantageous in enhancing client relationships, which, in turn, helps in obtaining better data and insights. With more accurate information and insights, advisors can offer more personalized advice and boost client satisfaction.

In addition, digital tools and platforms can make it easier for clients to access financial advice and services, such as through online portals or mobile apps. This can assist advisers in developing stronger customer connections and increasing client retention.

Challenges and Opportunities

While fintech and CRM offer significant benefits, there are also challenges and risks associated with these technologies. For example, there is a risk that advisors may become too reliant on automation and lose the personal touch that clients value. In addition, there is the challenge of keeping up with rapidly changing technology and staying competitive in a crowded marketplace.

However, there are also opportunities for advisors who embrace fintech and CRM. By leveraging these technologies to deliver more personalized services and enhance client relationships, advisors can differentiate themselves in the marketplace and attract new clients. Furthermore, there is the possibility of increasing efficiency and lowering expenses, which can lead to increased profitability.

Conclusion

In conclusion, the combination of fintech and CRM has transformed the financial advisory industry, providing new opportunities for advisors to deliver personalized, data-driven services and strengthen client relationships.

While there are potential risks associated with these technologies, the benefits outweigh the challenges for advisors who are willing to embrace innovation and adapt to changing client expectations.