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David Lyon: Keep Calm and Don’t Fear the Robo Planner

Much like the short-lived paranoia over online investing 15 years ago, the robo-planner panic appears to be over as well. Financial services firms (and even some independent RIAs) are developing their own platforms to serve less affluent households.

But more importantly, they’re using new technology to provide better service and access to existing HNW clients.

David Lyon, founder of Main Street Advisor, a mass-affluent RIA launched earlier this year in Chicago, believes the same technology fueling the robo trend, can help entrepreneurial RIAs not only as they occasionally reach out to a younger, less affluent client – but as they manage their existing clients.

Saving time

“When you look at an advisor’s business, there are three ‘swimming lanes’: there’s the operational side, client management and business development,” says Lyon, who previously ran the traditional RIA firm, Main Street Financial. “Surveys show the majority of an advisor’s time (53%) is spent on client management, which ultimately gives a financial advisor a client capacity of just 78 clients.”

“We have to find ways to spend less time managing clients,” he explains. “We’re spending time calling to set up annual reviews, but only 46% of clients meet with a financial for annual reviews. That is a client experience deficiency. That’s something we need to fix.”

What’s the solution? Technology, of course.

That’s in part, why Lyon hired a software company to design Oranj, a technology platform that helps clients and prospects stay more connected to their advisor, creating time efficiencies and service enhancements.

Right from a financial advisor’s website, a client or prospect can create a profile, and begin using financial tools and set up meetings with the advisor.

“There’s a whole new category of software that didn’t exist a couple of years ago that can help advisors with challenges they’ve had in business for decades,” Lyon says. “We’ve seen a lot of interest in it.”

Lyon’s goal is to improve the client experience and free up more of an advisor’s time. “Clients and prospects kept telling us, they want a better experience. They want their account to be more accessible and convenient. And everything we’re developing is putting advisor at center.”

The next generation

Of course, Lyon also believes that RIAs who embrace technology platforms such as Oranj will have a leg up on winning the business of the next generation – and be able to serve them efficiently while they grow their net worth.

“Small business owners like the independent RIA can’t afford to take on clients that will lose money for 20 years,” he says. “Advisors spend 14 hours per year (per client) on client management. For a $100K account, you can’t spend 14 hours per year for 20 years hoping they inherit a bunch of money. We  need to find ways to spend four to five hours per year. We need to have a way to service smaller accounts without diminishing our personal relationship.”

Lyon believes the answer is to change smaller accounts a 50 basis point management fee, taking the same approach as with more affluent clients, but utilizing technology to streamline service delivery.

Online tools can help clients see the big picture of their finances. Lower-net worth clients can have easy access to their financial information and the ability to monitor their transactions with up-to-date data. Clients still have the ability to meet face-to-face, but they can also schedule appointments via Skype or phone.

“If we can be more accessible, convenient, and break down barriers, advisors can be more productive, efficient, and provide better service,” Lyon concludes.


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