by Tony Vidler
The nirvana for most professionals is to work only with high net worth clients. The challenge in doing so is that the affluent are inevitably becoming more difficult to get in front of personally.
As with the famous line from Jurassic Park – “life will find a way” – so too does technology find a way to get between the service provider and the consumer of those services. Nowhere in the market is this more apparent than with the affluent consumers who are high tech users generally.
Whether we see technology and associated software solutions as distractions, or interruptions, or alternative choices, is a moot point. The problem is that the affluent are almost invariably the greatest adopters of new technology and software solutions which deliver convenience at reasonable price points. The affluent are far more likely to have accounting software packages for instance, which they use to monitor and manage their own finances, and which in turn minimise the need for a significant amount of accounting or financial planning advice that the consumers would have “purchased” from a professional a decade ago. The affluent are far more likely to use technology platforms which they personally access for banking, lending, managed or mutual fund investments, and so on.
Technology finds a way to introduce convenience and control into the lives of the intelligent consumers. The affluent have a tendency to be intelligent and well educated of course, and typically have become affluent either because their education provided them with a high paying career path, or they have built and retained wealth through entrepreneurial endeavours. Either way, using technology for such people is not unfamiliar territory. In fact, such people are far more likely to have homes with systems installed which allow them to open and shut doors or curtains with an app controlled from their smartphone, or manage their home entertainment system remotely…and so on. They are technology adopters in other words, and we would be foolish to ignore that.
What this means for professionals is that the ideal clients we often describe – the affluent – are in fact the most susceptible to robo-advice or other technology-based solutions. They are the segment of society which would appear to be most likely to sidestep product intermediaries. A simple personal example should illustrate the point:
15 years ago I would typically pay something like $4,000 per year to my accountant to complete some bamboozling sales tax returns for my business, together with figuring out the final end of year tax return. In part I was paying for convenience, but in truth I was paying a lot of that fee because of the complexity of the goods & services tax returns at the time and the sheer amount of time that was involved. The process of compiling and then delivering the information to the accountant, who then started sorting it and figuring everything out took weeks (if not months sometimes) and multiple meetings and phone calls.
Now I use a software package which costs me something like $300 per year, and which is accessible from my smartphone, or tablet, or desktop, and which can be used by myself or any staff in real time. Oh, and doing a GST (sales tax) return now takes less than 10 minutes. No accountant is involved in that process any longer. Technology rules, huh?
For any professional who aspires to work predominantly with the affluent there are 3 strategic positions which must be adopted in the development of the practice, if the practice is to survive commercially.
For a professional practice positioned for the future to work with the affluent these 3 strategic positions are critical. The separation of advice or professional services from product, together with being a leading edge technology adopter, and a relentless focus on digging for data and then capturing and storing it (even if you don’t know what you’re going to do with it yet) are the keys to positioning the business to work with the affluent for the future.