3 Common Digital Advice Pitfalls You Should Avoid


Like an investment, trying anything new in business carries an inherent level of risk. That rings true with adding a digital advice solution to your advisory business – an increasing need to remain relevant with evolving industry standards and client needs.

However, like an investment, you can mitigate many of those risks with proper due diligence. Before taking the plunge into digital-first investment offerings, be sure to avoid these three pitfalls.

1) Failure to Generate Buy-In

The quickest way to hinder the successful launch of digital advice, or any other electronic investment offering, is failure to communicate value to your clients.

With an army of pure robo advisors only a Google search away, your value proposition needs to be clear.

Start by being transparent about what your clients are paying for. While your hybrid platform likely features higher client costs than a pure robo, it comes with a few key differentiators.

  • The client receives access to your investment philosophy. What makes you different from the advisor down the street? You provide some sort of unique investment or service philosophy, which can be incorporated into the digital investment experience.
  • The client has access to you. One of the main values of a financial advisor is guidance – especially in times of market uncertainty. A digital advice solution that’s tied to an advisor can strike a balance between end-user autonomy and advisor guidance.
  • The client has more control. A pure robo seemingly provides the ultimate amount of end-user control, but that isn’t true. A hybrid robo solution gives clients more control over their investment portfolio and their investment experience by providing access to automation and advisor direction, on demand.

2) Losing Touch

Getting client buy-in is only part of the equation. In any digital advice solution, losing relevance is easy to do, as you aren’t actively involved in each client touch point. When relevance is lost, your perceived value is often lost with it.

The first step you can take to maintain relevance is simple. Branding. You may be directly involved in the digital investment experience – from investment philosophy to proactive monitoring – but that isn’t clear when clients see a third-party brand. Your value is easily disjointed. White-labeled technology connects your brand to the investment process.

While digital investment solutions are great for streamlining back office workload and client management, it’s important to find opportunities to maintain involvement and reinforce your value to the client.

3) An Unclear Strategy

Finally, failure to integrate your digital advice solution into a long-term service plan is a killer to the effectiveness of your offering.

Hybrid robo platforms help advisors do two things – serve clients in search of a more hands-on investment experience, and accommodate low-minimum investors that you couldn’t previously serve.

For the latter, a transition plan is needed to maintain a positive investment experience as they accumulate wealth, and in turn, additional investment needs.

View your digital offering as an opportunity to build and nurture a funnel of investors for stronger long-term growth in your business. Without a clear strategy, your funnel can develop kinks, where the investment experience no longer fits a client’s changing needs. A seamless transition strategy helps reduce those growing pains.

In Summary

I hope this article sheds light on one thing – winning is as simple as losing in digital. All you need is a vision of the value your service brings to clients, a clear strategy for communicating that value, and a plan for solidifying your relevance within that service.

We hope to help simplify digital advice for advisors with Portfolio Target – an advisor-led digital advice solution built to help advisors connect with a wider range of clients. Learn how to more easily tell your story and accommodate digital-first investors today.