What Wealth Managers Can Learn From Waze

Anthony DeChellis is CEO of Boston Private, a leading provider of wealth management, trust, and commercial and private banking services.

The wealth management industry is evolving at a breakneck pace. Increased competition, the proliferation of technology and changing consumer preferences are propelling the industry to a new age. To try to predict what that new age of financial services will look like, I think we can look to a familiar tool: the Waze navigation app.

Waze has become a trusted resource to guide users to their destinations. It focuses on improving the route taken, adjusting for real-time conditions, all with a sleek, intuitive interface. It does not replace human judgment or decision-making, but it uses data to help take the guesswork out of the trip.

Navigation assistance is a metaphor for the wealth management industry, not as a reflection of the state of things currently, but as a template for where our industry should be going. There are many paths people may take to the same destination, but those paths can vary widely based on a person’s investment time horizon, risk tolerance and other factors impacting their personal balance sheet.

Like Waze, financial services firms must be equally focused on getting clients to their desired destinations and outcomes by delivering product-agnostic and high-value advice.

No client ever woke up in the morning and said, “I wish someone would sell me an investment product today.” Instead, they think about their goals, challenges and legacy; they hope and dream about specific outcomes for their businesses or family successes. That’s why a meaningful advisory relationship focuses on client goals without concern for corporate sales goals or commission incentives.

Waze’s objective is to get a driver from point A to B safely and quickly using the most efficient route possible. Imagine if, instead, the app prioritized its advertisers in every instance and took users out of their way to pass a sponsoring business rather than directly to their desired destination. That would defeat its purpose and undermine users’ trust; they would abandon the app quickly.

Of course, determining the quickest and most efficient route possible isn’t always as simple as it looks; there’s an enormous amount of data and computing power behind the app’s sleek interface. Peeking under the hood, the application crunches quantitative data (for example, weather conditions and speed) from millions of users on thousands of routes and combines it with qualitative data provided by users themselves (for example, police sightings, accidents and road closures). This is where financial services still has immense progress to make. Empowering advisors with the right tools and analytics will help them synthesize information and deliver insightful advice and guidance. But there are qualitative factors that algorithms can’t easily incorporate.

The aspirations of our clients go far beyond purely quantitative goals, and the most important tend to be qualitative ambitions, particularly those related to family, professional accomplishment and community. Take, for example, the issue of preparing the next generations — the children and grandchildren of clients — to become stewards of the family wealth. Transferring assets from one generation to the next in the most efficient manner possible is only half the battle. Preparing the next generation to effectively manage family businesses, trusts and foundations is far more complicated and challenging. It’s about dollars and cents, and it’s also about mission, vision and values. Managing that transition, especially across multiple generations and numerous family members, requires a thoughtful combination of quantitative and qualitative analysis supported by a trusted advisor who puts their clients’ best interests first.

Tech companies’ extraordinary user experiences raise the bar for all industries. The winning wealth managers will use learnings from tech leaders to deliver high-value advice empowered by technology that gets clients to their end goals with efficiency.

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