Personal relationships are essential in banking. But what defines “personal”?
I recently read about a new Bank of America (BofA) innovation: video-teller ATMs. In a scene right out of The Jetsons, the “Teller Assist” will offer live video chatting with a teller located in one of the bank’s national call centers. What’s the benefit to being able to converse with a teller from your car? You will be able to complete a variety of transactions that traditional “unstaffed” ATMs cannot process. For example, the video teller ATMs will dispense a variety of currency denominations ($1, $5, $20 and $100), split a check you deposit between two accounts, and, in the future, allow you to make loan or credit card payments.
Bank of America bills Teller Assist as “next-generation banking that combines the technology and convenience of an ATM with the human touch of a teller.” Launched last month at several locations in Boston, BofA officials say the bank will continue to roll out ATMs with Teller Assist to additional U.S. cities throughout 2013. And they stress that tellers will still be available for customers who choose to walk into the bank to conduct their business in person.
The bank’s press release on the new ATMs stresses the benefits of a “human touch,” but, to me, the approach seems somewhat misguided. Yes, strong personal relationships are essential in banking. Yet, will a picture of a teller on a computer screen really inspire trust? If I share something personal, how will the teller at the call center respond? Most importantly, how could I trust any advice offered by a stranger who knows nothing about my background and priorities? For me, a talking head inside an ATM machine will bring little comfort or confidence.
If national banking trends are any indication, the American public agrees with me. Across the country, big banks are reporting declining market share and local banks are expanding. The “buy local” trend is alive and well with consumers who are looking for the financial industry to really personalize their services and put their advice in context. Consumers want a real connection rather than advanced technology.
In fact, in an increasingly technological world that puts infinite information at our fingertips and even allows us to turn off the house lights from the airport, it’s important to recognize technology’s limitations. In April, after a twitter account was hacked to spread a false report that the White House was the target of a terrorist attack, computerized trading caused the market to drop 145 points in just a few seconds, temporarily erasing more than $200 billion in market value. Then, when the tweet was discovered to be a horrible hoax, the market quickly bounced back. Clearly, none of that movement was guided by fundamental market analysis. These automated trading snafus serve as an important reminder of the essential role a trusted advisor plays–stressing reason over emotion to cultivate a more beneficial long-term portfolio view.
In fact, study after study continues to find that individuals who work with financial advisors are more confident about their prospects for a secure retirement. One recent study conducted by the Insured Retirement Institute (IRI) found that 48% of Boomers who work with a financial professional are very or extremely confident with their financial preparations for retirement, compared to only 28% of Boomers who manage their own finances.
Our clients’ financial confidence, not unlike the comfort consumers might feel walking into a bank where the teller knows their name, springs from our strong personal relationships. As a client, you know that our advice to help you achieve your goals–whether it’s funding college, launching a new business, establishing a charitable fund, or retiring–is based both on our expertise and our knowledge of both your financial and personal situations.
For instance, because we know you considering retiring next year, it makes consolidating your 401(k) and IRA accounts more imperative. Because we know how close you and your spouse were, we understand just how painful adjusting to a new reality without your spouse will be. When we caution you against filing your taxes early, it’s because we remember the corrected Form 1099 that arrived in the previous three years. Our advice on whether to convert your traditional IRA to a Roth IRA is informed by a complete picture of all your sources of retirement income. And, when we discuss saving for college, we know that you have four children as well as healthcare expenses for your parents.
Clients who ultimately choose to work with a fiduciary in a boutique RIA firm like ours understand the importance of working with a true partner in the financial planning and investment process. We’re honestly interested in learning more about you, answering all your questions, and providing you with advice that is always in your best interests. Big banks, it seems, just want to make it easier for you to make deposits into your account.