Regardless of their age, background or investment philosophy, advisors agree on one thing: Technology is changing the way they do business.

XAutoplay: On | OffAsk them about their client communication, back-office operations and workflow, and almost every advisor will start by marveling, “There have been so many advances in recent years,” as one planner recently put it. Tech tools enable them to allocate their time better so that they can concentrate on listening to clients and helping them address current financial challenges as well as plan for the future.

One of the biggest challenges that individuals face, especially those under age 40, is saving for retirement. The trends are troubling.


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For starters, parents of young children may focus on paying bills — and stashing away funds to cover their kids’ education — rather than contributing to their retirement account. That’s especially true if talented youngsters pursue a passion: Parents often fork over hefty sums for their gifted kids to participate in elite sports or music lessons, while neglecting their own financial goals.

Even childless couples struggle to save for retirement. Millennials — born in the 1980s and 1990s — often embrace entrepreneurial ventures. But self-employed go-getters tend to overlook retirement savings, only to find that they’ve missed out on a few extra decades of compounding on what could’ve been an initial, modest investment.


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Because they often lack predictable income or a traditional employer, entrepreneurs may not participate in company-sponsored retirement vehicles that encourage regular contributions. Startup culture and prudent retirement planning rarely go hand-in-hand.

Start Small

Advisors harness technology to drill home the importance of saving for retirement. They wow clients with fancy graphics showing the power of compound interest or run a Monte Carlo simulation that projects the statistical likelihood of various investment outcomes far into the future.

Yet such technology has its limits.

“In my 15 years in the industry, I’ve seen technology play a much larger role in retirement planning,” said Robert Finley, a Chicago-based certified financial planner. “But just because advisors have all this information that tech has given us, do we — and our clients — know what to do with all of it?”

For those who woefully underfund their retirement accounts — or bypass them entirely — mobile apps that encourage “micro-saving” are gaining steam. Examples include Acorns, Stash and Digit.

“It’s hard to realize what saving $50 or $100 a month would be worth in 20 years,” Finley said. But some digital tools can estimate the rising value of small chunks of savings over time, reinforcing the wisdom of setting aside even modest amounts every month.

Millennials with little or no retirement savings may figure that with minimal cash on hand, they can wait to engage in long-range financial planning. If they feel they aren’t ready to save for their golden years, they may assume they cannot afford to hire an advisor.

In fact, this young population might benefit from a financial expert’s input. Early in their careers, they may need to pay off student loans before they can shift their focus on saving for retirement — and an advisor can help them stick to a budget and pay down debt.

“You can find a fee-only advisor who can do a financial plan for a set amount,” Finley said. “That can set you on a really good path.”

More Client Control

Awareness of spending and saving patterns largely determines whether someone will stick with their financial plan. When individuals feel a sense of control over their money, they’re more apt to stay on track to meet retirement goals.

Advisors who crunch the numbers and establish clear milestones for accumulating wealth in retirement can make the process more real — and less theoretical — to clients just starting to build a nest egg. But the process really kicks into high gear when clients get more involved.

Clients who are thinking of paying $10,000 for a vacation might call their advisor and ask, “What happens if I spend that money on a big trip? Will it throw off my retirement plan?”

New tech platforms can enable clients to tweak the numbers on their own and gauge to what extent a lavish spending spree would affect their long-term savings, says Elijah Kovar, an advisor in Minneapolis, Minn. He says that tech-savvy millennials “crave this kind of tool” to self-manage their plan.

“Some young people give up if they have no idea where the finish line is,” Kovar added. “Technology is getting simpler every year and making retirement planning more accessible with a finish line so that people can see a plan in front of them all the time on their smartphone, not just when they meet with their advisor.”

Looking to the near future, Kovar expects more mobile apps to provide ongoing progress reports on a client’s retirement savings plan. Online features that track spending, pay bills and prod savers to adopt disciplined habits will become increasingly indispensable, he predicts.

“Imagine your client’s retirement plan on an app that says they have a 90% probability of success based on numbers that are clearly and simply explained,” Kovar said. “You’ll have a client who trusts those numbers and understands how the software calculates those numbers. That kind of technology is right around the corner.”

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