7 Reasons VoIP is the Perfect Phone System for Financial Advisors

The financial services industry market in the U.S. is booming. Assets under management (AUM) are projected to hit $57.03 trillion in 2023 and show an annual growth rate (CAGR 2023-2027) of 9.12%, resulting in a market volume of $80.87 trillion by 2027.

However, with more growth comes stiffer competition. According to the U.S. Bureau of Labor Statistics (BLS), there were more than 330,300 financial advisors in the U.S. in 2021. By 2031, that number increases by 50,900. That represents a 15% rate of job growth. That is much higher than the average growth rate for all occupations at 7%.

As such, financial advisors need to find innovative, effective ways to increase their competitive advantage, while at the same time remaining agile and controlling costs. That is where a VoIP phone system enters the story.

Below, we highlight 7 reasons why VoIP is perfect for financial adviser phone systems:

1. Improve Client Retention

Research has found that financial advisors lose an average of 5-10% of clients per year. And what is the #1 reason why clients “fire” their financial advisors? Because they believe that their advisor failed to communicate with them in a continuous and timely manner. 

VoIP is the perfect phone system for financial advisors to connect with clients anytime, anywhere through a digital desk office phone and/or mobile device. Financial advisors can also utilize a roster of advanced calling features. These useful features include voicemail-to-email, live call transfer, and video conferencing for client meetings. That last feature is especially important to busy and digitally-native Millennials). Features like this help attract, retain and impress profitable clients — and keep them from heading to the competition.

What’s more, a VoIP phone system enables a smaller financial consultant to look like a larger financial institution through key features like Auto Attendant (essentially a customizable virtual receptionist). For example, clients who call in can be prompted to “Press 1 for financial planning services, Press 2 for portfolio management services, press 3 for brokerage firm services” and so on.

Financial advisors can also easily and affordably obtain phone numbers with area codes outside of their local market. Additionally, they can get toll-free numbers — expanding their footprint to reach a wider pool of potential clients seeking financial advice. 

2. Improve Billing Accuracy

In 2021, the Securities and Exchange Commission’s Division of Examinations issued a risk alert highlighting a range of issues with financial advisory fee calculations and client billings, and warning that overcharging would continue to be an enforcement focus for the agency.

A VoIP phone system features built-in and automatic call logging, which tracks every second of time spent on the phone with each client. This helps support accurate, appropriate billing practices — and no unwelcome surprises for clients. As noted by PerformanceMagazine.org: “an increase in billing accuracy commonly attracts an improvement in several other indicators such as net revenue from sales, cash to cash cycle time and re­newal contracts.”

3. Protect Margins and Increase Profitability

Earlier, we noted that the financial advisory market is booming — and getting bigger by the year. However, the surge in competition makes it difficult for advisors to protect shrinking margins.

“We have a number of walls moving in on us,” commented Mark Robertson, who runs a small registered investment advisor firm, in an interview with CNBC.com. “There’s fee compression, shrinking margins, and increasing competition.”

A VoIP phone system features a wealth of analytics data that helps financial advisors protect margins and increase profitability. For example, financial advisors can see if it’s ultimately more profitable to have a larger volume of shorter calls with clients vs. a smaller volume of longer calls with clients, whether it’s whether it is more effective to speak with clients early in the week vs. later in the week, and so on.

4. Ensure Business Continuity

During a local power outage, financial advisors cannot afford to have clients hear a “sorry, we cannot complete your call due to technical difficulties” message — because that strikes at the heart of trust and reliability. Financial advisors rely on these factors in order to continue playing a key role in their clients’ financial future.

A VoIP phone system continues to operate even in the event of a local power outage. This can be a relatively short brownout or longer blackout caused by severe weather, natural disaster, or other emergency.

5. Reduce Telecommunication Costs

A VoIP phone system operates at a substantially lower cost vs. a conventional landline phone system, with many financial advisors poised to save up to 50% or more each year. There are no major up-front capital expenditures, no domestic long-distance costs. Plus, the vendor handles all all ongoing technical support, upgrades, and innovations with no maintenance costs.

Also — and again, unlike a conventional landline phone system — monthly VoIP fees are fixed and predictable, which makes budgeting and forecasting easy and accurate.

6. Securely Send Faxes through the Cloud

According to Business.com, there are some industries that require hard copies of legal documents due to concerns about cybercrime and traditional practices. While some individuals are comfortable using electronic signatures, not all are recognized universally. Also, there are those who prefer to avoid any potential risks. A VoIP phone system supports cloud faxing (a.k.a. e-faxing). This lets financial advisors ensure documentation-related compliance while they reduce risks for both themselves and their clients.

7. Enforce Robust Enterprise-Grade Security

Information security is always a top priority for financial advisors. A hosted VoIP phone system delivers peace of mind as it runs on private and highly secure data networks, which are protected by end-to-end encryption mechanisms (e.g. Transport Layer Security/TLS and Secure RTP for transmitting media). 

To learn more about how our VoIP phone system will help your financial advisory firm reap all of these advantages — from enhancing interactions with clients to facilitating financial goals and more — call Carolina Digital Phone at (336) 544-4000 to schedule your free consultation and demo of our feature-rich, all-in-one VoIP phone system.