Day Two at T3: A Lack of Data Standards

Day Two at T3: A Lack of Data Standards

Day two of the Technology Tools for Today (T3) Enterprise conference in Chicago started off with a discussion over the lack of data standards in the advisor industry. Tuesday’s general session focused on technology integration and the challenges for broker/dealers to bring together the many disparate systems their advisors use on a daily basis.

“We’ve been talking about technology integration for the last 10 years,” said T3 publisher Joel Bruckenstein. “However, the custodians and broker/dealers refuse to cooperate. Until the industry gets an independent third party to govern this process, we will still be talking about technology integration for the next 10 years.”

Despite the lack of data standards, there has been quite a bit of innovation among the software vendors and broker/dealers to develop some compelling integrations among systems. A lot of that innovation has been focused on using cloud technology to bring systems together.

“The cloud has been an incredible way to remove barriers,” said Aaron Spradlin, vice president of information technology at United Planners, a fast growing hybrid RIA and broker/dealer. “Before the cloud, it would take millions of dollars that we would need to raise from venture capitalists to get a new system developed. Now we can stand up a system in the Amazon cloud for $400 a month and achieve the same thing.”

While many advisors remain somewhat dubious about putting their technology in the cloud, particularly for security reasons, technologists disagree. “With the incredible number of attacks by hackers and viruses floating around, advisors on their own don’t have the resources to watch for them or protect their own servers,” said Spradlin. “This needs to be done at the enterprise level. We deploy numerous layers of security to ensure data is protected and advisor systems are not breached.”

Another theme that played out in the morning’s sessions was what to do about social media in a highly regulated industry like financial services. Bill Winterberg, T3 co-producer and technology blogger at, offered insight into why broker/dealers need to provide access to social media for their advisors.

“Any financial advisory relationship is based on trust,” Winterberg said. “In the old days, this trust was developed by in-person meetings, hand shakes and small talk to find out if there was a fit. Now, that in-person interaction is being replaced by investors checking out their potential advisor online through LinkedIn profile reviews and content advisors have put on blogs, YouTube and Twitter. Broker/dealers need to provide a compliant framework for their advisors, otherwise, they will start to miss out on opportunities if they don’t appear on these social sites.”

Rounding out the afternoon’s sessions were again multiple breakouts where broker/dealer executives could check out the latest in software tools that will empower their advisors to be more productive.

Sheryl Rowling, CEO of Total Rebalance Expert (TRX), presented from her experience as a practicing RIA and CPA as to the many benefits of regular portfolio rebalancing. “Most advisors are not using automated rebalancing systems, but they absolutely should be,” said Rowling. “In my own practice we can be very strategic with tax loss harvesting by using TRX and be able to show to clients their tax savings when the markets move. In many cases we can add an additional 1 percent to 1.5 percent improvement in their performance.” Rowling illustrated the compelling “return on investment” or ROI from rebalancing software. “In our research with TRX users, they report a $500,000 efficiency benefit from time savings and new revenue opportunities.”

In the concluding session, Finance Logix CEO Oleg Tishkevich presented on “Widgetization,” an innovative approach to technology integration. By embedding graphical analytics or “widgets”, such as a retirement planning cash flow chart, directly into other applications, such as a CRM, advisors are able to model on one screen the impacts of certain decisions. For example, if a client calls up to withdraw $100,000 to buy a sports car, then the advisor can quickly engage with the client the impact of that withdrawal on their future retirement income. “We believe that Widgets are the answer to driving further technology integration,” said Tishkevich.

Once the formal program concluded, the race was on to dismantle the exhibit hall and sprint to the airport before the Chicago rains delayed or cancelled flights. While the many broker/dealer execs were headed home, the majority of the technology vendors were recalibrating their messaging and packing their bags for the next big milestone on the conference agenda: the three thousand technology hungry RIAs that will gather this weekend at Schwab IMPACT in Washington, D.C.

This is clearly a great time to be in the advisor technology industry.

To learn more about what went on during day two of T3 Enterprise, check out the many tweets using the hashtag #T3E13 on Twitter.

Timothy D. Welsh, CFP is president and founder of Nexus Strategy, LLC, a leading consulting firm to the wealth management industry, and can be reached at [email protected]or on Twitter @NexusStrategy.

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