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Executive Roundtable Journal

Technology, Staying Relevant and the Pace of Change

A conversation with Lynch, Hwang, Miller, Pinsker, Schwantz, Tishkevich and Volpe

Matt Lynch, managing partner of Strategy & Resources LLC, assembled the group and led the discussion. The conversation began with self-introductions and an overview of current business strategy at the participants’ firms. Marie Swift, managing editor of the Executive Roundtable Journal, sat in to listen. 
Matt began the conversation by talking about how Strategy & Resources views the evolution in the financial services industry through three lenses, dubbed “The 3 C-Drivers.” They are:

  • Consumer and Advisor Preference
  • Competitor Behavior 
  • Compliance and Regulatory Environment

MATT LYNCH: This is the third edition of the Executive Roundtable Journal. It is a joint effort between Strategy & Resources LLC and Informa’s Wealth Management team. Throughout every issue of the journal, we talk about “The 3 C-Drivers”—all of which have something to do with the major industry trends and can serve as a strategic lens for financial services executives and board members. 

Our focus today is on the impact of technology from multiple perspectives, including the fintech providers, the institutional buyer and the end-user (advisor or client). 

At Strategy & Resources, we provide consulting services to a broad range of financial services companies, including, but not limited to, broker/dealers, RIAs, custodians, fintech organizations, banks, insurance companies and asset management firms. One of the common reasons firms utilize our team is our deep knowledge of industry trends and, importantly, of the retail advisor and the retail market (client) and related to the tech discussion, how they access data and how they embrace tech-based tools and how they respond to certain products. Among important trends we’ve observed through our work recently is a set of common themes among buyers of technology who are looking to simultaneously simplify and improve the efficiency and utility of their operating platform and, by extension, the advisor and client-service experiences. We’ll ask today’s roundtable members to provide their thoughts on these trends in addition to, more broadly, the key issues facing the industry. 

Let’s start with introductions. 

Group Standing_20190620_R2S_2506.jpgRICHARD HWANG: I’m Richard Hwang with Ebix. I’ve been with the company for 21 years now. My responsibilities are, primarily, working with a lot of different enterprise customers that use all our products along with working with the product teams to really drive innovations, meet with everyone and take that back to our product team. From an Ebix standpoint, we are a NASDAQ trading company with about nine to 10,000 employees. We have about 50 offices globally. We range in products from financial services to nonfinancial services, which is kind of interesting and we can talk about that in a little bit. Our core business is financial services. We do things from e-application to quoting, CRM, illustrations and new business on the manufacturing side of carriers. We also work in the health, employee benefits and P&C areas. In addition, we have a consulting team that is primarily on e-application support through a company called Vertex that we acquired many years ago. We are actually an acquiring-type company. 

As a global leader in insurance and financial service platforms we have also been investing in a new “phygital” strategy that brings together over 300,000 physical distribution outlets in India and south east Asia onto our online digital platforms. This new channel is called EbixCash and offers money remittance, foreign exchanges, travel, prepaid and gift cards, utility payments and wealth management. We look to leverage this new channel in the future as a potential alternative distribution and have over 5,000 employees worldwide.

We are a traditional licensed and professional services kind of company. More and more, we are starting to see we can embed services through and try to create a different revenue channel of services rather than just licensing. The other one is alternative distribution. Some of us in fact have worked together to try and create alternative distribution for our product. In fact, two folks here today at the roundtable we actually work with on alternative distribution; not a lot of people know that and we kind of want to keep it that way. But we want to work with partners, with vendors, with other folks out there that are betting on technology.

20190620_R2S_2253.jpgOLEG TISHKEVICH: I’m Oleg. I was with Envestnet for about 3½ years after the sale of my company Finance Logix to Envestnet. Since February, at the T3 Advisor Conference, we came out with a new company called, and this is my new baby. It’s an exciting new venture. We’ve created a team of experts in wealth management, financial services, as well as technology development in the latest cloud native and put them together to kind of solve some of the complex problems in the industry. As we try to solve some of the integration problems within different systems, trying to get multiple systems working together, it’s always been a challenge. I always wish we could just snap our fingers and that would all just work perfectly. That’s the line of business we decided to go into, and as we embarked on that we realized that the technology itself we’ve been leveraging—cloud native—could make a tremendous impact on how we can build software for wealth management. So, our goals shifted. 

We decided to help firms, both financial services and vendors, to be able to build better technology, faster and much more scalable using this adaptation of the cloud native. We’ve created quite a few different tools that really help speed up the development and outcome of the product. So, things are way faster—like how we switched from taxis to Uber. It’s just right there. Same idea with this new technology. Broker/dealers are our primary market right now. We are close to 50 people now in terms of development. We are in seven countries, so we are very much a remote global team. We built the company based on a cloud native technology architecture, meaning completely distributed. 

MARTY MILLER: I’m Marty Miller, partner with Strategy & Resources. I’ve been a practice management coach the past 15 years. As you can imagine, when I’m working with the end-user client how often technology conversations are taking place these days. I’ve probably worked with 80 to 100 financial advisor firms in the past 15 years. Today there are a lot of opportunities that require somebody who can go deeper and help firms determine how they plan to utilize technology in support of a well-defined client service experience. It’s no longer enough just to select a CRM, for example, and simply embrace what’s provided through various affiliations they might have. It’s critical that firms establish a tech philosophy—a real plan regarding the level of investment, how they’ll leverage the tools, who will be responsible for implementation and support, etc. 

Ten years ago, it was a lot easier. Advisors sort of knew what they wanted; they just didn’t know how to get there. It was a lot of coaching and implementing. Today, in part because of the speed of innovation, sometimes they are not even sure where they are supposed to go and what that future even looks like. With our combined capabilities at S&R, we are able to bring more resources and more opportunities to help more people with those type of questions and others.  

MATT LYNCH: One of the things we will come back to in our discussion is a lot of these advisor practices are becoming more complex, larger businesses. They are complicated businesses, and they are making significant decisions about the future of their organization, which very often includes their tech stack and their industry partners. They are thinking about how those decisions support their client services experience and, ultimately, how to transition their business to the next generation. On the institutional side of our business, we’re working with a number of broker/dealers who are trying to winnow down the number of tech partners. The goal is to simplify and streamline, which interestingly is also the goal of advisory firms (the end-users of this technology).   

MARIE SWIFT: I’m Matt’s sidekick in this venture. Matt and I have a strategic partnership. Strategy & Resources also become a client of my firm some time ago, so we have a very wonderful and multifaceted relationship. I’ve known Marty for years and think highly of her work. My firm, Impact Communications, does marketing and PR exclusively in the financial services space. We only work with independent advisors and those who serve independent advisors. Prior to establishing my own firm 26 years ago, I was director of corporate communications for a top producer group in Orange County, California. I’m here today to make your experience smooth and easy.

JEFF SCHWANTZ: I’m Jeff Schwantz, head of enterprise sales at eMoney. I’ve been there for about 18 months now. I’ve been in the industry for about twenty-three years. eMoney has had tremendous growth since being acquired by Fidelity about four years ago. At the acquisition we were around 250 employees and just under fifty million in total revenue. We are over a thousand employees now. We have been hiring aggressively. We’ve more than doubled our revenue in the past four years. We are very focused on helping people talk about money. We want to help advisory firms think differently and focus more on the experience stack and less on the tech stack. We’ve all become accustomed to talking about the tech stack, but, at the same time, we think there will be an opportunity to be ruthless in the simplification of the experience and focusing on things that clients actually care about. For advisors, we are focused on helping them accelerate their growth and improving client satisfaction.

The work that we’ve done with Oleg, for example, is around integration from the perspective of the experience. For example, think about going to a Build-a-Bear Workshop or a cooking class. You get all the ingredients, but that doesn’t make you a chef. The stuffed animal you create at Build-A-Bear might not turn out as well as your child’s. But think of the experience; the provider can make you part of the process, helping and educating with it, too. You may even enjoy the experience more than the outcome. It’s all about the experience along the way. How can we educate people? That is what we at eMoney are focused on. 

Technology should be there to support our conversations. It shouldn’t always be the center of the attention. It’s the conversation, the facilitation of that and how we continue to make the experience more meaningful for the advisors and their clients. Those are a couple of our initiatives, but our biggest one is how do we leverage data in a different way and continue to automate things?

CHRISTOPHER VOLPE: I’m Chris Volpe and I’m the director of wealth management solutions for Informa Financial Intelligence. Informa is probably the sleepiest company that you’ve never heard of. We do everything from events to marketing services to content and data management. Financial Intelligence is the sector I work for. I manage the wealth and asset management products and solutions. Today we are looking very specifically at how do we help advisors differentiate themselves from their competitors and their peers. How do we better help them show their clients their value? How do advisors keep up without spending even more money on technology? How do they show their value to their customers? From asset allocation to model selection, how do they know that model is right, and how do they illustrate that to the end-client? 

20190620_R2S_2216.jpgWe’re focused on helping advisors demonstrate their value to the client, helping the client understand the model, helping advisors collaborate more with their clients. All the way to showing the value of performance through the portfolio and being able to slice that up a thousand different ways. Being relevant to clients of the future will require different thinking and better technology. For example, we suspect millennials—while they are more comfortable with technology and AI—are still unlikely to throw a bunch of inherited money into a robo advisor. They are going to need and want help doing that, help from advisors; but they are going to want that on their terms. They are going to want to be collaborative, and they are going to want more than just investing help. They are going to want help on managing their money throughout their life versus simply investing today. And so, we at Informa think how do we help advisors better understand all this and then use that to help build a better relationship with their clients?

MICHAEL PINSKER: I’m Michael Pinsker, the chairman and founder of Docupace Technologies. We are a premier digital operations provider for wealth management firms. From a history standpoint, I started the company 17 years ago. I wanted to build a work platform and data management that is fast, easy-to-use and cost-effective. It started right off being a web-based platform. We tested the market and found advisors really liked that. As we looked at that time, we realized as a business we had to stay focused, we had to be very verticalized, focused on wealth management and the financial services industry. Through that, we added the compliance aspect to our platform so that we are now a third-party download provider, one of the largest ones in the US today. Today we service thirteen out of twenty top broker/dealers in the country. We service over 78,000 advisors who use our platform, we have over 134,000 users. 


LYNCH: Around this table today, there’s a wealth of experience working with RIAs and broker/dealers. I greatly appreciate all of you taking the time to share your insights and to participate in the roundtable discussion today. 

Let’s start by talking about “The 3 C-Drivers” and how they inform business decisions.

The 3 C-Drivers are:

  1. Consumer and Advisor Preference
  2. Competitor Behavior
  3. Compliance and Regulatory Environment 

Taken together, how do they inform where we should develop product or modify our approach or change the onboarding process? That is obviously critical. In terms of the competitive environment, the pace of change is accelerating—I can tell you that just based upon a number of years being involved as one of the judges for the Industry Awards, where we scrutinize 600 or 700 nominations coming in and terminology that didn’t exist four years ago—like “cloud native.” Now, we are seeing that cloud native might be a technology disrupter. 

So, given the pace of change, executives we work with are trying to balance the risk/reward decision related to tech upgrades, recognizing the solutions they choose may be short-lived in terms of being best of breed. Their question to us is: 

Where do we allocate capital? As an executive or board member, they are making significant bets on how they think the industry is going to evolve and the behavior of the end-user or the client in terms of preferences. It’s a high-risk business to be in if you are a provider of services and you have to get that right. I’d like to talk about your businesses a bit in terms of how you think about and inform your strategy when it comes to making those long-term bets on product or service changes.

The reality is that many major tech-related initiatives fail to achieve the targeted results due to lower-than-expected end-user adoption. How can/do leading fintech firms help clients address that challenge?

20190620_R2S_2464.jpgSo, starting with the end-user and building the implementation plan and even having that informed development of your products is so critical. We work with a lot of organizations, broker/dealers and others, where we are implementing this new technology and we are starting with the back office or maybe even middle office. We always ask the question, what is the input from the folks that are actually going to use it? It’s interesting to see how many firms move forward on purchasing decisions without first consulting the end-user; usually that’s a mistake.  

In addition, there are often some hurdles to get through as the companies are thinking whether or not this is an investment that is going to help grow business or rather is this some sort of incremental or meaningful change. What comes up in these discussions with procurement folks and others is what is the expected implementation time frame? What is the return rate on our capital? What is the expected adoption rate? I want to get your thoughts on end-user adoption, particularly, if that is a measure of success from the standpoint of the customers. How do you think about that as you are developing your product or marketing or other aspects of your businesses?

VOLPE: Adoption is fundamentally the function of how well you solve the problem. If you are solving the problem, they [the customer or end-user] may not want to move or may not want to change, but they will change anyway because it’s that pain point that you are solving. When we look at it, we try to identify as early as possible what that biggest pain is. If we can address that and continue down the path—just like a doctor – and assess the pain level on a scale of 0–10, then we can get somewhere. If we are in the 2–4 range, we might not pursue that as an option because realistically it’s not going to be enough to move that needle or create adoption. So, in the end, pain creates the value. Looking at what can we sell for, we ask how much pain relief is that?  

PINSKER: I agree with that and add that we also look for the pain the advisor is experiencing—and that may be different for an RIA versus the back office. In several cases, the “pain in the back” office is so large that it just becomes the way that they do business, and this starts forming our environment, and how we operate and cater to them. They ask things like are you going to work on that for us as a firm because that is transformational. I’ve seen that work successfully, but, in some cases, people were reluctant still. 

To the advisor, at the end of the day, what you really want to focus on is what they do best and that is build a relationship with the client. If you can make it easy for them, it removes the obstacle of the change management, which is a huge obstacle for all of us as change is always hard. If you are able to make it easy for them, add the benefits of the back office as well as the overall organization and advisor as well as their assistants—as they are the ones that are actually doing the work—that’s our approach, is really looking at the experience, the persona of who is involved in the whole process and gear it to each person and pain point.

SCHWANTZ: So, one of the things that we are focused on at eMoney is how do we become more comfortable not having perfect answers when we engage with our clients or perspective clients? How do we use that information as part of that experience to say this is what we know about you and this is how we think you would be successful in achieving your goals and things that you’ve said are most important? This information is less than perfect; still, it informs a conversation and actually engages a client to understand and share as they grow more comfortable with a prospective advisor. 

Imperfect data can also help when it comes to deepening a relationship or engaging the other generation. That is really back to that change management aspect. How can we focus on using what we have today to really help guide advisors? They are so focused gathering all the perfect data from the client versus saying this is what we know about you today so let’s start this conversation differently. 


HWANG: Jeff, that’s a great point, particularly where firms are focused on customizing or building the end-solution. Sometimes though we find that even if we put the right ingredients out there, there is still the adoption issue. Sometimes that’s due to the end-user or an intermediary supporting the end-user not wanting to put the final pieces of the solution together. So, what if we tried to prepackage a little bit better and provide something more like a Betty Crocker cake mix? 

Beyond that, we have to ask wouldn’t it be better if we just bake the cake for you? Should we just sell it to you ready to enjoy? Even if we make it a really beautiful and easy experience, most end-users still probably won’t do it. So, maybe we should just do it for you. 

I think one of the challenges we have right now is the customer doesn’t know what it should taste like. They are not a culinary expert. They don’t have a concept in their head of what the flavors and textures should be. 

That is actually where the AI and robotics come in. Everyone has a different respect for what AI is and how they think of it, but we all roll around with this issue. We also have to consider if we need to create a separate version for the staff versus the advisor.

If the advisor could give us these answers, we could build very quickly; but they can’t and that’s the difficulty we have. For us, adoption goes back to can we pick and choose areas that we think we will do it for you and leave other tool sets to people that are culinary experts that want to build, that want to have their own experience and are more sophisticated. About 80% are like give me McDonald’s, give me pizza, give me that Shake Shack—drive that cost down, provide good quality and that’s all I need. 

20190620_R2S_2492.jpgTISHKEVICH: Here’s another metaphor: We have a huge number of people at dinner and everybody wants to have a very unique experience with their food, right? The options might range from à la carte selections to a prix fixe menu where the whole thing is right there decided for you—but then again you might not like some of the elements in the prix fixe. 
In the industry we see a lot of firms really focus on what they do well; they try to create that experience as if somebody really likes the prix fixe menu and they do it really well for those that are all about the prix fixe menu. The challenge that we see advisors face is everybody wants to have a unique value proposition for their clients. We all talk about a unique experience, but how do you create it with the prix fixe menu scenario? 

The reality is that to achieve something more uniquely their own, advisors might have to use 10–12 different recipes or meals, if you will—things they will have to mix up to create their own unique experience for their clients. The providers of that technology and that software, well, they are simply not seeing that because they are so focused on what they do. You can’t do everything. 

We often bring out experts who meet with the advisors and do sessions. The experts will ask: What are your pain points? What are things that you wish you could do better? Oftentimes we get very interesting outcomes from these sessions; however, more often, it’s what they don’t say or think possible that makes the difference—if we can deliver on what they don’t really articulate and reduce the pain point, that’s the goal. 

The approach we take is definitely listening to the advisors. Understanding the technology that is out there. Understanding some of the needs. I see the industry with the advancement of technology and all the different pressures on advisors and firms in terms of margins; there are some interesting dynamics that are happening. 

How do you create this unique value proposition with personalization and unique solutioning for the firms? We are moving from all-in-one (which is, essentially, let’s make everybody do this) to now where every firm is trying to create something on their own. There is a lot of outsourcing going on in every area, whether it’s product or technology, that allows advisors to create that personalized experience through some type of optimization. 

Change management is a skill set; it requires careful planning to create a positive outcome. Most end-users cannot manage change themselves. Many major firms serving the end-user lack that capability as well.  

LYNCH: Great point, Oleg, particularly around the movement from bundled, all-in-one solutions, to supporting bespoke preferences. I want to come back to the recipe ingredients for a minute. If we were starting up a new firm, how would we build this? We would be wise to start by determining who is the end-client and what support does the advisor need in order to deliver that consistent and well-defined planned experience? You would build your business around blocks of that strategy and then you would make initial decisions about a combination of tools that are going to work together well and, perhaps, multiple industry partners to deliver. For most executives, they’re not in startup mode; the decisions they are making are complicated by the legacy systems or processes they’ve inherited.  

Typically, we’re all working with firms contemplating replacing something they’re already using, but not everything they use, so what we are normally dealing with is more like the television show Chopped, where you are handed a basketful of odd ingredients and you think how am I going to make the ingredients that are in that basket work as a good meal. And, even more challenging, is to make something out of that which meets somebody’s needs around that table and to deliver the experience that they want. 

What I’ve seen from some of the fintech firms and others in terms of product development, of course none at this table, is product decisions or marketing decisions that appear to have been made on the assumption that they are the only tool the end-user is going to consider and thus they can design independent of whatever else is in the basket. There is often a failure to consider that the tool or ingredient has to work and integrate with everything else—with what is already in use, or in the basket.

I would tell you with our experience, particularly in the practice management area, if we go into a firm and expect that end-user (typically the paraplanner or sales assistant, the person actually doing the work), to change two things that they are doing or replace two or three tools that they are using, then the initiative is usually dead on arrival. I’m curious to see how you think about that with respect to the competitive landscape, the end-user’s preference and experience and how you think about the other industry partners that might already be working with the client that informs your product development or your marketing or your implementation efforts. 

MILLER: I’m facing the adoption issue daily with the work that I do. One of the biggest challenges—and while it’s starting to get slightly better it is not nearly at the rate it needs to at the advisor level—is who they hire. Nobody is hiring any “chefs”—there are no chefs to work that basket of ingredients. If I work with a team of 20 advisors, there are maybe five advisors and 15 staff and if one of them has anywhere near that early-adopter kind of a mindset to dig in and help that firm utilize their technology, I’d be surprised. 

In a firm where there is at least one person who can grasp the technology and understand the vision of why they have that technology, the progress will be infinitely faster. Most firms don’t have one person like that. The advisors keep hiring over and over the people that are not really interested in that. The only reason this is starting to get slightly better now is because we are starting to get bigger firms now. There is some point on the scale where they are willing to create a budget to hire somebody to focus their time and effort on the technology as opposed to simply how do I get prepared for meetings? That’s one of the biggest challenges of adoption: There is not the skill set. There is nobody there to take that basket and make something; in most cases, there is no chef.

PINSKER: Marty, that is a great point. We’ve found that there is a certain point at which the firm would actually have the capacity and resources and capabilities. They would be able and would want that à la carte option. They want to be able to take whatever they have in the basket, fill the wide space and build something that is right for them. Then, you have others who are smaller and who are not as resource rich who don’t want to be different. They want something where basically they turn the switch on and use it. Whether it is a service or a technology, it just needs to work for them. They don’t want to think about it. They just want to focus on their core business. So, I think we want to have both options. You want to have an à la carte option, and you want to have a prix fixe menu. Depending on who you are working with, depending on their resources, there should be a fit one way or another.


VOLPE: That is a good point: Do you make it for them? I think the issue is how do you make it for them and still cater to their individual dining needs? One of the things we face is we have a substantial client services staff that actually works with advisors not just to help them understand the analytics but also to create the analytics to help their customers. Some of them will just say, great. Some of them will jump in and say, I want to do this by myself and a lot will say, just create that same report for me—I just want to get that same report over and over and over again. So, they are never really driving; but, in my view, if you create the meal for them, they eventually get sick of it. Then their clients change, as do the competitive pressures. It’s a challenge. How do you create that, so you don’t just get an average adoption tool but get them interested in the tool in terms of how it can help their business as well? 

PINSKER: Chris, to add to your question as to how do you balance that: One of the things we did at Docupace is we have a service, a technology-enabled service called Transition Assistant. It’s where we are actually able to help an advisor transition from one firm to another, to move their group of businesses into the new firm. This is an example of where we use technology, where we provide service, where we literally work with the advisor to hand-hold them with white-glove service. This is just a sliver. Can we do much more? Possibly, but for us that is the need of the advisors in those stressful times when they transition. Even though we are a technology company, we actually provide a service to help them reach that point. On the other hand, from a technology standpoint, we can just give pieces and whether they are a broker/dealer or an RIA, they can move things together based on their needs. 

--20190620_R2S_2307.jpgHWANG: The technology companies are often looked at as experts in how a practice should be run. I don’t necessarily think that is true. We end up building really good tools and we try to learn from the industry. I think we do fail a lot of times more than we are successful at anticipating how a firm is evolving. When we work with consultants, they help us the most in terms of seeing that we have a great tool but that we may not be totally using it correctly and/or that there are so many more applications we can apply it towards. I think that’s where we fail.

Probably everyone here has a PowerPoint with a Venn diagram of circles with their name in the middle and all these other circles swirling around their products. But when we walk into firms is the cold reality that we are actually a small piece of their pie? We have to think about how the advisor thinks about the whole pie.  

SCHWANTZ: I’m going back to Richard’s point of the do-it-for-me kind of thing. That is where we at eMoney have started to evolve as well. When I joined the firm 18 months ago, I started something we call the Success Coaches, which means that when we first onboard an advisory firm, we schedule three meetings over 90 days to make sure they are getting acclimated and understanding the navigation. Are they turning on the integrations? Are they understanding which integrations are most important to them and getting the most out of the application? In those first three calls, I asked, what are we spending our time on? No. 1 is getting the data into the application. No. 2 is turning on the integrations and understanding the nuances that exist. So, I sat there and looked at it and thought, wow there has to be a better way. 

This is how we started to work with firms like Oleg’s to say if this is the kind of transformation we want, how do we get the data in, to do it for them? We say, OK, here is what we know is already important to you. Day one when they open the application, their data is already there. The integrations that they told us were important are already turned on and enabled. We walk through that as part of the onboarding process. So then when our Success Coaches are spending time, we are now on the practice management side to get the most out of the advisor’s return on investment. 

For us, we had to think differently. We started with our own adoption and thought we need to make this significantly easier, to do it for you, and then we get back to this is how you are going to get the most out of your investment. So, for six years we’ve done a return-on-investment study of our existing users. What’s going on? The one we just completed in April includes about 500 of our most recent users and we always try to get to them within the first year. How is it going? We look at it from three perspectives. We looked at it from a business development standpoint, where have their assets grown, but also how is efficiency and client satisfaction. All those things we think are important in building a practice. About 88% of the advisors said they were able to grow their assets significantly since adopting the e-Money platform. Forty-seven percent said they grew their assets by more than 25%. We had another 22% that said they grew their assets by more than 50%. So that is significant.  

The other part that we’ve been shifting our thinking to is we were allowing the advisors to control the end experience. That’s what’s been able to really drive the end-client adoption. We continued to explore the data, and we found that advisors who were more fully using the tool, impacting the end-client experience, had more satisfied clients. Armed with that data, we are then able to go back to advisors and help them understand the linkage between fully utilizing the tools and increased client satisfaction. So, that’s where we’ve really started to see the lift. The change is that we thought about our own process differently.


TISHKEVICH: There is a saying, “Patience is a virtue.” Why? Because not all of us have that virtue. If you look outside of our vertical, outside of the financial services, and look at some of the successful companies that really drove their business through the roof and have tremendous success—Google, Uber, Tesla, Yelp, Amazon—If you had to look at all these companies, what actually unites them? What kind of feature set unites them? What do they do that’s exactly the same? They simplify the experience. It used to take me two weeks to get something in the mail and now Amazon delivers it the next day. 

VOLPE: To your point, they also changed the fundamental dynamic of something. 

20190620_R2S_2305.jpgTISHKEVICH: Same thing with Amazon or Uber, right? You get to the service in a very simple and very expeditious way. At the end of the day, we don’t have the virtue to have the patience. We want things now and whether that is in an advisor or a client, I want to be able to scan my eye, click on my phone and open an account. That is the experience of how we are going to get there, hopefully anytime before we get to Mars, but that’s what people want. People want speed, simplicity. As a business, if you are able to deliver or iterate or make that differentiation, that’s what is going to drive the success. What we are focusing on with our solutions at my firm is how we help coordinate a lot of different systems so we deliver speed and simplicity across multiple suns in our universe.

MILLER: I agree, simple is the most perfect form of anything, and one of my favorite sayings is, “Getting to simple takes a lot of work.” That’s one of the biggest challenges in the adoption level is the time that is allocated by any firm to get to that simple state and how they are using their technology. The timing and allocating—that’s really the best we can do. If you create simplicity in a way that Uber created simplicity, the adoption rate would immediately go up.

HWANG: One of the things we started to do, primarily for adoption, that really drove the R&D is to ask the question, “What don’t you want to do?” People have a very strong opinion on what they don’t want. It’s very difficult to pull out of them what they do want. We keep asking the questions, “Tell me about your practice. Tell me what you don’t want to do.” Because they don’t have a workflow. They can’t tell you how things really work, but they will complain. That’s actually a great road map; it tells us where we should focus our attention because that’s the pain they feel. 

A lot of times, they are saying, “I don’t want to do all this paperwork. I don’t want to do this, or I don’t want to do that. I don’t want to tell you what I did in that meeting, I just want you to know. OK, well I need to figure out a way to do that.” One of the challenges that they have is they don’t want to do something because that means they can’t do something else. Our R&D really does focus on what they really don’t want to do anymore versus what they do want to do. 

PINSKER: I want to come back to The 3 C-Drivers because that really resonates with us whether it’s knowing your client, gaining on the competition, compliance or regulatory changes. The way we think about what’s going on right now is we are almost looking for a perfect storm to some degree. There are regulatory changes happening. Then you have consumer changes, which is ultimately the investor. People are so used to things being quick and readily available that it is driving the behavior of the advisors. Then you have the overall business transformation due to technology. It’s not the same as it was 10 years ago for practice management. Advisors have to adapt. 

For example, when we offer cyberservices to our clients, because they have that need, we move toward changes in the user experience where we can get things done faster and that’s what I mentioned earlier about the digital experience—what used to be the norm, where somebody used to have a paper or form, it’s not necessary anymore. People want the data now and to be able to quickly enter it, forget about it and move on about their day. So, really an Uber-like experience is expected now. Having that kind of adjustment is critical.

LYNCH: So, you have this view of the end-user, compliance, regulatory and all these different issues. Presumably every company that represented at the table has access to all the same data. You are able to look at industry trends, and yet companies make very different bets based upon the same set of data. They believe that maybe they can leapfrog over what’s going to happen in the short term and/or be a disrupter. I think about Carvana versus the autonomous cars versus Uber. Carvana is trying to reinvent the experience of buying a car by providing, basically, a car vending machine. Whereas Uber is saying cars are not going to be needed, so if people aren’t going to need a car, then a better way to buy a car isn’t relevant because they still won’t buy a car. But both Uber and Carvana are investing with access to similar industry data trends. They are sitting around the boardroom or with their capital partners saying this is what we think is going to happen, this is going to work.

I bring that up because I think the end-user is confused. So, is the professional buyer, the institutional buyer that has infrastructure, procurement and deep pockets also confused by the same data that you are looking at? They are thinking, How do I remain relevant to the end-user? How do I remain relevant to the retail advisor?

So, I’m wondering how you here at this roundtable are thinking about that in terms of going to market? 

VOLPE: I don’t think we look at it as if there is one end-client. For instance, I’m not going to get in an automated car. I’m always going to drive until I can’t drive anymore physically. That will change with the next generation. I don’t think there will ever be people who don’t want to buy a car. So, making a car-buying experience easy and focusing on that marketing makes sense to me. I think it becomes a set above that where can you or should you focus on a segment, but can you even afford to focus on a single segment? 

Traditionally, we have focused on the high-net-worth and ultra-high-net-worth advisors. They are willing to pay more to get a better experience for their customer. There is a huge opportunity there. So, when I look at what are we going to make our bet on, it’s really about looking at the market segment that I want to serve and attract. So, it narrows it down quite a bit for me. 

I think there is a little bit of a guessing game going on but also looking at how things are changing and how people think differently about new product. People think very differently about money today than they did even five years ago. They will think about it even more differently a year from now. 

LYNCH: It’s out of a necessity. You will see that across the industry; firms that are narrowly focused tend to understand their client better versus trying to build something for every type of user. 


20190620_R2S_2290.jpgSCHWANTZ: So, let’s go back to the consumer. We have been doing this for a year where we sit down with firms and ask: “What does your average client look like today?” Some know it and some don’t. For some, that is a very uncomfortable but simple question. In almost every firm that we work with, 70% of their clients are 55 and older. We ask them, “Do you understand the needs your clients are going to have in the next five to seven to 10 years and how are you anticipating those?” Very few have a confident answer. Some will say, “These are really painful questions, Jeff.” So, this is back to the anticipation. 

There is not as much anticipation in the understanding. So, for us, we’ve already made several of our bets with part of that in bringing others along. You need to anticipate things your consumers are actually going to ask you for and, by the way, if you don’t have really good answers, there is not a good probability that you are going to keep those clients. Back to the consumers and what people are looking for: Some firms have a really good view. We sit down with some firms and the conversation goes like this: “90% of our clients right now are already in the distribution phase of their life.” “Great! Do you think you are actually set up to succeed and help them achieve those elements?” “No, that’s why you are here.” 

We always ask them two simple questions to understand the needs. (1) What’s the real problem we are here to solve? Then, we work backward, because that’s what’s missing. For instance, “I’ve been focused on my tech stack; I haven’t been focused on my experience stack. I’ve been trying to figure how to differentiate. I get caught in all these swirls versus these are a couple of things I need to anticipate.” That’s where the Super OSJs and other intermediaries come in; they are helping surface the needs that people haven’t thought of, which is why they are attracting reps from the wirehouses who look at things and say: “I’ve been kind of hamstrung and not necessarily anticipated the needs that we and my clients need and I need that freedom and I’m going to go to other people that are like-minded that really understand that.” 

LYNCH: There is an economic shift that is happening; we are finding the end-user advisor embracing these additional intermediaries and supply chain by saying, “Look, I’m not unwilling to pay for that support. It’s clear to me that in order for me to grow I have to stop doing that and make sure things are still done in an excellent way so my client experience isn’t negatively impacted, but, I can give up some of the ownership and control of these functions in order to focus on developing the new business.”

So, when you have what we call G2—the next generation—thinking about taking over the firm and the founders have been hesitant to make some of these changes, the next generation coming in, in our experience, is much more open to outsourcing to get some of the things off their plate, making it simple. They’ve watched, sometimes it may be their parents, run these firms and failed at some of these decisions multiple times, and it’s frustrating to them. They grew up in an environment where it was simple; they just put in the earpods or they just pick up their phone. This transition from the 60-year-old founder/advisor/owner running these firms to the next generation wanting to see opportunity such that they are willing to invest their time, energy and capital to stay in the firm is interesting. 

G2 wants to reduce distractions. Some of that is around technology and tools and simplifying the buying experience. I think that’s part of the role that they do expect the tech firms to actually come in with and provide some guidance and consulting. It occurs to me in your businesses your ability to be impactful and get a client that stays with you for a dozen or more years requires a different type of process and more intimate level of engagement. 

PINSKER: So, what we’ve found over the years is it’s the intimate relationship with the firms. They don’t want many vendors. Firms want fewer but truly deep partnerships. Because of that, it’s the expectation we really know our clients, what their needs are, and can work in a consultative approach—what we call solution selling. But, it’s truly a partnership to see what kind of help you can provide them. In some cases, it can be as simple as referring them to somebody else if, for instance, you don’t specialize in that. In the older days, we were talking about integration and everybody doing integration for the sake of integration. That’s not the case anymore. It’s because we want that intimate relationship with our clients so the integration partners that we work with have a very specific purpose. That is how it adds value.

MILLER: I see that so much. They want to have fewer vendors and a great relationship, but they don’t know how to date first. Most of us are not going to have a good long-term relationship if we don’t know how to date first. That’s the phase where there is so much confusion. Which products? Are these the right fits? The interesting increasing of investment of technology. In our consulting work, we actually see a lot of fear. “I want to invest in technology. I want us to make better results. I want to make us more efficient, but I’m terrified that technology is going to decrease what is perceived as a high touch per client.” 

Younger people really know that technology does not interfere with the quality of the relationship, but the majority of the firms we work with are afraid of that. I don’t know what the solution is, but I think if I was trying to promote technology, I would just assume that everyone is just afraid of losing the high-touch feeling with their client. 

The other thing that frustrates me in trying to get people to adopt technology is that they are all the ones outsourcing. Do you have that experience where if the technology doesn’t work as well as it should at the user level it’s because there are IT firms and broker/dealers messing it up? 


LYNCH: There are a number of clients that we work with where their senior team is committed to their legacy tech stack, perhaps an aging mainframe solution and a few selected vendors. This is often due to a lack of true understanding in terms of how the new solution might enhance and not disrupt the overall platform. Of course, sometimes we see firms’ IT organizations perceive new systems/tech as a threat to their roles. So sometimes it’s the human element that is the gating factor toward meaningful progress.  

TISHKEVICH: I want to hit on procurement and the regulations and being able to adapt to regulation change and this cloud thing. They are all somewhat related. What is happening now, especially in larger firms, is there is certain technology that nobody is just going to flip over. It’s not possible. There is a notion that cloud means somewhere out there. The newest interaction of the cloud—cloud native—is it’s basically your new mainframe. We made the full circle. We started the mainframes and came back to mainframes because before it was like: “Here is my mainframe and everything is right here, everything is pretty much in one place.” And then we said we needed personal computers. Then we went to the web, and now the web has turned into the cloud that is “somewhere out there,” and now the cloud technology is coming right back down. We can deploy cloud technology. It’s made its complete circle now. You can have your security and all the things on your mainframe and have the cloud too. 

Now add to the equation that technology jobs are going to go away. Of course, there are new jobs coming and popping up every month. Before, software developers might have a single skill that they could keep up for about five years before they would have to learn a new one. Now, it’s down to one or two years. You literally have to retool your skill set to stay relevant. It’s becoming increasingly difficult. Everybody is trying to get to the point of delivering more value to the business at a lower cost and faster pace. You have to make some decisions, whether that is outsourcing or picking the right vendors, and maybe the vendors are right for this year but not next year as things might change. 

It’s important to keep in mind that the advisors these firms serve want something different. The firms that deliver on that expectation are the ones that are going to succeed. We see that happening at a very rapid pace this year. It wasn’t happening last year. It’s changing so quickly.

LYNCH: We work with a number of firms that put more power in the chief risk officer’s view or peer view. So, procurements involve the risk people, particularly cybersecurity and other risk. We understand the reasons they do this, but we do wonder if the time required sometimes puts the firms at risk of falling farther behind the competition, particularly in the eyes of the affiliated advisors. If you are at risk at losing advisors because your advisor service model is suffering, and you need to move to some sort of upgraded capability, accelerated decisions are necessary.  

VOLPE: I look at it too. We deal with 11 different global banks and all of them have the same request, but they go about it differently. We are spending more and more resources complying with what should effectively be the same thing, but since they all look at this differently, we spend a lot of resources going through that. 

TISHKEVICH: You definitely want to do your due diligence, but there is a huge evolution, maybe even a huge revolution, that is going on right now with technology. I think we say what do we see in this phase so those firms that are able to, adopt newer technology and start revamping their staff. Some firms in the industry are starting to do that. They are going to be the most successful and get more wallet share from their clients. They are going to get more advisors. There will be more consolidation going on because of this. Larger firms must make these tough decisions and get off the mainframes and start creating a path to go to a more efficient technology because, as systems change on a dime, you simply can’t do it with legacy, and it’s going to cost every firm many millions of dollars to be able to adjust—especially given that the political environment is very dynamic in our day and age. The ability to adjust and to really transform their technology more now than ever is a survivor kit.

MILLER: In my mind, toward the end of the conversation today, I was thinking about the challenges. I pictured all your products being on a shelf in a pharmacy, all these great products that solve problems like medication. The industry, being the patient, but for the most part, there is no doctor in between your products and the advisors, to help make the right choices. That is the point of confusion, and it’s really an issue because the end-users are thinking about compliance, the client experience, cybersecurity, the ease of adoption and so forth—so the end-users are ill-equipped to make and decide what to put on the self. 

I think the future really belongs to the advisor/industry side, not the technology side. The future really belongs to the collaborators that can also figure out how to eliminate the bureaucracy. If you think about Uber, they are completely designed to eliminate any bureaucracy. They got rid of hundreds of jobs that existed in the taxi cab world. Bureaucracy is such an obstacle. If I was an advisor, I would appreciate being able to collaborate and provide great value and great decisions without the hindrance of such bureaucracy. Those kinds of organizations will have such an advantage in the future.

LYNCH: This has been great. I appreciate everyone’s participation. 

Technology Decisions and Risk


Having a clear and concise understanding of the reasons for your technology-based decisions is essential for ensuring selection and implementation of the most optimal solution(s) within the time frames required to realize the benefits required to meet your overall business objectives.

Key Decisions

  1. Does success of the tech decisions you’re contemplating require process and behavioral changes on the part of your team? 
  2. Is the tech vendor presenting ideas that require a change in your business practices to make the tech work as advertised?  
  3. Is the change required optimal for your business, or just for optimizing the proposed vendor solution?
  4. How long is the tail on the buying decision?
  5. Will the solution you selected back in Year 1 still be relevant to your business when realistically understanding the tail?
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