The wealth management industry is notoriously slow to innovate, especially in how a wealth manager interacts with clients online.
“Client reporting in this industry—in wealth—is seen as pretty dreadful,” says John Wise, chairman and CEO of InvestCloud. “And everyone from very small clients to the biggest players in the industry are on the move, saying, ‘Our client experience is terrible. We have to change.’”
Many advisors have online portals where they can communicate with their clients and present some form of real-time portfolio reporting. But any time the advisor wants to make a change, new code has to be written. And programming is slow. Once it’s in place, client expectations have moved on to the next iteration of user experience, and the firm has to start all over.
So when Wise launched InvestCloud in 2010, he did it using a patented technology called “Programs Writing Programs,” allowing the creation of new iterations of programming without the need for a lot of new code.
InvestCloud was borne out of Wise’s previous software company, Netik, which built online portals for 70 of the largest banks, including Citibank, UBS, and Credit Suisse. But they cost a fortune to install; the average investment advisor wasn’t willing to spend $5 million to have access to a cloud-based integrated investment platform. InvestCloud was meant to bring the portal to the independent advisor.
Wise now has about 150 hedge fund managers and 360 registered investment advisors on the platform, managing a total $1.4 trillion in assets. Year-over-year, the company’s wealth management business has grown 210 percent. Some prominent clients include the Glenmede Trust Company, Crestone Capital Advisors, and Pitcairn, a multi-generational family office.
Wise believes design and a frictionless user interface are key to creating a good client experience. So when a wealth manager signs on, the first thing they’ll get is a custom-designed website.
“Your digital experience has to be a designed experience, and therefore it has to flow very naturally,” he says.
From there, advisors can create their own portal by adding any number of ready-made applets. These can cover everything an advisor may need, from document management and client communication to a CRM system. Advisors even have the ability to design their own applets.
And yes, InvestCloud gives advisors the tools to build their own robo investment platform. Advisors can pool a client’s funds, give them a risk-tolerance questionnaire, and allocate their assets into a portfolio of investments chosen by the advisor.
One thing Wise will not do is suggest what those investments should be. “We will never be ourselves a robo, because otherwise we’re competing with our clients,” he says. “But any of our clients can be robo in a short period of time. It’s a question of whether they want to be.”
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