Jessica Maldonado remembers the reaction TD Ameritrade got from financial advisors during an operations panel meeting at a Dallas Hilton last year. When the firm told the audience it had opened its application programming interface (API) to third-party technology vendors, allowing advisors to potentially use any outside financial program, the room erupted in applause.
“They got a standing ovation,” says Maldonado, an advisor with the Overland Park, Kan.-based Searcy Financial Services. “No client likes to be forced into a box. No advisor likes to be forced into a box.”
While applause may not be a standard reaction, custodians like Schwab Institutional, TD Ameritrade, Pershing and Fidelity Institutional Wealth Services are reaching out on a regular basis to their clients, eager for feedback — both positive and negative — on the technology they weave into their platforms. Besides advisory panels, custodians also collect criticism through email, comments from on-site field managers and also web-based surveys. Sometimes that feedback can grow into results fairly quickly — and sometimes that feedback takes a bit more time to percolate. Most custodial firms are forced to cherry-pick which enhancement or new product gets prioritized based on the number of demands its advisor clients make.
TDA uses both an advisor panel and an operations panel to capture advice from client firms. The latter meets four times a year, with members, including Maldonado, who are usually the point people in a firm overseeing integration of software programs with TDA's platform, Veo.
“Our advisors are not shy about giving us feedback, and that's great,” says Jon Patullo, director of technology product management. “That's how we become a better custodian.”
Hear Me Out
Fidelity, meanwhile, has turned up the volume on channels that include its advisory council, field-based operations consultants, tech support staff in call centers, plus Fidelity's Center for Applied Technology (FCAT) where advisors are invited to test-drive new platforms, tools and programs.
“We'll bring them in to test prototypes,” says Ed O'Brien, head of technology for Fidelity Institutional Wealth Services. “Right now we're looking at eye movement and tracking.”
One of the latest projects Fidelity put through the advisor mill is a new mobile platform built for the iPhone, which its clients beta tested prior to the platform going live on Feb. 17. The decision to develop the tool flowed from requests made by Fidelity's affiliated advisors, who found they needed a way to respond quickly to clients while on the road, says O'Brien. Besides offering access to investors' holdings, the mobile platform includes real-time alerts about a client's account — also something advisors said they needed, and got.
“But not every advisor's suggestion makes it into a final product or tweak. Outliers do exist. In rooms made up of highly-driven advisors, random suggestions will get heard, but then prioritized just by the nature of the people there.
“You're going to have straight money managers, some financial planners, some with thousands of accounts, some with 130 clients,” says Maldonado, whose own firm advises 133 clients with $141.8 million in assets under management. “Since we have a lot of different ways of doing things, sometimes there isn't consensus.”
Maldonado herself remembers making a suggestion at one council meeting. She asked for adjustments to TDA cost-basis reports. Several people emphatically said no, arguing that it would negatively affect the way they run their own reporting to clients.
Getting Intelligence
Schwab, like other custodians, holds in-person get togethers, gathers feedback on the road and culls comments from client call-centers. But it recently also turned online as it rolled out its Intelligent Integration project. The firm emailed online surveys to every advisor asking them to nominate programs they wanted Schwab to integrate on its platform.
Surveys went out June of 2010, says Neesha Hathi, vice president of technology solutions, and they closed in October — with the custodian announcing final selections at IMPACT, its national conference, less than a month later. Hathi says Schwab takes its client concerns and requests quite seriously. As she notes, when their business grows, so too does Schwab's, and in that regard supplying advisors with technology tools that help them grow their business, works for Schwab too.
“The reason we think their input is so important is if they spend two fewer hours processing, they spend two more hours prospecting,” she says. “And if we can help streamline their workflow so they can hire someone instead who's client facing, we know that translates into better business for us.”
One technology, however, where custodians are not excessively focusing — despite their explosive use in the general public — are social networking platforms like Facebook or Twitter. While some firms including Schwab and Fidelity maintain active Twitter accounts, their followings are still small and in the thousands at best, indicating advisors and users are not turning to these channels widely yet.
Listen Closely
While Pershing cultivates advisor feedback like other custodians, it also looks beyond what its advisors say they want, and turns to support staff, too. Assistants? Their voices played a roll in the final design of Pershing's NetX360 by suggesting a client meeting preparation tool, says Mayer. All voices in Pershing's clients are listened to closely, she adds.
Pershing has tried chat capability on small test groups of advisors, allowing them to speak with the custodian to see if they would adopt the feature widely, or not. They did. And Pershing is now, after building the infrastructure to record the chat conversations, piloting the tool on its NetX360 platform this year, says Lucille Mayer, Pershing's managing director based in Jersey City, N.J.
“I never felt Pershing had me in a room for window dressing purposes, and then went off to do their own thing,” says Shawn McLaughlin, president and CEO of the Alexandria, Va.-based McLaughlin Ryder Investments, which uses Pershing as its custodian for the majority of its more than $500 million in assets under management. “And I will say they've been very mindful of not wasting our time.”
Custodians seem to feel grateful, in fact, that advisors make the effort to make their products stronger — and better tailored to their needs. After all, there are many cards in the deck, and, while changing accounts from one custodian to another is not the simplest move, these defections definitely happen.
Listening to advisors, adopting their suggestions and perhaps their assistants' requests as well, then building products that not only work, but also improve advisors' practices, will improve a custodian's bottom line, too. And while applause is always a plus, complaints are appreciated more.
“Anyone who knows me knows I love to hear things are great,” says Pershing's Mayer. “But that's not what I really want to hear.”