Skip navigation
Darrin Courtney Photo by Megan Green
Gartner analyst Darrin Courtney moderated one of the Wealth Management Industry Awards Technology Roundtable discussions.

From Data Standards to CX, Industry Leaders Tackle Tech

Rapidly advancing technology poses an array of challenges for today's financial advisors. A group of tech vendors, b/ds and others discussed them all during a Wealth Management Industry Awards Technology Roundtable discussion.

Over a dozen leaders from a mix of financial services companies met in a conference at the famous New York Athletic Club, perched at the edge of New York City’s Central Park. They were but one group, among four, that came together to share their tech stories. With Gartner analyst Darrin Courtney leading the charge, tech vendors, broker/dealer representatives and others deeply involved with the industry engaged in a b/d-centric conversation that ranged from the importance of client experience, or CX, to the benefits of data standardization. The group also took a critical look at the role of automated advice platforms, or so-called robo advisors, and argued over how best to get advisor acceptance of new technology amid an industry evolving away from an investment-centric to a more holistic advice model.

Tackling the challenges of providing a high-quality client experience, Matthew Schlueter, EVP and president of Wealth Management Solutions at Advisor Group, said that advisors have a hard time shaking off the segmented environment they work in. “Right now, I think many firms are very siloed in the approach to the end consumer,” he said, “versus just one consolidated experience that kind of brings it all together.”

“Those that can integrate and bring [those disparate approaches] together in one kind of thoughtful experience—that scales to the different types of clients and different personas that you’re trying to serve—I think it is one of the biggest tasks that’s ahead of us,” he explained.

Around the table, leaders agreed with Schlueter’s assessment. “We’ve already made the client experience fundamentally difficult,” said Heeren Pathak, CTO at Vestmark. Some firms leave their advisors to figure out technology and programs on their own, he said, leaving advisors with jumbled understandings of their own systems, hindering business development.

To address part of this challenge, Lon Dolber, CEO of American Portfolios Financial Services, actually includes the “investing public” in its product building process, even inviting end clients to its conferences. Feedback he gets from end investors makes its way into products that both advisors and clients will eventually use.

Another strategy for improving client experience is getting advisors to focus on practice management, not just implementing new technology, said Ryan George, assistant VP of marketing and communications at independent broker/dealer 1st Global.

Advisors who use tools and features with better-designed client experiences are more efficient, Schlueter observed. While it seems intuitive, it’s something the financial advice world needs reminding of: Consumers enjoy good technology. “Firms that can basically take the best of digital all the way down to the consumer, but also still assert advice in the middle, will be very successful,” Schlueter said.

Another step to creating efficiency is data standardization, said Dolber. Clearing firms are different from product manufacturers, which are different from others who provide insight and value to advisors. “There’s no standard in data,” he said. “Our industry is so behind.”

“The regulators have no willpower to want to force a data standard on the industry,” he explained. “They tried with the clearing firms and got pushed back. I always wonder why the firms pushed back so much. They talked about the privacy issue, but I never got it because you know, the smallest firms should be able to compete in America, on financial services. It shouldn’t just be about the big giant firms.”

American Portfolios Financial Services instead has “18 different data loaders,” said Dolber, just to get data inputs to a format “where you can actually do something.”  

From data standardization, the conversation turned to the role of robo advisors in financial services. One of the b/d representatives in attendance, Robert Pettman EVP of Product and Platform Management at LPL Financial, said his firm likes to conceptualize automated investment platforms into components: essentially a proposal generation system, a centrally managed account platform, an algorithm to manage investments and a client portal.

Taking that approach with its own robo, called Guided Wealth Portfolios, which LPL introduced to advisors two years ago, the firm “discovered by accident” that providing its clients with a robo helped improve efficiency. “Essentially [the robo] reduces what I would categorize as the low-quality call to a financial advisor but preserves the quality calls,” Pettman said. In other words, advisors employing the robo with lower AUM clients no longer spend hours fact-finding with those new clients, instead turning them over to an automated onboarding that allows clients to self-report information in a way that’s “more convenient” for a client (and advisor), he said.

Inserting the advisor only where he or she is needed to address issues or problems within the deconstructed robo workflow (whether proposal generation or setup of a client's account management, etc.) “has this element of freeing up time in the day,” he explained. “It's just not in the way that we all think of it, in this sort of packaged thing that people know about today,” Pettman said, referring to how most conceive of automated robos.

Firms with robo offerings shouldn’t be separating those features from the rest of the firm’s offerings, agreed Pathak. He thinks of a robo as another “channel of communication.” To illustrate his point, he turned to Amazon and Walmart: Amazon initially relied on a digital sales channel, while Walmart traditionally relied on a physical sales channel. Over time, both companies have diversified their channels, with Amazon buying physical sales channels and Walmart buying digital ones. “That’s what we’re going to go through here: It’s not robo; it’s not face-to-face. It’s a combination of things.”

“The advisor is not going to get out of the picture. These are big decisions for people,” Pathak said. “For big decisions, you’re going to want to go to your doctor—you’re not going to want to look at WebMD, right?”

But with the increasing sophistication of technology comes a demand on advisors to be more sophisticated, too, noted Gartner's Courtney. As investors increasingly demand holistic solutions, the challenge of “upskilling” advisors arises, he pointed out. It’s no longer enough for firms to have generalist advisors, they need estate planning, retirement planning and business transition specialists.

To put it another way, and extend the analogy posed by Pathak, how do firms ensure their advisors are actually modern doctors, and not archaic patent medicine pushers?

Solutions broke into the camps of training versus use of outside motivation. Pathak and Stephen Langlois, head of business development at eMoney Advisor, felt training was the answer. Firms need to prioritize “behavioral planning,” said Pathak, who nevertheless admitted that teaching emotional intelligence is quite difficult.

“It’s training and education about actually how to engage on this,” agreed Langlois. “It’s not technical training on how to use the tool.”

Meanwhile, Pettman said clients should be used as motivators. “While a financial advisor may not be willing to immediately adopt planning, they will quickly change when their investors start interacting on their investor portal or what have you,” he said. “You don’t just do it overnight. You have to build up slowly. That’s how you sequence a change like that.”

LPL uses what it calls personas, or template investor profiles, to roughly segment clients, before fine-tuning processes and systems for end clients, he said.

As the discussion came to a close, all the leaders circled around the table agreed on one thing: the future will see a merging of technological- and human-provided advice. Collaboration, with humans and machines working together, will provide augmented insights and better outcomes for investors.  

Hide comments


  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.