From the July 2006 issue of Boomer Market Advisor • Subscribe!

Client-centric technology

ING Advisors Network President Valerie Brown can't pinpoint exactly when it happened, but somewhere in 2002 or 2003, a shift occurred in the technological relationship between representative and broker/dealer. During that period, Brown recalls, it became clear broker/dealers had to do more than merely offer discounted, off-the-shelf software.

Around this same time, Robert Klingensmith, managing principal at R.L. Smith Financial in Northern Virginia, came to the frustrating realization that non-integrated technology was both time and cost prohibitive. The software mish-mash he was stuck with was unwieldy to manage and inefficient to use. From both the broker/dealer and advisor perspectives, technology had become a burden, rather than a boon.

In Klingensmith's case, he was spending large chunks of his days entering data to complete trades. The financial services firm he worked for simply lacked the technology to make the process more efficient. It was then and there that he decided to go independent. His first task was to seek out a broker/dealer whose technology could liberate him from menial data-entry so he could focus more on client service. Having found one, he can now finish in five minutes what used to take three or four hours.

"I've regained all these hours to work in some way, shape or form for my clients," he proudly states.

With the boomer generation transitioning from asset accumulation to distribution, demand for complex retirement solutions has increased exponentially, says Brown. To deliver complex solutions, advisors need technology platforms that are both powerful and user-friendly.

It is in this context, she says, baby boomers and their advisors are driving technological innovation -- improvements that are designed to make reps more productive and technology less obstructive.

For several years, broker/dealers have worked feverishly to develop software architecture in which contact management, compliance and other administrative systems fit seamlessly robust data and asset management tools.

"We're going to what I call a client-centric model," explains Bob Theilmann, regional chief information officer for the AIG Advisor Group. "We recognize [reps] want more free time to spend with clients, so we are finding ways we can streamline their daily workload. The goal overall is to enhance reps' productivity by mitigating the amount they need to do on every account. Quite frankly, it's been a long time coming."

Introduced in 2005, ING's SmartWorks platform is a Web-based workstation that provides customer information, commission reports, financial planning software (MoneyGuidePro), contact management software, and client and account filters. An integrated platform that recognizes data across multiple modules, keying in client information is now a "one and done" proposition, says Brown.

"Simplicity and integration best describes our platform," agrees Darren Tedesco, director of business systems at Waltham, Mass.-based Commonwealth Financial Network. "The best thing we can give our advisors is time, and what we have baked in to our platform gives them that time."

The investment broker/dealers are making in advanced software platforms are already paying off. At ING, implementing SmartWorks and other new systems "has helped us in recruiting and in retaining existing advisors," says Brown. "Advisors can grow their business without adding staff, or they can grow it a lot faster because they have more hours to spend on clients and prospects."

For AIG broker/dealers, 2005 was a record year for both assets under management and advisor recruitment, which Theilmann attributes largely to superior technology. AIG has focused on developing more efficient systems for asset management and regulatory compliance. With more activity in boomer accounts, there's a new premium on automation and efficiency.

"We've recognized the broad shift into asset management," he says, "and have focused on automating many of the tools otherwise requiring rep time, including policy statements, investment selections and rebalancing."

Among the tech tools now at his disposal, Klingensmith says he has benefited most from platforms that execute block trades, as well as other multi-client transactions, with the push of a button. The platform also allows him to rebalance client portfolios according to prescribed models.

Software suites such as ING's SmartWorks and AIG's Vision 2020 give advisors access to similar portfolio management capabilities. They also offer analysis and monitoring tools that alert advisors when a client's portfolio reaches or surpasses certain thresholds. Using these tools in an integrated fashion, says Brown, gives advisors an edge because they gain a "holistic view of what's going on."

Not only has new technology increased the speed at which transactions are executed, it's simplified the process of notifying clients about the overall status of their portfolios. Brown notes that immediate access to portfolio information makes for a more educated client base. Clients who better understand the portfolios, including the goals and risks of the strategies their advisors employ, tend be easier to deal with.

Given how time sensitive advisors tend to be and how time-intensive compliance has become, broker/dealers are placing a major emphasis on reducing headaches associated with required regulatory paperwork.

"The storyline has been all about streamlining rep and supervisor workloads," says Theilmann. To that end, later this year AIG plans on rolling out an automated system for supervising rep communication, as well as a new self-service platform for reps to expedite license renewals.

ING is similarly focused on making the compliance process more efficient, says Brown.

"Since the market turned in 2000, it's much more time-consuming [for reps] to do business. We have to make it easier for reps to do [compliance-related] paperwork so they can spend more time with clients."

While broker/dealers have made major technological improvements in a relatively short period of time, there always will be room for improvement, says Theilmann.

"You have to constantly evolve a platform or people get tired of it."

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