From the July 2008 issue of Boomer Market Advisor • Subscribe!

Top tech tools for turbulent markets

What new, cutting-edge tech features are available to advisors? Is your broker/dealer making them available? And in an increasingly complicated and competitive market environment, how can they help you succeed?

The broker/dealer technology frenzy continues, with each firm eager to promote its offerings as the "latest and greatest" in assisting advisor partners in lowering costs and increasing revenue. But lately, there's an added sense of urgency. Turbulent markets, skyrocketing oil prices and the ongoing credit crunch means effective platforms to streamline the advisor's business are more critical than ever. Add fee compression and more regulation to the mix and, well, you get the idea.

The upside? Broker/dealers are responding. Thanks to a combination of competitive drive, technological one-upmanship and IT anxiety in the broker/dealer space, advisors now have access to a huge array of systems designed to make their lives easier and to help them do their jobs better.

But as much as they benefit advisors, the many advances in broker/dealer IT platforms also mean uncertainty: Am I making the most of the systems to which I have access? How does my broker/dealer's platform stack up versus the competition? And might it be worth changing broker/dealers to get access to better technology?

It's these questions that are keeping both advisors and broker/dealers on edge. One broker/dealer IT executive explains the situation best: "One of my roles is to understand what's out there in the marketplace. My competitors aren't just broker/dealers; they're third-party software companies. I have to watch all of them closely because you never know, some small broker/dealer could partner with one of those software companies to solve a problem we have spent years and millions of dollars trying to solve ourselves."

The upshot, says Randall L. Ciccati, president of the ING Advisor Group, the umbrella organization for four ING-owned broker/dealers, is that this year's crop of offerings means a better understanding of boomer client needs and the resources available to help.

"[Advisors] are going to understand client portfolios much better," Ciccati says. "And they'll be better able to manage client relationships."

The feedback the ING Advisor Group gathers from its reps indicates that powerful, user-friendly technology ranks "right up there at the top" of what advisors want most from their broker/dealers, Ciccati says.

And according to Randy Epright, executive vice president and chief operating officer with AIG Retirement Services, this year they're asking for the following:

  • Paperless office tools (imaging and workflow)
  • Pre-filled forms
  • e-Signature capabilities
  • Seamless systems integration
  • Central repository for all client assets and information (bank balances, wills, investments, etc.)

"It's the first three that we are hearing about the most," Epright says. "That's what they're requesting."
But how, specifically, can cutting-edge broker/dealer technology help? Quite simply, having access to quality broker/dealer technology is a difference-maker for advisory practices, regardless of production level. Platform features that are particularly valuable to the advisor include:

  • Online trade execution capability
  • Paperless forms and operations
  • Electronic signature capability
  • A system for simple, quick OSJ approval
  • Easy integration with CRM systems.Financial planning and diagnostic tools
  • The ability to generate consolidated client statements that encompass a full range of asset classes and holdings, from annuities and alternative investments to individual stocks
  • Highly accurate systems for reporting and recording-keeping
  • An imaging system that obviates the need to shuttle documents back and forth via overnight courier services
  • A form-filling system that populates Web-based and PDF forms with stored data. Such a system drastically reduces the frequency of data entry errors, cutting application denial rates to "virtually nothing," notes Ciccati.

The benefits of employing offerings like these are numerous, but a recent study from Tiburon Strategic Advisors (commissioned by Commonwealth Financial Network) found the following:

  • It reduces the need for support staff;
  • It shortens response and turnaround times on front- and back-office requests;
  • Greater reliability, plus back-office tracking results in far more efficient client service;
  • It promotes a paperless office; and
  • It eliminates many of the day-to-day business hurdles advisors face.

According to Epright, AIG Advisor Group just enhanced the Vision 2020 platform to address some of these needs and benefits. Known as Client Central, the new system will reduce the time advisors spend updating client records, allowing advisors more time to spend with their clients. Client Central also eliminates 75 percent of the disclosure and signature requirements traditionally needed for compliance purposes, he says.

"It was conceived and developed directly from advisor feedback, and more than 195,000 person hours were invested into the project," Epright says. Client Central allows advisors to aggregate client data and eliminate redundancies in processing and maintaining client accounts, therefore substantially streamlining the account-creation and maintenance process."

The company also developed auto blasting capabilities to simplify the time-consuming process of rebalancing assets. If an advisor wants to rebalance an asset class across all customers currently in that class, the advisor typically has to go through and rebalance each client. According to Epright, this is an extremely time-consuming process.

"We've developed technology that allows advisors to do overall model rebalancing, saving the advisor time and benefiting the client in the process," Epright says.

Ciccati is quick to note that with the plethora of new advances, training should not be overlooked.
"It's almost as important as the technology itself," he says. "You could have a state-of-the-art [platform] but if your advisors don't know how to use it, it's of little value."

Advisor education and training become especially important given the constant improvements and additions broker/dealers are making to their tech platforms. According to Ciccati, the IT department at ING Advisors Group focuses on standardizing processes system-wide so that advisors "follow the same front-end steps, regardless of what they're doing."

Amid constant technological flux, the challenge for advisors is how to leverage all the new and existing features in order to gain a competitive edge. To do so, experts suggest to advisors:

  • Take advantage of training offered by the broker/dealer.
  • Explore and use the systems, then pose questions and report issues to broker/dealer tech support staff.
  • Be open-minded about using new features.

Given the pace of new releases, it might be that last point that proves most valuable in the long-run.

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