February 25, 2013

Impressions From T3 Conference: The Future Is Bright, Part 2

It’s by far be the largest advisor-centric technology conference of the year

In the first part of our post on my impressions of the recent T3 conference, we discussed the ongoing shift to the cloud, as well as the always interesting rise of the integrators. We now turn to challenges for emerging technology and the possible areas for growth at T3.

Emerging Technology Challenges

Seeing the cutting edge of technology at the T3 conference also served to highlight some of the challenges emerging about the pace and direction of technology development as well, underscored by the irony that several sessions themselves were plagued by Powerpoint and A/V problems (albeit to a very sympathetic technology-inclined audience).

One of the most notable emerging technology challenges was how some vendors are clearly struggling with decisions about their direction for supporting mobile devices. While the adoption rate of tablets has been rapid with advisors—the recent Financial Planning magazine Tech Survey showed upwards of half of all advisors already own one, despite the fact that iPads haven't even been out for three years yet—software companies are clearly struggling with deciding what platform to develop for, even as advisors struggling to figure out how best to efficiently use tablets will be a major theme for 2013 in the first place.

While the aforementioned Tech Survey indicated that more than 80% of advisors own iPads, a non-trivial number are using Android or Windows devices (RIA custodian TradePMR in particular demonstrated an impressive Windows 8 app), and the latter categories are growing, and for most firms it's a challenge to develop for all three environments simultaneously. Some have chosen to focus on one direction in particular, while others have decided to focus not on making apps but simply on having a quality web-based interface that can be utilized from a browser on any device and platform.

Similarly, another notable trend was the increasing number of platforms that are trying to create apps (e.g., the RetireLogix financial planning app or the Orion Advisor Services app) or privately branded "portals" or "vaults" for the clients of advisors built onto the back end of many software packages (e.g., from eMoney Advisor).

Yet at the same time, the proliferation of apps, portals and vaults itself may become problematic for some firms. To the extent that each software package has its own offering, suddenly clients may end up with a confusing array of overlapping apps and portals to use, eliminating much of the simplification benefit they were intended to bring. It remains to be seen if new providers will emerge that can integrate multiple software packages and platforms for a client portal in a similar manner to what's being built for advisors.

Overall, though, perhaps the greatest technology challenge apparent at the conference remains the simple fact that advisors are only moving in a wary, begrudging manner to the cloud.

Questions about security of the data, portability of the data if the advisor decides to leave, and stability of the company were common. Expect to see a greater focus on establishing a proper due diligence process for evaluating a cloud-based software provider in the coming years.

Room For Further Growth 

Notwithstanding the success of the T3 conference itself, it's notable that the event clearly still has more room to grow.

For instance, there are now only a few financial planning software providers remaining at all. MoneyGuideProNaviPlaneMoney Advisor, and MoneyTree continue to dominate the marketplace, with IAS and Sungard lagging behind, although newcomer inStream Wealth is threatening to shake up the environment by demonstrating new ways that software can help change the delivery of financial planning to make it more proactive.

The number of popular CRM platforms is even fewer, and the core portfolio accounting software offerings are even fewer still. The software space for advisors is clearly still ripe for new disruptors, and the trend toward independence and cloud-based platforms appears to be making software innovation more appealing as it increases both the flexibility of software, the opportunities for integration and the potential number of advisor clients for new startup companies.

In addition, for a technology conference, there was a remarkable dearth of offerings for online/digital solutions for advisors themselves. For instance, RegEd was the only social media compliance tool that chose to participate in the conference—despite the thriving #T32013 conference hashtag on Twitter—and only AdvisorWebsites and Advisor Studios were offering state-of-the-art website design and supporting video and graphic design services for advisors.

Over all, the conference offering appeared to be disproportionately tilted toward the service needs of RIAs in particular—unique portfolio management (trading and rebalancing), accounting, and reporting tools. Notably, the tools for portfolio design are becoming more sophisticated as well, from old stalwarts like Morningstar to newer entrants like Hidden Levers (although competitor MacroRisk Analytics was nowhere to be seen) and conference newcomers StatPro and Riskalyze (the latter didn't even have a booth, but its CEO participated in the conference).

Nonetheless, the bottom line is that the Technology Tools for Today conference is clearly now a permanent fixture of the financial advisory world. As I've noted in the past, it is already one of the top 7 conferences for financial advisors, and the technology industry clearly thinks so as well, as last year MoneyGuidePro timed its latest G3 software release to the conference, and this year Envestnet used it as an opportunity to announce its new support for mobile devices. From its blend of technology solutions that can augment the efficiency of advisors and their practices, to the networking opportunities for companies that serve them, the T3 2014 conference will clearly be a can't miss event. 

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