More On Legal & Compliancefrom The Advisor's Professional Library
- Privacy Policies and Rules Whether an RIA is SEC or state-registered, the firm must have policies and procedures in effect to protect clients privacy. Policies and procedures should explicitly require an RIA to send out its privacy notice each year.
- Preventing and Dealing with Client Complaints Although the SEC has not provided specific guidance on how client complaints should be handled, a firms policies and procedures should provide clear direction how to do so, as neglecting complaints can exacerbate a bad situation.
Independent financial advisors and broker-dealers are radically shifting their thinking and practices related to technology, and it’s about time, experts say. This transformation is being discussed in depth at the TechLeaders 2013 conference, on tap in the greater Dallas area Thursday and Friday.
“As an industry, we approach these issues as islands, and this has worked well enough for the past 20 years,” said David Fetter, CEO of Quadron Data Solutions. “But this is no longer effective, and all [our technology islands] are under attack.
"For broker-dealers, pressure on margins, from advisors and investors (and their high expectations) and regulators are intense. We have problems in the industry, and, fortunately, now we have solutions,” Fetter said.
The latest data collected by TechLeaders, in cooperation with Beacon Strategies and Investment Advisor magazine, says there has been a 117% shift toward looking at third-party providers. “There’s now a pronounced look being taken at third-party providers and more confidence” in utilizing these resources, said Chip Kispert, editorial director of TechLeaders and managing partner of Beacon Strategies.
“Most folks have gone to the dark side from the traditional … view of investing [only] in ourselves when it comes to technology,” said Marshall Levin, a managing partner with Beacon.
In addition to data management issues, the industry is being hit by a number of challenges on the communications front as social media becomes more important, others say.
“There’s more and more pressure,” said Blane Warrene, senior vice president of customer communications for RegEd. “Demands in the shift world of communications are creating an intense amount of force on how to differentiate yourself online and compete with those down the street, who are all using a variety of platforms.”
For instance, says Warrene, advisors need Google+ accounts to “be fully tapped into the social media scene, and your compliance department may say no to this move.”
Tech companies at the event, which attracts about 150 attendees, hope to convince independent advisors and broker-dealer representatives that they can help.
“We have three goals in staging this event,” said Peter Montoya, executive producer of TechLeaders, in his opening remarks. “This gives firms the chance to launch the latest broker-dealer technology with instant onsite reactions, to be a forum for thought leadership … and to give users the chance to speak directly with developers for an immediate feedback loop.”
Paul Peterson, president of Emerald Connect, described the importance of search engine optimization (or SEO) when managing websites for advisors. “You pay $20 a month to Google and Yahoo, and that means ad placement and better search results,” said Peterson. “About 95% of the time, you will come up in one of the top three spots.”
Likewise with investors, “The smart folks are doing much more research online before going to an advisor and the broker-dealer,” he noted.
“We don’t have the same tools in the hands of advisors to connect and communicate with them, and this is a real challenge for advisors,” concluded the RegEd executive.
That seems to explain why the latest TechLeaders survey found that 42% of IBDs surveyed say they are deploying a social media infrastructure, up from 33% last year. Plus, 25% are in the process of getting ready for such deployment, up from 22% in 2012.