What 6 Top BD Insiders Divulge About Fintech Trends

Six BD leaders gave Investment Advisor their take on the year’s biggest fintech news, their thoughts on what's to come and their favorite tech tools

(Illustration by Gary Neill) (Illustration by Gary Neill)

Regulatory matters may have dominated industry headlines for much of the year, but cybersecurity and technology issues had their fair share of the limelight. This year, more robo advisors came to life, along with a variety of mobile applications and social media tools.

The use of artificial intelligence made more inroads into financial services, with LPL Financial announcing its work on virtual assistants. Plus, a series of data breaches announced by organizations like the IRS and SEC — along with Equifax — raised concerns for investors, advisors and others.

(Related: Carson, Duran, Kitces on the Biggest Tech Stories of 2017 (and Beyond))

For insights on recent fintech news and IT trends overall, Investment Advisor turned to a dozen industry leaders, six broker-dealer leaders here and six from fintech industry in another article. They all shared their views on the top innovations of 2017, as well as what lies ahead for the field in 2018.

John BurmeisterJohn Burmeister President & COO, Lion Street

Biggest news of the year:

While it has not been impactful to the industry thus far, the potential for artificial intelligence is quite great; it's a topic that has been consistently highlighted at conferences I’ve attended. There have been ongoing advancements in predictive analytics, and this area is one in which I believe financial companies will need to adapt.

Thoughts on the Equifax breach:

The Equifax breach validated the internal decision we had made on protecting our firms. The amount of data that is at risk is astounding: 143 million people potentially impacted. I’m disturbed that a company that collects private data could find itself in this predicament. Even more frightening, what breaches are yet to be uncovered. This reinforces the need for all of us to be proactively vigilant.

Top achievement of 2017:

Late this year, we began evaluating solutions to help protect our firms and their clients from cyber risk. We are close to rolling out technology that our firms can use to run a health report on their devices (desktops, laptops, phones, tablets) and make certain they are compliant with our cyber policy and keep their clients safe.

Focus for 2018:

We will be offering new cybersecurity solutions to our firms, as well as rolling out new day-to-day tools our advisors will benefit from such as more improved and efficient commission processing. We are also focused on proactive in-force policy management of variable and fixed life insurance policies.

Favorite tools:

Our platform is designed within Pershing's NetX360. It serves as the hub for supervision, document management, Envestnet's advisory platform, workflows, and all other aspects of an account's life in an integrated system. We work closely with these service providers to continue making advancements that serve our advisors’ needs. Personally, I really like apps like Pennybox that help children learn about the importance of saving and give them a financial foundation.

More thoughts:

When you consider how fast this area has evolved and the speed at which it continues to progress, I think there will be a stronger need for holistic financial advisors. We will continue to monitor client needs and adopt systems to meet their expectations. We have positioned ourselves to offer the best tools for our advisors to do exactly that.

Vin CampagnoliVin Campagnoli Chief Information Officer, Raymond James

Biggest news of the year:

Reflecting on 2017, the DOL — and its impact on technology — was obviously significant. But while we addressed those requirements, we continued to develop new and enhanced tools for our financial advisors’ platform, called Advisor Access, with particular emphasis on cybersecurity, mobility, account aggregation and process efficiencies.

Thoughts on the Equifax breach:

The Equifax breach is one more reminder of how diligent we must be in protecting data: why we must follow best practices in the area of cybersecurity and reinforce those steps with our advisors daily, so their data and their clients’ data remain safe.

Top achievement of 2017:

We’ve had a very productive year, but one tool that has been universally popular and even award-winning is the Advisor Mobile platform we delivered to advisors — allowing them to be comprehensively connected with clients — anywhere, anytime.

Focus for 2018:

We are focused on several areas concurrently, but one that is exciting is the development of our wealth management technology. We are building a suite of centralized tools to streamline the investment planning process by providing a flexible and repeatable approach to help advisors meet their client's needs. The first phase of this initiative includes our recently launched Product Catalog application.

More thoughts:

What has historically set Raymond James apart from other firms is our commitment to developing technology for advisors by advisors. We always invite input from our Technology Advisory Council (16 financial advisors) and value their insights at all stages of development. Our platform has truly been designed, tested, improved and honed by and for advisors.

Lon DolberLon Dolber CEO & President, American Portfolios Holdings; President, American Portfolios Financial Services

Biggest news of the year:

I think the most significant advancement within the fintech industry for 2017 has been the use of artificial intelligence and cultivating an understanding of customer preferences through deep learning — the ability for machines to intake and interpret data and, in turn, provide relevant and meaningful solutions in the marketplace. It's still not very prevalent, but it will be huge going forward.

Most impressive development of 2017:

Voice assistant technology, like Google Home, intrigues me. While, to my knowledge, it's still in the R&D phase of development for the fintech industry, this type of technology could provide greater improvements and capabilities in scale and efficiency. If a computer can respond to my voice and do things for me, imagine how useful this technology might be in financial services and for the investment professional serving their clients.

Thoughts on the Equifax breach:

Clearly, the Equifax breach has been very disconcerting. Quite frankly, the government should hold credit bureaus to the same regulatory standards they do for the securities and broker-dealer industry when it comes to client privacy.

Top achievement of 2017:

The development of our client portal, which is part of our technology platform called HomePort, includes the opportunity to bring the client into the service model. We’re making it possible for clients to make changes that our advisors are comfortable having them do on their own, such as a change of address, reinvestment changes or check requests, to name a few. Doing so creates the scale and operational efficiency that both an advisor and we, as a service provider, need.

Focus for 2018:

We’re scaling up digital interaction with our investment professionals by making strides in the customer service area, such as improving service requests, ticketing and offering live chat as an option to provide support.

Favorite tools:

Outside of work, I use Google Home to control devices, such as my TV and music system. At the office, I’d say it's our custom-built marketing automation system, which integrates five SaaS (Software as a Service) solutions for increased scalability and efficiency. It's a digital marketing tool that launches and manages campaigns directed at our existing advisors to help them increase their business; and for the firm, it supports both recruiting efforts and increasing our brand awareness.

More thoughts:

I’m fascinated by the research being done in the area of hyper-personalization, much like what some major retailers are doing online to reach customers in a more meaningful way to build loyalty. I think the financial services industry should do the same, as this, ultimately, is a relationship business.

--- Related: Carson, Duran, Kitces on the Biggest Tech Stories of 2017 (and Beyond)

Nick GrahamNick Graham CTO & First Vice President, Cambridge Investment Research

Biggest news of the year:

The pace and scope of consolidation and M&A activity in the fintech industry, and the implications this has for the advice industry.

Most impressive development of 2017:

The emergence of artificial intelligence and data mining in terms of how these may apply to financial planning (such as the availability of a variety of criteria including the likes and dislikes of the investing client, and so on, and how this information may influence financial planning).

Thoughts on the Equifax breach:

We have cybersecurity plans in place and are constantly monitoring potential issues across industries. In response to news of the Equifax data breach, we began closely monitoring the incident with advisor businesses and investing clients in mind. We have protections to authenticate identity and authority of clients before taking action or sharing information.

Top achievements of 2017:

The continued expansion of WealthPort, our comprehensive managed account experience delivering efficient model management, while consolidating the tools advisors need in an easily accessible digital platform.

Focus for 2018:

We are prioritizing our focused innovation on enabling our advisors to have the choice of offering a quality digital advice component or digitized investor experience that best compliments their unique business model and service to their investing clients — through our investor center.

Dean RagerDean Rager CIO & Senior Vice President, Geneos Wealth Management

Biggest news of the year:

The sheer dollar volume of private equity money pouring into the industry. The why is simple, they are trying to disrupt the bond between the individual investor and the advisor behind a desk.

Most impressive development of 2017:

CleverDome. I think this particular method to protect data is a true development and not a rehash of financial planning or asset allocation like most of the fintech products.

Thoughts on the Equifax breach:

Same problem, different company ho-hum. Seems churlish right, but the FBI said in a cyber conference two years ago, they do not believe there is an American citizen whose data has not been hacked in one way or another.

Top achievements of 2017:

Our branch cybersecurity focus, as a firm we actively manage our entire branch network using Jay Peters and Security Snapshot. We conduct monthly phishing campaigns using Wombat Security Technologies as well as ongoing cybersecurity training and the combination helps us feel much more secure with offices spread across the country.

Focus for 2018:

Enhancing our cybersecurity profile by exploring the use of cleverDome. While robo-advisors dominate the headlines, it's cybersecurity where rubber meets the road. We want to do everything possible to stay out of the headlines a la Equifax.

Favorite tools:

The continued expansion of our SelectOne platform to help advisors overcome the fee drag being created by the robos. This allows them to give more one-on-focus to clients’ lives.

Off the clock, I am all about AI and how to apply it properly in the world of compliance and supervision.

More thoughts:

Our goal is to enhance the target of disruption, advisors, and to turn them into a modern-day Power Loader as seen in the Alien Anthology (based on the “Alien” movies). In other words, give them the ability to become a super high-performing advisor by magnifying their built-in advantage over any pure computer/fintech solution — the ability to bring a human touch when and where needed.

Darren TedescoDarren Tedesco Managing Principal, Innovation & Strategy, Commonwealth Financial Network

Biggest news of the year:

The continued consolidation of not only financial service firms, but also of fintech firms has been significant and noteworthy, with some major industry players being consolidated.

Most impressive developments of 2017:

The possibility of chatbots/AI becoming a major complement to advisors serving clients is only in the first inning, but will make a huge impact within the next three to five years.

Thoughts on the Equifax breach:

The Equifax breach has heightened awareness of the need for infosec diligence across the industry. At Commonwealth, we take the safeguarding of our clients’ data very seriously and are constantly evolving our security measures as a result.

Top achievements of 2017:

First, adding a secured messaging system tied into both client/advisor portals and client/advisor apps was a huge improvement in the way that clients/advisors can collaborate in real-time with total end-to-end encryption; and second, rolling out Propel, our new Master Service Agreement (MSA) that replaces advisors need to get client signatures in the future for new accounts, account changes, etc.

Focus for 2018:

A complete overhaul of our 360 suite of tools and getting texting for advisors integrated into Commonwealth's mobile app.

Favorite fintech tools:

I love my Lenovo X1 Carbon — light, powerful, touch screen, long battery life — all the things you need as a road warrior. Off the clock, it's a toss-up between Netflix and my Nest devices.

--- Related: Carson, Duran, Kitces on the Biggest Tech Stories of 2017 (and Beyond)

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