As its name implies, AdviceAmerica has been a player in the online financial planning business for more than 10 years, providing the engine behind some major bank, credit union and community bank, B/D, and even direct-to-consumer online planning applications for over 10 years.
On June 7, Fiserv announced it had acquired AdviceAmerica for an undisclosed sum, prompting the president of Fiserv’s Financial Institutions Group, Mike Gianoni, to say in a statement that the deal “advances the Investment Services strategy to be the platform of choice for the wealth management industry.”
Purna Pareek, the founder and CEO of AdviceAmerica, and Cheryl Nash, senior VP of Fiserv Investment Services, visited the Investment Advisor Group’s offices in Hoboken on July 1 to speak about the acquisition and the new venture’s plans.
Q: Tell us about your strategy. Who are your users now, and who do you hope will become your users?
Nash: Before the merger, Investment Services was focused on its technology platform for managed accounts–asset managers, banks and trust companies, and back-office solutions for the whole wealth management space. As we started looking at trends in the marketplace and what our clients and the industry were looking for, we saw a great opportunity with AdviceAmerica.
Pareek: We have tools for agents and broker/dealers–relationship management tools, tools to sell insurance policies and annuities, for example.
Q: So how do you use the AdviceAmerica platform to do financial planning?
Pareek: We serve three or four different channels. One is the major firms, the large-enterprise customers, where we provide the technology platforms on which we can build multiple custom applications. But from the perspective of investment advisors such as independent broker/dealers and agents, we have a suite of tools. One of them is called AdvisorVision, which is a financial planning tool used by investment advisors and financial planners.
Then we have a whole bunch of other tools, such as CRM tools, called ClientVision, which is a Web-based relationship management (CRM) tool designed for one- to 10-person offices such as insurance agents, investment advisors, and insurance brokers. One interesting twist that we offer on AdvisorVision is a little planning tool–it’s an private-label tool–that advisors can add to their Web site, and clients and prospects can use it to do quick retirement planning.
Q: So this is a good way for clients to see how far behind they are, and then they’ll want to give the investment advisor a call?
Pareek: That’s right. The customer can click a button that says “I want to talk to you, give me a call,” or they can send an e-mail. You’ve captured all this data [by the consumer providing their financial data in the online tool], and AdvisorVision will populate that data [into its application].
Q: So for that first advisor-prospect meeting, the advisor doesn’t have to say, “Bring me all your financial data and income tax returns for the last 10 years?”
Pareek: Yes, you don’t have to do all that data entry because the client has already gone through it on the Web. You know the client already, you know the assets, the IRAs, the 401(k) [assets]. It’s a lead generation mechanism along with a productivity enhancement tool because you’re capturing all this data.
Q: Is this a way to facilitate the conversation between the advisor and the client?
Nash: This is a new way to deliver advice. When you look at the recent financial crisis, advisors are looking to talk to their clients about something different than why their portfolios are down. They’re looking to set goals with their clients on when they can retire and how much money they’ll need and other milestones. AdviceAmerica tools give you that information, so you as an advisor can have a different conversation than whether the Dow Jones went down this many points today. You can talk about, “This is where your portfolio needs to be, and this is how we’re going to get you there.” It really is a different way to give advice.
Q: Advisors already have a whole suite of tools, but they’re not really integrated. How do you solve the problem of inefficiencies with the user interface? How do you make the user experience seamless?
Pareek: We’re trying to solve that problem with data integration and by creating a unified workstation for the desktop, so [the advisor doesn't even have to know] when you move from one tool to another. You don’t have to learn new applications, new workflows, new buttons. We’re working on providing a desktop that allows you to build relationships and do planning and deliver advice, and once you’ve done that, it implements and executes the transactions by purchasing mutual funds and ETFs and insurance policies. It automates the process so the advisor is more efficient. Are we there today 100%? No. But that’s where we’re going, that’s our vision, and it’s unique in the industry. Nobody has it, and people are talking about it.
Q: So you’re doing what My Silver Bullet is trying to do, but do it industry-wide?
Pareek: That’s right. My Silver Bullet is trying to go point to point so advisors don’t have to deal with 12 different providers. How many vendors have those applications? Most of them are small, and they don’t have the resources. But in our opinion, that has to become the industry standard for Web services. When that happens, that will be a game changer.
Q: RIAs and insurance companies have different custodians and different clearing firms, and everybody is working on this in their own way. Suresh Kumar at Pershing has put together NetX360 which already has a lot of integration, too. So if I’m an RIA and I custody with Pershing or whoever, where does the AdviceAmerica workstation fit in. How will you work with a broker/dealer who clears with, say, a National Financial?
Pareek: Suresh’s workstation doesn’t have financial planning. It may have EISI (the financial planning software), let’s say, but it’s a separate application. It’s nothing more than a link on his so-called workstation. You click on it, it pops up in a separate window, and you do what you have to do. To me, that’s not integration.
Q: So you’re saying that even though there’s one sign-on on NetX360, and you then have access to these separate applications, that’s still not integration?
Pareek: Exactly. It doesn’t work. Let’s say it’s CRM. So you click on another button in NetX360 and you go to RedTail. RedTail has its own way of doing things. Sure, the data goes into NetX360, which is just demographics data and nothing else. What about positions and accounts and asset allocation? CRM needs that, too, but that doesn’t flow into RedTail. So it’s a very painful process, when you get down to the nitty-gritty details. What we’re trying to do is create a seamless experience…with exactly the same user interface.
Read a story about Fiserv’s AdviceAmerica acquisition from archives of InvestmentAdvisor.com.
Read an early review of AdviceAmerica’s then-new services for advisors from the archives of Investment Advisor.
Read a news report on TD Ameritrade’s acquisition of Fiserv ISS (DataLynx) from the archives of Investment Advisor.