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Top 10 Technology Trends for Advisors and Their Partners, Pt. 4: Integrated Workstation

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In the previous post of our twelve-part blog series on the Top 10 Technology Trends for advisors and their partners, we discussed how the world is going mobile, and therefore every advisor and institution will need to have a credible mobile offering or risk becoming irrelevant. The third trend we will discuss in this post is the integrated workstation. 

The desire for more technical integration has been a trend for so long that it is, in many ways, hard to actually call it a trend. From linking stock quotes to news stories in the 1980s to today’s challenges of connecting social media to client records, the financial services industry has been a leader in making technologies work better together. With each financial services success, along with the spectacular success of consumer user experiences from products like Apple’s iPhone and iPad (which we will discuss in an upcoming blog) the expectation that everything works together continues to grow. 

So if integrated technology for advisors has been in existence for decades, what exactly is different now?  A major issue with past integrated platforms is that it required advisors to lose some of each technology’s functionality in the name of integration. For the most part, advisors have cared more about the functionality of each software component they use and have not been willing to conform to a technology with sub-par integrated components.  If one looks at the number of vendors providing solutions solely focused in the CRM, portfolio management, financial planning and document management space it quickly becomes evident that functionality has ruled the day. In summary, advisors have preferred to use tools that fit their needs, even if not part of an integrated desktop, over integrated offerings. 

With recent advances in network speed and scale, flexibility in software design, cheaper memory and more nimble data storage technology, the goal of mixing and matching various systems is becoming a reality. In essence, significant investments are being made by both large financial institutions and niche software providers for the sole purpose of allowing advisors to plug-and-play different software solutions (some of which they may already use) into “their” advisor workstation.  In addition to this trend, the concept of embedding workflow into the workstation to facilitate a seamless experience in-and-out of different tools is a core component of the workstation and key to driving user adoption. 

Click on the image below for ActiFi’s Four Levels of Integration definitions.

Why You Should Care About Integration

For independent advisors, pursuing an integrated advisor workstation may no longer mean having to replace their entire technology stack with the limited offerings available to them in an integrated workstation.  Instead, these advisors can take a pragmatic approach to swapping out their technology or better yet, integrate what they already have into a vendor-facilitated integrated solution. There are many vendor ecosystems forming that bring together a variety of best-in-class capabilities and make them available to advisors. These include Orion, Redtail, Appcrown/Salesforce, Envestnet/Tamarac, Microsoft Dynamics Overlays (Salentica/Galeforce, etc.).

With best practice workflows embedded in the solution that can be conformed to an advisor’s unique needs, advisors can finally get some efficiencies while using best-of-breed solutions that fit their unique value proposition. 

For financial services firms, the number of vendors that can provide scalable and enterprise-ready solutions for different components of an advisor’s workstation has grown.  In essence, the business technology group should be in a position to bring more choice to the end advisors as opposed to waiting for a single vendor or internal information technology to provide a solution.  In addition, most vendors within the financial services space are open to, or already have built, integration capabilities.  This trend should allow financial services firms to expedite the delivery of an integrated solution with constrained choice to their end users.

What You Should Do About Integration

At ActiFi, we believe that open architecture solutions will outperform closed architecture (e.g., everything running on a computer/server inside the walls of a firm) over the next decade. If you want a historical parallel in the financial services industry, look at what happened with investment products.  Over a period of 10 to 20 years, the closed architecture approach (companies with captive sales channels exclusively selling products created by the company) almost completely disappeared. In addition, the companies that adopted open investment product strategies prospered. The same transformation is happening with technology integration. 

Even though your software itself continues to do a great job for its defined purpose, it may be time to move toward a more open system. Ultimately, what most users want is the flexibility to choose the software applications that fit the way they do business best and have applications magically communicate with every other software application they use. 

Advisors should not and can’t generally afford to be in the software integration business; they need to leave that to software companies or their technology partners at the financial services firm of which they are affiliated. The good news is that there are many ecosystems forming where the vendors are doing exactly that. 

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