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Practice Management > Marketing and Communications > Social Media

Keeping Up With the Robo-Race

By Melanie Waddell

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Efforts to help advisors beat back potential competition from robo-advisors continues this year with two recent offerings—one born of a collaboration between Vanare and NestEgg Wealth, and another from social media company Hearsay Social.

Technology platform provider Vanare acquired in late December NestEgg Wealth so the two could offer what they say is the first-ever platform that integrates robo-advisor and traditional wealth management services—freeing advisors from choosing between serving their clients and competing with robo-advisors.

Richard Cancro, Vanare’s co-founder and CEO, told me in a recent interview that the platforms used by robo-advisors are “stand-alone and only support the online advice channel,” requiring advisors to use one set of technology for their existing business and another set of technology for their robo-advice offering.

Vanare, however, “has one platform that supports both the advisor’s online robo-advice and their traditional business.”

By putting together Vanere’s wealth management technology platform and “deeply integrating” NestEgg into that platform for online advice, an advisor on one technology platform—customer relationship management (CRM), client onboarding activities, client reporting and portfolio management—can now manage both an online channel as well as a traditional channel, Cancro said.

Vanare and NestEgg, a private-label online wealth management platform, are “integrating all the disconnected wealth management processes into one powerful and scalable platform that focuses on the advisor and client experience,” he said.

Vanare’s platform has $1.5 billion of combined assets, and “the client base is growing quickly,” Cancro said.

Alexey Sokolin, NestEgg’s founder and Vanare’s chief operating officer, said the traditional wealth management platform requires putting together a proposal for clients on paper that’s then printed out in a glossy PDF. Now it can be “pointed through a robo-advisor channel” via the platform, allowing individual investors to engage more easily with the advisor. “The traditional and the online business are driven by the same technology underneath,” Sokolin said, making it “seamless” for advisors to participate in the robo-advisor movement “and not duplicate a lot of the work.”

The “magic” in the Vanare platform, said Cancro, is that the advisor can control “how they want the experience to be for themselves internally, as well as with their clients or prospects.” The overall platform, he said, is built for the advisor or the client to use and “work together—that’s probably the most important point.”

If an advisor wants to onboard a traditional client in the traditional way he can do so, Cancro said, but the advisor can also choose, by individual client, to onboard them online, “so the client can self-serve themselves and create the relationship.”

Appropriate for All Advisors?

Should all types of advisors—large and small—be worried about competing with robo-advisors? Cancro said that while having a more interactive and collaborative online experience is a “must-have for any type of advisory firm,” that doesn’t mean every type of advisor needs to offer online advice.

Deciding whether to offer online advice depends on the firm and the client base that the firm is targeting, he said. “The world has changed for advisors to create a much more dynamic experience for the advisor and client. Historically, advisors have had fairly flat, not particularly interactive websites; now […] depending on the advisor, they can let the client play with their portfolio and update their financial plans and goals much more interactively.”

Online advice is still a “very narrow product,” but the acquisition by Vanare of NestEgg is “exciting,” added Sokolin, because the Vanare platform goes a step further in the robo-advice realm by marrying “a deep institutional platform and then [offering] the forefront of innovation on the advisory side.”

NestEgg Wealth “started out as a direct-to-consumer company and quickly realized that we wanted to work with advisors” to allow them to serve “that much larger market of existing relationships,” Sokolin added.

Tech guru Joel Bruckenstein, founder of the Technology Tools for Today (T3) conferences, said there are “numerous” robo-advisor type platforms for advisors today—from new firms like Jemstep and ORANJ, to more traditional firms like Orion. “The list seems to grow every day,” he said.

Hearsay Social’s Offerings

Hearsay Social entered the robo-advisor space in mid-February with its “Predictive Social Suite” for advisors. The suite, Hearsay said, allows advisors and insurance agents to identify multichannel client “buying signals,” which Gary Liu, Hearsay’s vice president of marketing, said includes life events such as engagements, births, marriages and home purchases across those channels.

The Predictive Social Suite gives advisors “predictive notifications based on these ‘signals’ and the information shared by their customer connections and activities across social media and other digital channels, including an advisor website.”

These “cross-channel signals” enable advisors “to reach out to those specific individuals at the right time with the right message while maintaining compliance with corporate policy and regulations,” Liu said, allowing advisors to provide better, more personalized service to their clients and prospective clients while deepening those relationships.

Advisors are bombarded by robo-advice websites and disruptive consumer technologies that threaten their ability to stay relevant and connected to clients, especially millennials, Hearsay said.

The Predictive Social Suite is built on the Hearsay Enterprise Platform that enables advisors to “‘hear’ and ‘say’ from a centralized advisor dashboard,” said Liu. The “hear” component, he said, provides advisors with those cross-channel signals and notifications based on a client’s activities across social networks, an advisor’s website and other interactive digital channels, “thereby providing deeper insights to best serve that client.”

The “say” component allows advisors to share and publish timely and relevant content from the Hearsay Content Library across those same channels “to reach their local audience and stay top of mind,” he added.

The suite also includes Hearsay Sites, which the company calls a “responsive, mobile-first website solution” that allows advisors and agents to easily post tailored content to their websites from the same unified Hearsay Social dashboard they use to manage social media engagement.

The goal, according to Hearsay, is to provide “intelligent Web analytics” that will allow advisor users to gauge site visitors’ interest in specific products or services, the company said. Hearsay Sites also comes with built-in search engine optimization (SEO) and profile management that it says integrates with enterprise-wide compliance.

Clara Shih, Hearsay’s CEO and founder, said that more than 100,000 advisors using Hearsay Social’s flagship social media solution told the social media firm that while “social is essential, […] the social channel alone is not enough to keep pace with today’s multichannel customer.”

Hearsay, she said, will continue to “double down on our core social offering while expanding to offer a complete suite of technologies to help relationship managers compete and win against the onslaught of disruptive technologies. Not only are social, mobile and Web now ubiquitous, consumers increasingly rely on these digital engagement channels to discover and make buying decisions regarding financial products and services.”

Shih said that studies have found that more than 40% of high-net-worth individuals under the age of 40 cite social media as important for accessing information on financial products or services.

While there’s a plethora of robo-advice offerings entering the market today, advisors would be well-served to sift through the various offerings to figure out which one is best suited for their needs.

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