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Financial Planning > Behavioral Finance

Advisor Software to Offer Robo-Advisor Within Salesforce Cloud

By Emily Zulz

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Could robo-advice become as universal as ATMs?

Erik Jepson, chief customer officer at Advisor Software, thinks so. And he thinks this will happen relatively soon.

“We believe digital advice or robo-advisors will be as ubiquitous as ATMs in two or three years,” Jepson said during a visit to ThinkAdvisor’s New York office. “Almost everyone will offer one. I think you’ll be surprised, even family offices, ultra-high-net-worth-focused institutions are going to have variations – more sophisticated variations – but variations nonetheless on robo-advice platforms.”

In fact, Advisor Software is well on its way to helping this become a reality.

Jepson says “shortly we’ll be coming out with a white-label robo-advisor” through Salesforce’s recently launched Financial Services Cloud with the goal to give a lot more advisors the opportunity to offer robo-advice.

Salesforce officially launched its Financial Services Cloud, first announced in August, on Tuesday. Advisor Software was one of Salesforce’s three original strategic partners, along with Yodlee and Informatica, to help provide interconnected applications inside the financial services cloud. Salesforce has since added a dozen more partnerships, including DocuSign to provide electronic signature technology and The Athene Group to help with account opening and data aggregation.

“The Financial Services Cloud is a reimagining of Salesforce CRM specifically for the financial services industry,” Jepson explained. “So they completely restructured their database so that it is aware of the types of things that are important to the financial services ecosystem. The notion of an account being a financial account, rather than a relationship I have with a contact like the traditional CRM says.”

The white-label robo-advisor that Advisor Software has developed for the Salesforce Financial Services Cloud will offer something to both clients and advisors. Other white-label robo-advisors in the market today include Betterment Institutional; Jemstep, which was recently acquired by Invesco; and FutureAdvisor, which was recently acquired by BlackRock.

According to Jepson, the original crop of robos were designed solely for consumers, so “they are somewhat limited in their utility to advisors.” Advisor Software’s robo was designed more as a hybrid advisor-consumer solution right out of the gate, he said.

This client-facing aspect of Advisor Software’s robo-advisor will allow for an automated account opening process. Clients will be able to fill out a risk questionnaire, select one or more goals, be mapped to an optimal investment portfolio and then connect to DocuSign for account opening. Clients will also be able to monitor their investments, add additional goals, as well as integrate with Yodlee to link all of their asset accounts.

Meanwhile, the advisor-facing aspect of the robo-advisor will allow the advisor to monitor their digital advice customers through the Salesforce CRM platform. The robo-advisor will also integrate with Advisor Software’s other new application within Salesforce, “Portfolio Rebalancer,” which is a portfolio management application for advisors.

Anyone that uses the Salesforce Financial Services Cloud will be able to offer this robo-advisor, Jepson said. It also gives advisors a lot of flexibility in terms of what they want to offer, he added.

“A lot of the white-label robo-advice solutions on the market today can only handle ETFs, for example, but we’ll allow – you can use individual stocks, mutual funds, managed accounts – really any product,” Jepson said. “Actually a client of ours in Singapore is using structured notes. So we have the ability to be very, very flexible in terms of the underlying investment products that the advisor can choose from.”

Advisor Software will also offer flexibility in terms of whether the advisor wants the solution to be risk-based or goal-based and whether he or she wants account aggregation or not.

“All of that can be configurable based on the advisor’s view of the world,” Jepson said.

Jepson said the user interface is customizable so the advisory firm can go in and change the colors to suit their own brand colors, add their own logo and add their own disclosure language.

Advisor Software has been building robo-advice (or “digital advice”) applications since it was founded in 1995. In the ‘90s, it built a personal financial management (PFM) application for a startup at the time called myCFO, since acquired by BMO’s Harris Private Bank.

In 2000, Advisor Software built what it calls “the first consumer-driven web-based robo-advice application” for ShareBuilder, which is now a part of Capital One.

A year later, it built an automated managed accounts platform, which acts as an advisor-driven digital advice platform, for Amerivest, now a part of TD Ameritrade.

Today, Advisor Software is “very actively engaged” in helping large financial institutions build their own branded robo-advice applications, Jepson said.

While Jepson couldn’t name most of these institutions because they haven’t been launched yet, he did confirm that TradeKing uses several of Advisor Software’s application programming interfaces (APIs) in its own digital advice solution and Russell Investments also actively uses Advisor Software APIs.

Returning to the idea that robo-advisors will become synonymous with ATMs, Jepson said Advisor Software has a client that is even considering offering a typical robo-advice lead gen process through an ATM machine.

“You’d go to your ATM, you’d essentially be offered a series of questions, you’d have to use the numeric keypad to guide though your answers, but then be presented with a model portfolio, you could make  a choice to invest, a new account gets generated automatically,” he explained. “You could set up an investment directly from let’s say your current account.”

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