After 12 years at Schwab in various leadership roles, including Advisor Technology Solutions and Schwab Performance Technologies, Neesha Hathi recently moved to the firm’s retail business. However, as executive vice president of investor services, she hasn’t completely cut ties with RIAs. She leads Institutional Intelligent Portfolios, the RIA-focused counterpart to Schwab’s digital investment platform.
“I get to work on both the retail offering for Intelligent Portfolios, as well as make sure that we continue to enhance it based on what advisors need so they can leverage the platform,” she told Investment Advisor in April.
Clients’ expectations for how they interact with their advisors has been changing, Hathi said, and “advisors are doing a great job nowadays embracing that change.”
For example, they expect service on a much shorter timeline; advisors who are still doing quarterly performance reviews are not meeting those needs. Investors want a “much more dynamic experience,” she said. “They live in the world of Amazon and Uber, so having a personalized relationship that’s not just local but also virtual, having access to their advisor and their information anywhere they want to, any time they want to” is critical.
Technology is an important tool helping advisors provide that level of service in a scalable way, Hathi said. “Technology not only helps the client experience, and they get all these features around mobility and access and relevance, but [it] also helps the advisor deliver” what clients are looking for.
With its Intelligent Portfolios offerings, Schwab clearly sees robo-advisors as a complement to traditional financial advice rather than a threat. The platforms reached $6.6 billion in assets as of March 2016, just a year after being launched.
“We absolutely believe that it’s a mix of technology and people that will drive a great outcome for investors and advisors,” Hathi said. She noted that when she started in the business, most of the technology that was truly helpful to advisors was limited to the back office. As digital platforms started taking off, “all of a sudden you had advisors who were catalyzed to pay attention to the fact that some of this back-end infrastructure could be automated in a much more seamless way,” she said.
Early uneasiness about what robos would do to the RIA space was quickly replaced by enthusiasm for what it could do for it. “They figure, ‘There’s this great technology platform that allows me to scale my business and serve clients that maybe I wouldn’t have been able to serve before because they were below my minimum or weren’t my target client,’” Hathi said. Integrating automated processes and personal interactions allows advisors to spend their human capital on more complex parts of their business like prospecting and serving sophisticated clients.
The practical steps to implementing that technology can be daunting, though, especially for small firms without a large IT department helping them. “When you’re a small business, it’s not like you can just try implementing something and if it doesn’t work throw it out the next day,” she said. “You have to invest a lot of time and energy and resources and get your team engaged and go through conversions, so you want to do your due diligence and make sure […] it’s really solving a problem” that exists in the firm before investing in the latest technology.
She encouraged advisors to identify the “biggest pain point” in their offices and get senior leadership “committed to embracing technology to solve that particular challenge.”
“Sometimes it’s better to tackle those one by one than do too many at the same time. It’s easy to jump on something and then find, ‘Wow, that didn’t solve my problem,’” she said.