Fintech providers need to find a balance between what’s new and what works, eMoney Advisor’s new CEO Ed O’Brien said at the eMoney Advisor Summit on Wednesday.
“Innovation is great” when it’s fast, he said, “but it has to be precise and accurate” to help advisors remain compliant in such a highly regulated industry.
Drew DiMarino, head of sales for eMoney, noted at the conference in Orange County, Calif. that, since 2010, $50 billion has been invested in fintech companies.
“Fintech is exploding,” he said, and to that end, eMoney hosted a hackathon on Wednesday where advisors and eMoney developers got together to build a prototype for new technology. The winner of the hackathon will be announced Friday.
But O’Brien said although a wave of integrations in the industry is driving advisor productivity, simply counting the number of integrations a firm offers isn’t enough to distinguish it as a tech-driven firm. “Most advisors are now telling us that it’s not the number, it’s ‘What does that integration do? How does it make me a better advisor?’” he said.
He added there are 30 integrations on eMoney’s emX platform and “20 of them are select integrations that are really deep integrations.”
O’Brien said, “We want to make sure we have the right” technology partners, “but from there, how we think about the workflows that are integrated, the touch points and the next generation, that’s all coming directly from our client base.”
There are 40,000 users of eMoney, O’Brien said, and about 20% or 25% are taking advantage of those integrations. “We don’t have a lot of single-sign-on integrations anymore and that’s not the path we’re going to take.”
As an overall philosophy, O’Brien noted, “Planning-led advice is probably the future of this business. Leading with performance probably isn’t” how advisors will interact with clients in meetings in the future.
Joel Bruckenstein, publisher of Technology Tools for Today, spoke with O’Brien on stage at the summit. O’Brien joined eMoney Advisor in March. He was honored as one of Investment Advisor’s IA 25 in May.
Fidelity acquired eMoney Advisor in 2015, and is the majority owner of the firm, O’Brien said. He added that he left Fidelity, where he was head of platform technology, for eMoney to focus on developing planning-led advice tools.
The average employee age at eMoney is just 27, O’Brien said. “I feel like I’m working with my kids most days,” he joked, but “the digital natives are a different generation and you need to be responsive to that,” he said.
Bruckenstein noted that some advisors, especially at smaller firms, have concerns about technology that is customizable at the expense of efficiency.
“Ask yourself if [customization] is really driving value in the relationship with you and the client,” O’Brien said. “If the answer is no…you definitely have better things to spend your time and energy on.”
Who Owns Data?
Regarding account aggregation, Bruckenstein asked, who does data belong to?
“There seems to be some question, both legal and from a contractual standpoint, around whose data is it and who should have access to it,” Bruckenstein said.
O’Brien said most customer agreements probably say data belongs to the end client. “Is this industry ready for a wave of governance around data?” he asked. “I think yes.” Data has been freely passed around the industry, he said. “What happens when the client leaves you or you leave eMoney? I would fall back to it’s that client that owns it.”
Bruckenstein noted that advisors have the “high ground” in the data ownership argument, and urged advisors to speak up on behalf of clients to representatives in Congress and regulators. He referred to medical records, which weren’t owned by patients until an executive order gave them access. “We need the same kind of action on behalf of our clients when it comes to data,” Bruckenstein said.
At eMoney Advisor, data aggregation’s “single purpose” is to make it easier for a client to work with their advisor, O’Brien said.
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