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Staying Out of the Technology Penalty Box

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“Advisors used to be able to avoid the penalties associated with being late adopters of technology; however, that is no longer the case,” said Joel Bruckenstein, industry technology guru and publisher of the T3 series of newsletters and conferences.

Bruckenstein was leading a special technology session at the Shareholders Service Group (SSG) conference last week in sunny San Diego that consisted of 16 leading advisor technology companies providing a series of “TED” talks on the latest industry trends, opportunities and innovation headed the industry’s way.

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“Consumers today expect their financial services provider to deliver the latest technology, and if you as an advisor are not, the chances of you surviving are not looking good,” Bruckenstein warned the 300 attendees.

The good news, according to Bruckenstein, is that advisors are stepping up their investments into new technology to stay current. Citing the results of a recent SSG survey, the No. 1 category for new investments by advisors this year is in technology.

Teeing up the technology TED talks, Bruckenstein gave his best advice on how to evaluate the many new products, platforms and vendors focusing on developing the key tools, solutions and resources to help advisors run a better business.

“Before any technology purchase, you need to have a strategy for what you are ultimately trying to accomplish,” he said. Key questions to ask vendors, according to Bruckenstein, are what level of integration the new system will have with your existing technology as well as with your custodian. “You should determine what integration actually means,” he advised. “A simple file download or single sign-on is not integration these days. True integration is when data is seamlessly passed back and forth and can update records in connected systems.”

Bruckenstein also urged advisors to do a security review of their new system and to not rely purely on demos. “To truly evaluate a system, you need to get ‘hands on’ experience in order to get a good understanding for its capabilities and how you will use it your business.”

Following Bruckenstein’s opening remarks, 16 leading vendors presented rapid-fire TED-style talks on a wide range of advisor technology and industry issues.  In a twist to most conference technology sessions, Dan Skiles, president of SSG, designed the session to be more thought provoking and inspirational, rather than just a series of demos. This format was well received by attendees as the tech executives provided key insight from their point of views as technology developers on how the industry is changing and how technology will change the way advisors deliver advice in the future.

Key themes addressed during the talks were the big disruptive forces impacting the industry today, such as the coming fee compression driven by low-cost, digital advice platforms (robos), changing government regulations like the DOL fiduciary rule, as well as shifting consumer expectations.

Many of the providers described how these industry forces would require advisors to alter their business models to succeed. Top of the list for pretty much all of the speakers was the “Amazon-ification” of how consumers now expect to get what they want, when they want on their device of choice simply with the swipe of a finger.

Financial planning software firms such as Advicent, MoneyGuidePro and eMoney extolled the benefits that collaboration tools such as a client portals can have by engaging clients in the planning process, further cementing relationships and developing loyalty.

Process automation to drive efficiencies in advisory firms as well as to enhance the client experience was another key theme. Providers of CRM platforms, document management and forms filling systems, such as Junxure, Redtail, Laserfiche and Laser App, discussed ways to use automated workflow technology to streamline the new client onboarding process, removing manual steps and paper processes, and vastly shortening the time it takes to open new accounts.

New technology also holds the potential to extend advisors’ footprints beyond their typical communities, removing geography as a barrier. More and more of advisor’s interaction with clients will be done remotely, as younger clients typically do not want to have to travel to advisors’ offices for meetings. ScreenMeet, a new digital screen sharing and online meeting platform, is developing compliant ways to facilitate remote meetings online, with no links or downloads, making the process quick and easy.

Developing advisor trust was another key theme that technology can help with. SS&C’s Black Diamond showcased how accurate, consistent and transparent reporting can build trust over time

Other leading tech providers who presented TED talks were included Morningstar, Asset-Map, True North Networks, YCharts, Advent, Oranj, Trade Warrior and Broadridge Advisor Solutions.

To learn more about the technology content at the SSG conference, check out the many tweets on the #ssgconf hashtag on Twitter.

— Read Alts Platform iCapital Opens to Accredited Investors: Tech Roundup on ThinkAdvisor.