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Advisor Group Selects Jemstep to Build Integrated Tech Platform

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Advisor Group announced on Tuesday that it is building a new technology platform for its affiliated advisors to bring many of the capabilities consumers expect from robo-advisors to a traditional advisor’s business.

Jemstep is building the platform, which will fully integrate with Pershing and Envestnet, the custody and TAMP providers for Advisor Group’s network of advisors.  

(Related: Advisor Group Grabs Cetera’s Chief Legal Officer, Appoints New CFO)

Advisor Group has a long-standing relationship with Jemstep, according to Jamie Price, Advisor Group president and CEO. “They started as a direct-to-consumer robo platform but quickly morphed into an advisor-facing robo platform,” he told ThinkAdvisor on Tuesday.

The firms have been working together on the new platform for about seven months, he said, and expect to release it to advisors in the fourth quarter.

Matt Schleuter, EVP and president of wealth management solutions for Advisor Group, said offering a simple robo-advisory tool directly to consumers would be a “big miss” for the firm by cutting out its current customer base.

“We wanted to bring those products out to make it available to all of our customers so that they can benefit from these services,” he added.

“We did not build an off-the-shelf, to-the-side platform,” he said. “It is fully integrated into our ecosystem in order to get the greatest amount of efficiency.”

The new platform will help advisors reduce paperwork by onboarding clients and opening new accounts through an entirely digital process. Advisors can use any web-enabled device to access the platform, which will support a broad selection of advisory and brokerage solutions from Advisor Group.

The platform will also have integrate with Jemstep’s Advisor Pro digital advice solution, which can be customized as a branded offering available through the advisor’s website.

End clients will get access to a mobile-optimized web portal where they can see their portfolio information and performance reports, as well as transfer assets from other institutions using e-signatures.

Advisors and clients will get a consolidated view of all their assets, including those at other institutions.

Advisor Group, which comprises FSC Securities Corp., Royal Alliance Associates, SagePoint Financial and Woodbury Financial Services, serves more than 5,000 advisors with approximately $160 billion in client assets.

The new platform is a way for Advisor Group to support a “traditional client-directed, more robo-ish experience,” Schleuter added, while facilitating a more important aspect of advisors’ business that he calls “advisor-led onboarding.” That means allowing advisors in the group’s current core business lines “to engage the client digitally using those same robo tools” clients expect from consumer-facing robos, such as aggregation, e-document and e-signature capabilities, and electronic onboarding.

Price noted that the platform is part of a bigger strategy to take advantage of the efficiencies technology has to offer without limiting the relationship aspect of an advisor’s business.

“Technology in the investment space, and clearly the independent advisor space, has outpaced the adoption rate inside the industry,” Price said.

Despite the rapid growth in the robo-advisor space, most of the wealth in the United States is still controlled by an advisor or intermediary, he pointed out. Technology can be much better leveraged by supporting the relationship between an advisor and a client, according to Price. “To do this off-the-shelf or direct-customer relationship, much like the robos have done, would be a big miss,” he said.

“It’ll end up that we’ll have a direct-to-consumer capability if our advisors so choose to use it with parts of their clientele, but it wasn’t the core of what we thought was important.” Advisor Group is using technology “as a weapon in our core business,” he said.

Price pointed out that the robos themselves have started to shift away from offering strictly automated advice and are providing more advisory services. “They’ve peeled away as much as they can” in terms of investor assets, he said. “We think it’s a much bigger opportunity to start in the other direction and say, ‘How do we leverage these tools and technologies of our core business?’”

The new platform will be in “various stages of development” by the end of 2017, Schleuter said. “It’ll be staged across certain product lines through the end of the year. We believe there are probably some other business lines we can further build some customer journey to further augment into an additional experience.”

“We could have chosen the path that many of our brethren have chosen,” Price said. “We could have made that decision pretty quickly and decided to [offer] a robo — off-the-shelf, turnkey, ready to go, not integrated — much, much easier and quicker. Strategically, that wasn’t aligned with where we thought the biggest opportunity was for our business and our advisors.”

— Read No Robo-Advisor Will Ever Truly Master Client Service on ThinkAdvisor. 


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