At LPL Financial’s yearly conference in Boston this week, CEO Dan Arnold and other executives have kept advisors (and reporters) on their toes with a series of important technology-related announcements.
Monday’s news focused on a new mobile app for clients with a rollout planned for 2018 and a team of virtual assistants that would help advisors as needed. On Tuesday, the independent broker-dealer said its robo-offering, Guided Wealth Portfolios, will be rolled out starting in mid-August.
The virtual assistants could be used “any way that that advisor would leverage a traditional assistant,” according to Arnold — for opening an account, processing paperwork and responding to client requests. These aides are set to work with live staff based at LPL’s main campuses.
But at least one technology specialist is raising some concerns about such a plan.
“I’m 50/50 on this one,” said Bill Winterberg, a certified financial planner, via Twitter on Tuesday. “While I applaud efforts to work efficiently, bifurcating the client’s service experience doesn’t seem ideal to me.”
Given LPL’s size — with more than 14,000 affiliated advisors — the introduction of such shared technology-based services is worth paying attention to, he points out.
“They are a bellwether for the industry as the largest group in the independent broker-dealer channel,” Winterberg, the founder of fintech website FPPad, said in an interview with ThinkAdvisor.
Aren’t many individuals used to dealing with automated phone calls mixed with live customer-service representatives when dealing with phone bills, credit cards, cable entertainment and the like?
“Yes, but there’s a caveat to that,” Winterberg said. “As a client, I pay a premium” for financial services that include an advisor “and for that I should get a pretty premium relationship experience.”
Clients who don’t want a premium relationship with premium service, he adds, can turn to Vanguard or Charles Schwab for more automated advice. Fees for such services are around 30 basis points vs. 90 to 100 for advisor fees.
Investors paying the higher fees “don’t want to get tossed around, with a random person picking up the phone,” and that’s why they chose to pay more to work an advisor, adds Winterberg.
“I get the efficiency benefits [of virtual assistants]. But, for client experience, you don’t want to treat the financial advice relationship like the one with Comcast or an internet service provider, for instance.”
What about the idea that virtual assistants could be a net positive for advisors by handling some of their office busy work?
Their use might allow “existing staff to focus on more relationship-based activities without [the need for] additional headcount,” said Matthew Enyedi, executive vice president of RIA and high-net-worth solitions for LPL, on Twitter.
When it comes to advisors who are solo practitioners without administrative staff, the virtual assistants “could be a great fit … and could be a great resource [to provide] more service … at the right price for these advisors, who then would not have to raise their rates by leveraging this technology,” Winterberg acknowledged.
Sean Kernan, principal of 360 Wealth Management in Dallas, says a rough estimate of LPL advisors that work via solo practices is within a range of about 25-30%.