As broker-dealers face increasing consolidation and pricing pressures, technology has emerged as a way for firms to add scale and efficiency.
However, reps no longer see technology as a value added to a potential broker-dealer’s other offerings, they just expect it – so much so that the winners of this year’s 2017 Broker-Dealers of the Year aren’t even talking about technology when recruiting new advisors.
(Related: Keeping Up With the Bullish Tech Market)
Click here to see all our 2017 Broker-Dealers of the Year coverage and learn what leaders at these firms are doing about the DOL fiduciary rule, cybersecurity and more.
Janet Levaux, Investment Advisor: How important is technology when you’re talking to prospective advisors or when you’re talking to advisors that you know are likely to leave? What do you tell prospects? What do you tell existing advisors?
Ryan Diachok, Geneos Wealth Management: Technology matters. It boils down to efficiency. When you’re talking to somebody who’s at another firm looking to join your firm, it’s, “How am I going to run my business?” We know these independent advisors, they all run them a little differently. They have their own nuances: the products they use, the platforms they like to use.
Amy Webber, Cambridge Investment Research: It used to be that the table stakes were “Answer my call. Process my compensation accurately. Don’t lose my paperwork.” The servicing issues had to be there, and technology was value-add. As far as I can tell, technology is now on the side of servicing. It has to be there.
Lon Dolber, American Portfolios Financial Services: Yeah, you have to have it. But you know what’s funny about it? I never talk about technology when I recruit.
Webber: They just assume you have it, I’m sure.
Dolber: I never talk about it. I talk more about our Lean Six Sigma approach. Right now we have 36 lean Six Sigma projects going on where you look at what you’re doing: Is it as efficient as it can be? Does it serve the client? Because if it doesn’t serve the client, it’s not important.
I very rarely talk about the technology with the exception that I might say something like, “You know, I’ve got to use this stuff, too, because I have a book of business.”
Diachok: I agree because I think, Amy, you’re spot on. That is just an assumption that you’re going to have efficient technology. But it generally goes when you get into the transition period of a recruiting phase. Then there’s a deeper need for the knowledge of what are the systems, how does it work, how do we scan things.
Dolber: You know what I tell advisors with the transition? I tell them it’s going to be horrible. I tell them, “Don’t leave your brokerdealer if you don’t have to.” There’s got to be a good reason [to leave] because making a change is destructive to your practice. It’s destructive to the investors, to your clients.
The worst thing is if somebody comes to us and we’re not the right fit. We have a 28page confidential questionnaire. Even FINRA is like, “Are you kidding?”
I’m not making any mistakes. I don’t want to make a mistake and I don’t want advisors to leave.
Webber: Yeah, we do that too. You’re Lean Six Sigma; we have Lean and Six Sigma certified.
Dolber: I’m impressed. You got certified.
Webber: We are. We have a couple of black belts, but we’ve got a green and yellow belt in every department. They are doing huddle boards every day all over the company and we are saving millions of dollars.
Dolber: I think 50 of our employees are yellow belts and about five are green belts.
Webber: At some point it becomes a part of the culture of the organization. Eric [Schwartz, chairman and former CEO of Cambridge] likes to see the numbers: “Tell me how much we’re saving.”
I have to explain, “Let’s look at it this way. We brought in $80 million in new revenue last year and we didn’t hire any more than we had when we brought in $40 million. We got a nine out of 10 and we got BrokerDealer of the Year and so on.”
I don’t want people to have to spend their time documenting every penny they’re saving because of events. I just want them to have the psychological conception that what they’re doing doesn’t make sense. “Am I taking too many steps? Can I eliminate anything?”
Dolber: What do you use? We use Salesforce for all of our ticketing. Every single conversation is ticketed. If you don’t have metrics, how do you know that you have process improvement?
Webber: We have Dynamics, but Salesforce is out there, yeah. Its conversions are not fun.
Dolber: Salesforce is a challenge. I can tell you it’s not easy and it’s not out of the box. It requires a lot of configuration. There’s also a lot of resistance to get everybody to ticket.
— Read Opening New Accounts Is About to Get a Lot Easier on ThinkAdvisor.