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November 27, 2017 at 07:00 PM
Regulatory matters may have dominated industry headlines for much of the year, but cybersecurity and technology issues had their fair share of the limelight. This year, more robo advisors came to life, along with a variety of mobile applications and social media tools.
The use of artificial intelligence made more inroads into financial services, with LPL Financial announcing its work on virtual assistants. Plus, a series of data breaches announced by organizations like the IRS and SEC — along with Equifax — raised concerns for investors, advisors and others.
For insights on recent fintech news and IT trends overall, Investment Advisor turned to a dozen industry leaders — who shared their views on the top innovations of 2017, as well as what lies ahead for the field in 2018.
John Burmeister
President & COO, Lion Street
Biggest news of the year:
While it has not been impactful to the industry thus far, the potential for artificial intelligence is quite great; it’s a topic that has been consistently highlighted at conferences I’ve attended. There have been ongoing advancements in predictive analytics, and this area is one in which I believe financial companies will need to adapt.
Thoughts on the Equifax breach:
The Equifax breach validated the internal decision we had made on protecting our firms. The amount of data that is at risk is astounding: 143 million people potentially impacted. I’m disturbed that a company that collects private data could find itself in this predicament. Even more frightening, what breaches are yet to be uncovered. This reinforces the need for all of us to be proactively vigilant.
Top achievement of 2017:
Late this year, we began evaluating solutions to help protect our firms and their clients from cyber risk. We are close to rolling out technology that our firms can use to run a health report on their devices (desktops, laptops, phones, tablets) and make certain they are compliant with our cyber policy and keep their clients safe.
Focus for 2018:
We will be offering new cybersecurity solutions to our firms, as well as rolling out new day-to-day tools our advisors will benefit from such as more improved and efficient commission processing. We are also focused on proactive inforce policy management of variable and fixed life insurance policies.
Favorite tools:
Our platform is designed within Pershing’s NetX360. It serves as the hub for supervision, document management, Envestnet’s advisory platform, workflows, and all other aspects of an account’s life in an integrated system. We work closely with these service providers to continue making advancements that serve our advisors’ needs. Personally, I really like apps like Pennybox that help children learn about the importance of saving and give them a financial foundation.
More thoughts:
When you consider how fast this area has evolved and the speed at which it continues to progress, I think there will be a stronger need for holistic financial advisors. We will continue to monitor client needs and adopt systems to meet their expectations. We have positioned ourselves to offer the best tools for our advisors to do exactly that.
Vin Campagnoli
Chief Information Officer, Raymond James
Biggest news of the year:
Reflecting on 2017, the DOL — and its impact on technology — was obviously significant. But while we addressed those requirements, we continued to develop new and enhanced tools for our financial advisors’ platform, called Advisor Access, with particular emphasis on cybersecurity, mobility, account aggregation and process efficiencies.
Thoughts on the Equifax breach:
The Equifax breach is one more reminder of how diligent we must be in protecting data: why we must follow best practices in the area of cybersecurity and reinforce those steps with our advisors daily, so their data and their clients’ data remain safe.
Top achievement of 2017:
We’ve had a very productive year, but one tool that has been universally popular and even award-winning is the Advisor Mobile platform we delivered to advisors — allowing them to be comprehensively connected with clients — anywhere, any time.
Focus for 2018:
We are focused on several areas concurrently, but one that is exciting is the development of our wealth management technology. We are building a suite of centralized tools to streamline the investment planning process by providing a flexible and repeatable approach to help advisors meet their client’s needs. The first phase of this initiative includes our recently launched Product Catalog application.
More thoughts:
What has historically set Raymond James apart from other firms is our commitment to developing technology for advisors by advisors. We always invite input from our Technology Advisory Council (16 financial advisors) and value their insights at all stages of development. Our platform has truly been designed, tested, improved and honed by and for advisors.
Ron Carson
Founder & CEO, Carson Group
Biggest news of the year:
When I think of “significant” news, I think of factors like influence and reach. With that in mind, this year’s noteworthy news definitely was the Equifax breach. A financial firm’s ability to build great technology is dependent upon its capability to integrate and share data. In a world in which the largest holder of data is compromised, the big firms that fintech solutions need data from the most have stopped — or stepped back from — integration and access plans that lead to better outcomes for clients. Without this ability, the reliance of innovation goes back to large holders of data, which historically hasn’t led to the level of innovation and large-scale change that clients demand.
Most impressive development of 2017:
Quovo has done some amazing things when it comes to splicing data for the end client. Its technology is making leaps to connecting advisors and clients in a whole new way through their suite of fintech application program interfaces (APIs). How an advisor leverages and presents data to their client is fast becoming a reflection of their brand, and Quovo is making some interesting advancements in how information and data can be used to gather meaningful insights and enhance the client-advisor relationship.
(Editor’s note: Carson invested in Quovo during its Series A round of fundraising, according to Crunchbase.)
Thoughts on the Equifax breach:
With real risks of data breaches, firms are faced with two options: (1) paralysis in accepting the risk, which means being left behind the innovation curve, or (2) building out all safeguards possible to be well-positioned to move forward to thrive.
Top achievement of 2017:
By far, our most exciting achievement in 2017 was the launch of our end-to-end digital experience, and how it is not only reinventing the way clients can engage with our advisors but also providing an integrated dashboard demonstrating the lifetime value of the advisor.
The platform includes a risk-tolerance survey, digitized allocation tools, automated paperwork (enter the data once and never again), a proposal tool, real-time dashboards for both the advisor and the client, and most recently, an interactive annual review tool showing where the advisor adds value, as well progress towards the client’s financial goals.
Focus for 2018:
Every decision we make as a firm starts with the client in mind. Our focus in 2018 will take that mission a step further by enhancing the integration and capabilities of our end-to-end digital experience. We’ll also be launching an online offering/experience that gives our clients the ability to choose their engagement level, interaction level and service level. Our technology will allow for clients to move up and down the value chain as their needs change — and provide our advisors with the ultimate advantage: the flexibility to serve their clients where they are.
Favorite tool:
I’m never “on the clock” or “off the clock” as the CEO of Carson Group, so naturally my iPad is my favorite tool, piece of software, and device all in one. It’s the only piece of technology I need (along with my phone) to do my job.
More thoughts:
The large institutions in our profession will continue to push for innovation and be forced to acquire small innovative firms that possess products changing the marketplace. Large firms will control integrations with their platforms and also control the progress made without small firms making big bets.
John Connor
Vice President of Third Party Integration & Support, Schwab Advisor Services
Biggest news of the year:
Envestnet’s acquisition of FolioDynamix was a major news item this year. We also saw a significant deal with SS&C’s acquisition of Modestspark. These deals represent the trend toward comprehensive, one-stop solutions and outsourcing of portfolio management.
Most impressive development of 2017:
Solutions in the wealth management category was a key theme this year. Providers like eMoney, Addepar, and Riskalyze aren’t new, but they have cemented themselves as major players in the wealth management category and have become core tools of forward-thinking firms that are moving beyond the basics of investment management.
Thoughts on the Equifax breach:
Schwab has made and continues to make significant investments in security, and we’re extremely selective in choosing third-party providers. Advisors put tremendous trust in the security of our platform, and we never take that for granted.
Top achievement of 2017:
Schwab is in the midst of a digital revolution. We are carrying out a multiyear digitization strategy across everything we do, and we saw great progress on this front in 2017. There are many examples, but a couple that stand out include our digital check deposit capability, which is in pilot now, and the launch of aggregated account viewing on Schwab Alliance, our white label web and mobile platform that allows advisor clients to access their account information.
Focus for 2018:
In 2018, Schwab will continue transitioning manual and paper workflows to digital. We’ll make new digital capabilities available to advisors through our custody platform, Schwab Advisor Center, and through integrations with third-party technology providers. These investments are all about helping advisors streamline routine tasks so they can scale their businesses and serve clients better.
Favorite tool:
Salesforce is broadly used by the team at Schwab. We use it as a CRM and rely on the communication portals to interface with clients and third-party providers.
More thoughts:
Advisors are feeling optimistic about artificial intelligence and machine learning. It’s been a lot of talk so far, but we think that’s going to change, and it seems that advisors feel the same. This year, we surveyed 2,000 advisors on their expectations for AI, and 44% said they believe it will help drive business growth.
Lon Dolber
CEO & President, American Portfolios Holdings; President, American Portfolios Financial Services
Biggest news of the year:
I think the most significant advancement within the fintech industry for 2017 has been the use of artificial intelligence and cultivating an understanding of customer preferences through deep learning — the ability for machines to intake and interpret data and, in turn, provide relevant and meaningful solutions in the marketplace. It’s still not very prevalent, but it will be huge going forward.
Most impressive development of 2017:
Voice assistant technology, like Google Home, intrigues me. While, to my knowledge, it’s still in the R&D phase of development for the fintech industry, this type of technology could provide greater improvements and capabilities in scale and efficiency. If a computer can respond to my voice and do things for me, imagine how useful this technology might be in financial services and for the investment professional serving their clients.
Thoughts on the Equifax breach:
Clearly, the Equifax breach has been very disconcerting. Quite frankly, the government should hold credit bureaus to the same regulatory standards they do for the securities and broker-dealer industry when it comes to client privacy.
Top achievement of 2017:
The development of our client portal, which is part of our technology platform called HomePort, includes the opportunity to bring the client into the service model. We’re making it possible for clients to make changes that our advisors are comfortable having them do on their own, such as a change of address, reinvestment changes or check requests, to name a few. Doing so creates the scale and operational efficiency that both an advisor and we, as a service provider, need.
Focus for 2018:
We’re scaling up digital interaction with our investment professionals by making strides in the customer service area, such as improving service requests, ticketing and offering live chat as an option to provide support.
Favorite tools:
Outside of work, I use Google Home to control devices, such as my TV and music system. At the office, I’d say it’s our custom-built marketing automation system, which integrates five SaaS (Software as a Service) solutions for increased scalability and efficiency. It’s a digital marketing tool that launches and manages campaigns directed at our existing advisors to help them increase their business; and for the firm, it supports both recruiting efforts and increasing our brand awareness.
More thoughts:
I’m fascinated by the research being done in the area of hyper-personalization, much like what some major retailers are doing online to reach customers in a more meaningful way to build loyalty. I think the financial services industry should do the same, as this, ultimately, is a relationship business.
Joe Duran
Founder & CEO, United Capital
Biggest news of the year:
The biggest development is the hybridization of the robos led by Vanguard Personal Advisory Services, successfully blending technology with human advisors to approach $100 billion in assets under management. We’ll continue to see Vanguard, Betterment and others add humans to serve investors as hybrid robo platforms move forward.
Most impressive development of 2017:
IBM found financial services were 65% more likely to be targeted in a cyberattack than other industries. CleverDome steps in as a cybersecurity co-op including names like Redtail, Orion and just recently NetFoundry. CleverDome brings military-grade security to the equation to help protect such critical financial transactions.
Thoughts on the Equifax breach:
Data has become as important as money, but we’re not seeing businesses treat data like money. There has been a heightened awareness of data breaches, but most firms still see treat their data as a liability, instead of a valuable asset that not only needs protecting, but investing.
Top achievement of 2017:
It has been gratifying to watch the rapid expansion of our FinLife Partners digital wealth operating system. Advisors managing a combined $8.18 billion in assets have signed up for FinLife Partners less than two years after its inception.
Focus for 2018:
We want to engage with our clients at their convenience, not ours. When we can untether ourselves from geography and put ourselves onto our clients’ mobile devices, we can add more value to these relationships with clients, who will appreciate the quality and convenience they’ve come to expect in a digital world.
Favorite tool:
We get a lot of use out of Domo. It’s an effective visual representation tool for analytics. It integrates financial and non-financial data streams into a single, visual platform. We’ve used it to make data-driven decisions, and to automate a number of tasks critical to our growth objectives. With it, we can more easily find opportunities and stop threats.
More thoughts:
Nick Graham
Michael Kitces
Jon Patullo
Dean Rager
Clara Shih
Darren Tedesco