Close Close

Technology > Marketing Technology

How to Win Man vs. Machine Advice Game

Your article was successfully shared with the contacts you provided.

TD Ameritrade put the competitive pressures tied to robo-advisors and other technology left, right and center at its LINC 2018 RIA conference this week in Orlando. Industry leaders highlighted the power and threat of technology and how to address these trends in the advice business.

“Our value-add [for clients] is undergoing a major shift,” said Ric Edelman, founder and executive chairman of Edelman Financial Services, before some 3,500 RIAs and other guests Thursday.

“That means adopting artificial intelligence … and showing clients how we will be their personal finance quarterback. If we do that, then clients will let us manage their assets.”

It’s sink or swim, says the advisor and author. “We need to become expert s on this [data] analytics and stay ahead of the machines. Being able to say, ‘Hey Siri, what’s the value of my portfolio?’ is only about a year away,” he explained, referring to Apple’s voice-activated virtual assistant.

TD Ameritrade “is one of the original fintech disruptors,” said President & CEO Tim Hockey. “Now we are an incumbent. How can we innovate faster than the new firms?”

The answer, he explained, is to “not be afraid or rest on our laurels. We must do more partnerships. One, two or three years from now, we should see blockchain vendors in the Veo Village [conference tech center].”

According to TD Ameritrade Institutional President Tom Nally, the firm aims to “fuel more innovation” by staging a fintech contest at its ninth annual technology summit for the RIA channel, which takes place this summer near Dallas.

(The firm’s RIA platform Veo One includes 22 applications from 20 tech firms, with the latest additions being AdvisorEngine, Advyzon, Blueleaf, Envestnet | Tamarac, RightCapital and Wealthbox.)

Keeping up with the pace of technology and innovation is no easy task, according to futurist and entrepreneur Lex Sokolin.

“It’s a crushing problem to apply human knowledge to data. Every second, there is so much data about clients — what they bought on Amazon and their credit card purchases,” he explained.

“The challenge is building human judgement into machine learning and algorithms and to plug that it into some technology in the future,” said Sokolin, who now leads fintech strategy at the research firm Autonomous and is on the board of AdvisorEngine.

Got Siri?

In terms of the use — and threat — of voice-activated technology, TD Ameritrade Chief Information Officer Vijay Sankaran says the industry is moving to incorporate more of it.

On the retail side of the business, the firm introduced a “chatbot” about five months ago so do-it-yourself investors can ask the firm about their accounts and the markets via Facebook’s messaging application. In late 2016, TD Ameritrade added voice-enabled search for stock quotes through Alexa, Amazon’s virtual aid.

In terms of client-specific information available on Alexa, the firm is planning to share data on balances and positions over the next year or so — and to do the same via Google Home for its retail clients.

As for the RIA or institutional side, the CIO said, “It’s coming, and we have to look at what advisors want to ask [virtual assistants] — what type of questions do they have.”

Over the next few months, “the convergence of advisor and client information” should be added to the Advisor Client portal, he adds. “But voice recognition is not part of this [rollout].”

TD Ameritrade is working, though, to make information that the advisor wants the client to have access to via voice. Such client-facing voice-recognition features for Advisor Client are likely to be introduced in late 2018 or early 2019, according to Sankaran.

“We do not see as a huge threat from Alexa-type technology on its own,” he said. “We think people want to know their total net worth, across accounts and such. Even knowing that [via Alexa] will not replace the advisor.”

Still, he admits, advisors see robos getting more powerful “and then they need to be able to answer the question asked by tech-savvy clients: What is my advisor giving me that the robo is not?”

The answer should inform advisors’ incorporation of technology, the CEO explained. “We say embrace the robo, see what it does and how it can add value.”