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Bruckenstein: Don’t Serve 21st Century Clients With 20th Century Tech

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At his T3 Technology Tools for Today Advisor Conference, Joel Bruckenstein suggested on Tuesday Feb. 6 that in building better digital experiences for clients, advisors should ensure that those are good client experiences, using an example from the recent past.

“Five to 10 years ago, many advisors became interested in building client portals” with only middling success, he recalled. The takeaway then for many advisors was that clients really weren’t all that interested in portals. But the real lesson, Bruckenstein said, was “clients weren’t interested in using crappy portals.”

Therefore, Bruckenstein cautioned to software developers and their advisor prospects and customers, “Beware of ‘crappy portal syndrome.’”

At the 15th annual T3 conference in Ft. Lauderdale, a franchise Bruckenstein founded with fellow (and now retired) advisor Dave Drucker, Bruckenstein was a constant presence, introducing high-profile keynoters like Ric Edelman, Josh Brown and Tom Bradley or hobnobbing with the journalists in the press room.

This year there were nearly 700 attendees — up from 175 at the first conference — about evenly split between advisors and sponsors. The exhibitors included the most popular advisor technology vendors but, uniquely for an advisor conference, also many startups with interesting offerings in a section of the exhibit hall called the Emerging Technology Area.

Among the attendees were a number of leaders of major advisor technology partners. Were those CEOs there to explore M&As? Possibly. To check out the competition’s wares? Possibly. To wine and dine big advisors? Definitely.

As always, Bruckenstein was as quick to criticize “crappy technology” vendors as he was to congratulate software vendors who get it right. As is his wont, it’s not just Bruckenstein’s personal opinion (following extensive demos) that leads him to criticize or congratulate those vendors. He also listens to advisors’ real-world experience (as a consultant to “hundreds of advisors”) with tech platforms and applications, and he demos practically every new piece of technology for advisors (vendors are eager for his blessing) before passing judgment.

“The problem many advisors have is that they’re using 20th century technology to serve 21st century clients,” Bruckenstein told a gaggle of reporters on Thursday (Feb. 8). “That’s definitely a theme in this conference.”

Another ongoing theme is devoting quality general session time to technologies that may not be affecting advisors and their clients immediately, but likely will in the near future. “What distinguishes this conference from others [is identifying] technologies [like blockchain] that can disrupt the industry eventually so advisors can be literate.”

The blockchain general session with Magdalena Ramada, senior economist at Willis Towers Watson, was standing-room only for a topic that only with generosity can be called easy to comprehend.

Exploring sometimes arcane technology issues is important so advisors can talk to their clients intelligently about those technologies, which in the broader media are often painted with misleading, if not misinformed, information, especially when such technologies exhibit the kind of volatile behavior shown by Bitcoin over the past few months.

But as his comment about advisors’ “20th century technology” suggests, Bruckenstein is not starry-eyed about advisors’ tech use and the sometimes crappy, often delayed applications and platforms that advisor partners deliver. “Every company here [at the T3 conference] is trying to make their technology like an iPhone,” meaning it delivers not just simplicity but a great user interface and experience that can make advisors more efficient internally while improving clients’ customer experience. Those client user experience expectations have been raised ever higher by retail technology providers like Amazon and Netflix, which provide “seamless experiences” for users.

So for advisors, Bruckenstein said in a pre-conference session Tuesday with Mark Bruno of InvestmentNews, “it’s incumbent on you to be ahead of where your clients are, not behind.”

Moreover, for advisors, “the whole idea of technology is that it allows you to deliver and scale your intellectual property” to your clients. Traditionally, he said, advisors have grown their firms by adding people to their staffs, but the smart use of good technology allows you to scale without adding people.

What’s Next for Advisor Tech?

In the advisor world, it’s often the case that the more seamless procedures that are available on custodians’ retail sites or apps — such as new account openings — are slower to find their ways onto those custodians’ advisor sites. While there have been understandable hurdles to resolving that disconnect because of regulatory issues, Bruckenstein believes that by the end of 2018 “all the major custodians” will offer much simpler, retail-like new client account openings and onboarding for advisors. In addition, he thinks that within the next few months of 2018, “voice-controlled products” will be rolled out by advisors’ major technology partners, with TD Ameritrade Institutional possibly leading the way.

One other continuing issue for advisors — addressed by several T3 speakers — is the impact of robo-advisor offerings on advisors’ traditional businesses, and whether advisors should embrace the digital investing platform trend or fight it.

Bruckenstein is clearly in the co-opting camp when it comes to robos. Reponding to a question in a general session from an attendee on whether adopting a parallel robo-advisor offering at a firm will cannibalize an advisor’s existing client base, Bruckenstein was nonplussed.

“People understand tiers of service,” such as is the case with airline seating. After all, you get different amenities if you’re sitting in “basic economy, whatever that is, or regular economy” or first class, he pointed out.

He urged advisors to “clearly enunciate the services you provide” to forestall any resentment among clients. But on the cannibalization question specifically, Bruckenstein concluded that the best answer is one he heard at the recent TD LINC conference.

“You may have some cannibalization,” he said, “but the risk of not offering a robo service is higher.”

— Check out Ric Edelman to Advisors: Your Advice to Clients Is ‘Fatally Flawed’ on ThinkAdvisor.


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