Most advisors will say one of their biggest pain points is the problem with data — as in how many times they and their staff have to re-key the same data into multiple systems and applications just to get business done.
Even routine “simple” tasks, such as managing a client’s change of address, can mean accessing multiple systems and screens, typing in the same information sometimes a half dozen times or more just to ensure that reporting is accurate, documents are titled appropriately and statements get sent to the right place.
For many reasons, most notably an advisor’s own choices to get the best in breed solution, their technology systems, applications and custodians have grown up in silos. This creates problems with connectivity, which leads to inefficiencies and manual workarounds, thus preventing advisors from faster growth and limiting their capacity.
While this technology integration problem has been a perennial issue, the good news is that progress is being made thanks to a collaborative advisor technology community and leadership from the industry’s custodians.
Case in point: The ninth annual TD Ameritrade Institutional Tech Summit. This two-day tech confab, held in 100-degree-plus heat this summer in Dallas, was the scene of over 40 advisor technology executives gathering together with the executives, developers and product managers from TD Ameritrade’s Veo Open Access initiative.
According to Jon Patullo, TDA managing director for Technology Platform Management, the momentum and promise of technology integration came from a 2010 advisor meeting held in Turtle Creek, Texas.
“Advisors were telling us that technology integration was a real issue in their businesses, because they liked having choice of using their own personal favorite CRM, financial planning and portfolio accounting systems, and didn’t want to suffer the trade-offs of an all-in-one bundled solution, or have their technology stack dictated to them by their custodian or broker-dealer,” he said.
Patullo added that, “Choice is good, however, it creates complexity. It occurred to us that there was an opportunity for TDA, as their custodian, to play the role of technology integrator, so the custodial data they needed would be able to freely flow from our systems of record to their applications and back again.”
To do this, Patullo and Chris Valleley, TDA director for Institutional Technology Solutions, and their teams floated the idea of creating an application programming interface that third-party technology vendors could code to, so that data could pass easily and one system could update multiple, third-party systems, saving massive amounts of advisors’ time and resources, while enabling advisors to work with their vendor of choice.
“We started with just a handful of tech vendors to help validate this idea and to begin to build a roadmap for what this could look like,” Patullo noted. “Collaborating with the industry vs. us doing it on our own was a much faster way for development and has been the real success behind Veo Open Access.”
Today, Veo Open Access includes more than 150 tech vendors. Patullo and Valleley credit the spirit of cooperation among the advisor technology industry as key to this growth. Based on the success of earlier attempts at technology integration among the advisor technology industry, technology firms generally have been more than willing to put their competitive instincts aside to facilitate making advisors’ lives easier.
An early example, Your Silver Bullet, was a ground-breaking initiative launched by then Junxure CRM CEO Greg Friedman and his partner Ken Golding to gather the advisor technology industry in 2007 and foster cooperation among platforms and systems to help solve the data integration problem. YSB eventually numbered several dozen technology firm members and showed that there really was a collegial spirit in the niche market of advisor technology.
YSB disbanded a few years after custodians began taking the lead in technology integration, but its early members — such as Brian McLaughlin of Redtail, Eric Clarke of Orion and Kevin Hughes of MoneyGuidePro — remember it fondly. And it’s no surprise that these three firms were the first to jump into Veo Open Access.
“Technology integration is table stakes now,” said Patullo. “We are looking to the next level of integration with automated smart alerts, using AI and other advanced technologies to really make it easy for advisors to manage their back offices.”
The industry’s other leading custodians are adopting some form of vendor access via APIs, such as Pershing’s API Store, while Schwab and Fidelity are going the route of selecting a handful of preferred vendors for custom integrations.
“We like our approach to have totally open access through the Veo API, because now we have 150 development teams driving advisor innovation vs. just one,” said Patullo. “We never would have been able to have this much deep functionality and robust integrations without the support and collaboration of the vendor community.”
Now advisors and their staff can launch custodian workflows without leaving their favorite vendor applications for various tasks, such as account opening, account servicing, trading, cash management and reporting, according to the Tech Summit host Marcel Tsai, TDA senior product manager.
These daily activities pretty much consume most of the administrative and operational aspects of running an advisory firm, saving advisors much time and effort, while improving accuracy. Additionally, it has raised the bar for advisors themselves to adopt these technology solutions and stop calling their custodians.
“Advisors still fax us and then call us to see if we got the fax,” noted Valleley wryly. “[That approach] definitely ties up resources, so as a result we have new status trackers to help alleviate this syndrome and are beginning to educate these more paper-based advisors [on]the benefits that technology integration can bring.”
According to Tsai, workflows are accessed via multiple integration points including the Veo API, along with advanced alerts, single sign on and two-way data feeds. This is particularly important in the new client onboarding and account opening process, which has been a notoriously painful process in the industry.
Therefore, it was no surprise that TDA showcased its new account opening developments at its recent gathering. These include the Create Account API, which TDA uses — with third-party forms filling software, such as LaserApp, to receive the raw client data from those online forms and to deliver that information directly into the TDA back office system. The system then automatically generates the account number, so advisors can start doing business in real time and not have to wait days or even weeks to get started.
TDA’s Account Wizard API also can help take raw client data and open the new account from CRM systems, again eliminating the need for the re-keying of data from the CRM to an account opening form. From there, tight integrations with e-signatures, such as Docusign, complete the loop, and accounts can be opened without any paper steps.
“In our industry, the account opening process is a real disaster,” noted tech guru and T3 event producer Joel Bruckenstein, who was in attendance. “These improvements are desperately needed in light of how other newer players, such as robo advisors, can seamlessly open accounts.” Bruckenstein also noted that because of this open access API approach of TDA, newer startup technology vendors tend to gravitate to it.
Next up for the Veo Open Access initiative is bringing in more analytical abilities, such as the recently acquired FA Insight data, so that advisors can benchmark themselves vs. their peers and see at a glance how they are performing and what opportunities they have to improve efficiencies. Additionally, AI-based “virtual agents” and “chatbot” capabilities will be deployed to better service advisory firm’s needs.
Timothy D. Welsh, CFP® is President and founder of Nexus Strategy, LLC, a leading consulting firm to the wealth management industry, and can be reached at firstname.lastname@example.org or on Twitter @NexusStrategy.