What a difference a year makes, particularly in the advisor technology industry. This fast-moving space adapts to changes in the economy, consumer preferences, emerging technologies and innovation faster than anywhere else in financial services — all in its quest to be hyper-focused on ways to more efficiently support human advisors and keep the robots at bay.
To get the latest updates, there is no better venue than the twice-yearly Technology Tools for Today (T3) series of conferences, produced by industry icon and technology guru Joel Bruckenstein. T3 is the place to be to get the barometer on what is hot, trending and emerging in advisor tech.
This year’s T3 Enterprise event, recently held in Las Vegas, was markedly different from its previous edition just a year ago in one important category: regulatory changes. With the DOL fiduciary rule finally put to rest, the home office executives of independent broker-dealers, large RIAs and other multi-advisor entities have turned their attention to helping advisors become more efficient and productive and not retro-fitting back offices to comply with DOL’s complex requirements.
“Last year, just about every exhibitor here had some form of signage on how their platform helps with DOL compliance,” said celebrity attorney Brian Hamburger of MarketCounsel. “This year, however, everyone must have refreshed their marketing, because I don’t see any mention of DOL at all.”
The legal expert shared his regulatory insights during a sit-down keynote session with industry observer Bob Veres. “Regulators have been chasing headlines with their rule making,” Hamburger noted. “We didn’t have a custody rule until after Madoff, and we didn’t have to worry about business continuity until after 9/11.”
As for what’s next, Hamburger pointed to the many rising and alarming headlines tied to cybersecurity breaches as what will most likely influence the next wave of regulations. This should make industry participants re-think their technology systems, platforms and practices to ensure the sanctity of client information.
On a positive note, Veres believes that the innovation happening in advisor technology, particularly the investment automation being driven by robo advisors and the fiduciary movement, will empower firms and advisors to move down market and more efficiently deliver advice to lower-asset thresholds.
Also on display at T3 were the massive investments being made by both technology platforms and asset managers to make access to low-cost and feature rich “model marketplaces” and outsourced investment management platforms even easier. With such new tools, human advisors can one-up robots, and despite the death of the DOL rule, still maintain a fiduciary-forward mentality through lower-cost investment options.
A case in point: the launch at T3 of Orion Enterprise, an offering developed by Orion and its newest sister company, FTJ Fundchoice, a well-known turnkey asset management program or TAMP acquired by Orion’s parent company, Northstar, earlier this year.
The expanded offering extends Orion’s continuum of self-directed trading and rebalancing solutions to include fully-outsourced investment management, special memorandum accounts, unified managed accounts and TAMP services, specifically aimed at the “forgotten” broker-dealers and RIAs that large TAMPS, like Envestnet, may be less focused on in their quest to be the preferred provider to the top-end of the market.
“This is a great time to be an advisor,” noted Bill Wostoupal, executive vice president of national sales for NorthStar. “Technology has been the great equalizer for advisors. However, the big gap that we are seeing is that despite the great technology, we as an industry are not optimizing what is available,” he said.
Wostoupal is looking to the combination of technology and investing through Orion Enterprise to close that gap.
With a similar theme, the head of Vestmark, a leading outsourced investment and technology platform not widely known outside of the enterprise community, took to the general stage to announce its technology and investment management initiatives.
This includes its recent integration with Oranj, an emerging client service and investment portal, in addition to tools, technologies and investment management solutions added via its acquisition of Adhesion and now available in an integrated suite.
Rob Klapprodt, president of Vestmark, expects further consolidation to occur in investment management, as fees continue their downward march to zero. “There will be a lot more M&A in investment management, so you need to prepare and design for scale,” he said.
On the custodial front, Pershing took over the corner stage in the exhibit hall for a quick demonstration of its integration strategy, which is designed to “deliver a great experience and make it easier to do business,” said Emily Keep, integration product manager for BNY Mellon Pershing.
The Integrated Wealth Experience is designed for three segments of Pershing’s technology users, including the typical advisory firm that uses Pershing’s workstation, NetX360, and then leverage APIs to directly integrate Pershing’s client and brokerage data into the many third-party applications advisors use on a daily basis.
“We call it integration as a service,” Keep said. “You may not need us for everything you do, but you do need our data.” To make the integration process easier for the industry, Pershing is building out its Integration Portal to enable self-service for technology developers.
Plus, Keep highlighted new “components,” such as direct API integrations for third-party systems, along with specific business rules and automated processes that developers can drop into applications to speed up and streamline development.
Emerging fintech star Dani Fava of TD Ameritrade Institutional described how change in other industries will affect wealth management, and she pointed to everything from new communication technology to increased longevity.
Fava’s research leads her to believe that the next innovation for advisor-client communication will include holograms, so advisors can be in multiple locations at the same time.
In addition, thanks to improvements in “conversational artificial intelligence,” Fava predicts that digital assistants like Amazon’s Alexa and Google’s Duplex will be able to take on more and more administrative tasks, such as scheduling, ordering and facilitating client service.
Rounding out the T3 Enterprise agenda were a number of keynote and general session presentations from leaders of the largest financial planning platforms, which want to become providors of the next fiduciary layer tied to coming rules made by state commissions and/or the SEC.
These big, growing platforms, including MoneyGuidePro, Advicent, Fiserv and Advizr, encouraged advisors to move away from transactions and investing — worth that is being commoditized to zero — so they can continue to differentiate themselves from robots and provide more advice and guidance in support of their 1% fees.
MoneyGuidePro’s head of sales, Kevin Hughes, took the coveted opening keynote slot and revealed a new approach to financial planning that involves simplifying and breaking down the planning process into “blocks.”
The idea is to make it easier for clients to get started and engaged in the planning process through smaller modules that focus on one set of planning issues, rather than having them overwhelmed with a large planning exercise that covers multiple goals and objectives. “We call it ‘stealth’ planning,” said Hughes.
To learn more about what went on at the 2018 T3 Enterprise conference, check out the many tweets on the #T32018 hashtag on Twitter.
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.