Frank Coates, head of analytics for Envestnet Yodlee, has a lot on his mind these days when it comes to technology trends.
The former Army lieutenant and computer-science major first signed up for the financial services industry in 1990. The company he started in 2010, Wheelhouse Analytics, was bought by Envestnet six years later.
Today, though, he’s focused on one short-term trend and one that’s longer term.
At present, Envestnet is rolling out analytics capabilities that can be introduced at the advisor level, “down from the headquarters of the broker-dealers,” such as some benchmarking analytics, explained Coates during a break at the recent Financial Services OneVoice conference in New Orleans. “We want to change how financial planning is done.”
Part of that means changing the conversation with clients about retirement, which now resolves around the “retirement math,” i.e., asking them to, say, save $12 million, he points out. “This is an unattainable mark for many investors.”
Instead, how about asking, “Who will you be when you retire vs. who you are today?”
Envestnet has “years of wealth data,” Coates explains. “We are building … a database that can help advisors,” particularly when it comes to behavioral finance.
For instance, advisors can look at data on how large numbers of investors of a certain age or risk profile were doing five years ago and compare those figures with how the investors are doing today.
That can show advisors and investors, for instance, how “one group did this with their assets five years ago, and now this is their situation,” he added.
By supplying advisors with information on good, bad and mediocre decisions, these FAs can work more effectively with clients who want to know how they are doing relative to others, and what they need to do “realistically better,” according to Coates.
What is realistic? “Some people cannot run a five-minute mile, but maybe they can run a mile in 10 minutes. Why not help them get to 9.50?” he asked.
For Envestnet, a longer-term goal is to push more voice-enabled technology out to advisors and ultimately clients.
“Last year, we rolled out conversational business intelligence technology. We are investing huge in voice, and that’s what our big announcements are around. We are making a big bet on that,” Coates said.
The technology, Envestnet Intelligence, uses artificial intelligence, machine learning, natural language processing and an advanced data analytics engine to let financial professionals immediately get answers to business questions. The tool works on desktop, mobile and Amazon Alexa-enabled devices
“Our view is that in three years, you’ll not be logging into accounts on a computer. You’ll be using text and voice and apps to open your accounts via voice recognition,” the executive explained.
By building vertical computing stacks, technology’s biggest players – Google, Amazon and Apple – are “opening up” the power of voice, he says.
“Imagine, if – instead of logging into 10 systems – an advisor could just be told, ‘Here are the client accounts that need rebalancing today!’” Coates said. “Today’s technology just gets in the way of advisors.”
He sees voice becoming the core technology behind about 90% of advisor and client activities in the future: “We are turning into a voice-first world. Remember, five years ago, when we thought mobile first? Now, it’s becoming voice first.”
Along with regulation, security is the main issue slowing down this development, says Coates, referring to Apple’s FaceTime privacy bug.
“What if an advisor is using voice [tech] while working alone and accidentally shares client information? That information cannot be fully controlled today. We know that the big firms … are keeping [the voice files], and no one can stop them,” he said.
Meanwhile, many firms are working to bring advisors and other professionals the ability to use voice-enable technology without storing personal names or other private information.
“In a couple years, the security will be there,” according to Coates. “We want to get there, and we know the security will happen. Regulators like the SEC may slow things down, but they never stop innovation.”