Just as thousands of college students gathered recently in Florida for spring break, leaders of top wealth management firms assembled in the Sunshine State for SS&C Advent’s Black Diamond Executive Forum and the Pershing Elite Advisor Summit.
Staged by technology and custodian leaders in mid-March, these two executive conferences brought together staff from growth-minded firms for networking, industry content, professional development and technology demonstrations.
One benefits of hanging out at these events is the chance to learn from visionaries, see the impact of emerging trends close up and gain powerful ideas on how to run a better business in a world of change.
Kicking off the Black Diamond Executive Forum was SVP and business unit leader Steve Leivent, who welcomed attendees by detailing the amazing growth story of the firm’s wealth management platform. “Black Diamond now serves over 1,400 firms, representing over $1 trillion in assets on the platform,” he said, describing the evolution of the technology that processes over 1.8 million end-client accounts daily.
“Because of the massive amount of data that we have, we will be able to extend Black Diamond into the world of big data, AI and machine learning to help advisors better manage their businesses and client relationships,” he added.
Some of this data is focused on peer benchmarking, he says, so advisors can see how they stack up against similar firms in terms of pricing, fees, AUM flows and more — all in real time, so they can make better decisions in managing their firms.
This talk was complemented by a demonstration of Black Diamond platform enhancements and new product launches, including an updated billing platform, new features for the rebalancer and expanded integrations with custodians and other tech partners — like a streamlined account-opening application.
Plus, Black Diamond added an environmental component that can save hundreds of trees every year; advisors share 1.5 million PDF reports on the Black Diamond Client Experience portal, and it eliminates the need for printing and mailing.
Being a tech company, Black Diamond has keen perspectives on how technology is affecting the advice business. Top among them, according to Senior Directors Eli George and Bjorn Widerstedt, is the “consumer-ification of wealth management,” such as the digital transformation that is happening across industries as people become more comfortable with a digital experience. As a result, advisors need to increase the adoption of these tools and approaches with clients across the board to remain relevant.
The duo also highlighted other trends: the growing outsourcing of investment-management services, as robos continue to commoditize investing; the declining profitability of advisory firms due to increasing regulatory costs; and an aging population of both advisors and clients.
The result, Widerstedt says, is the growing movement of advisors to seek out “one platform” that combines all of the technology apps and investing services they use to create the key efficiencies needed to manage their workflows in a more complex environment.
“These trends also explain why so many asset managers and annuity companies are now racing to become technology providers and consultants to keep up,” he wryly noted.
Future Generations Continuing the future-forward theme was Dani Fava, director of innovation at TD Ameritrade Institutional. Fava spends her days researching the latest emerging technologies to help advisors read the tea leaves on how their businesses will change, while also looking to “productize” these technologies on the TD Ameritrade platform to help advisors work better with their future clients.
According to Fava, the best place to look for future technology applications is in science fiction. “Science fiction has been extremely good at predicting the future,” she said, providing examples from sci-fi movies like the Tom Cruise/Steven Spielberg classic “Minority Report.”
Made in 2002, the film previewed new technologies, such as “gesture-based computing,” holograms and personalized advertising based on facial and optical recognition, which are now becoming realities.
To help advisors get a sense of how their future clients will be looking to interact with them, Fava pointed out that “Gen Z never had a desktop computer and grew up streaming content on mobile devices — not on cable or on TV.” As a result, this future generation will demand video interactions and alternative communication methods via holograms vs. face-to-face meetings.
On Fava’s list of items that will quickly become obsolete from tech innovation are keyboards and computer monitors, along with steering wheels and garages — as autonomous vehicles and ride sharing become pervasive; also, remote controls and thermostats are going the way of the buggy whip due to smart homes.
Human Capital Meanwhile, at the Pershing Elite Summit conference, organizers took a different approach to helping advisors better manage their businesses by focusing on human capital issues.
Pershing Advisor Solutions CEO Mark Tibergien shared his considerable wisdom on helping advisors attract and retain top talent by becoming “an employer of choice.”
“The ability to create career paths in advisory firms is the missing link in hiring practices in order to truly create an enduring business,” he said. “The past success of the industry means that for the first time, there are now more employees than owners. However, over one-third of advisors will either retire or sell their businesses in the next 10 years.” Thus, after a decade, over two-thirds of the industry should be millennials, though the industry currently is not set up to attract and retain this demographic, he said.
This is why he and the CFP Board of Standards’ Center for Financial Planning are developing a white paper to propose solutions to this looming demographic crisis. “According to our research, the reasons people don’t come to our industry are that they did not study finance in school, so they don’t think they are a fit; the industry has a bad reputation; and the pervasive perception that being an advisor is a sales job and that the industry doesn’t develop people — there is no career path,” he explained.
To solve these problems, Tibergien suggests, firms should create new roles that can provide staff with professional development and increasing responsibilities. But firms must be the right size to pull this off. “When new people join firms, they need to be allowed to be high impact learners, not high impact workers, so they can gradually evolve to become the future leaders.”
Bringing this point home in person was Rianka Dorsainville, a highly acclaimed and award-winning innovator in financial planning of the virtual practice Your Greatest Contribution. “I’m what is known as a ‘triple minority’ — young, of color and female. I didn’t set out to be an entrepreneur and didn’t want to own my own business, but I had to in order to work with my target client segment,” she said during her presentation.
Dorsainville has successfully set up her business to offer virtual fee-based advice by only meeting clients via video and charging an annual retainer fee. Today, she has a growing wait list.
She also is active in educating the industry about how to best attract and retain a younger, more diverse workforce by sharing her personal story and journey, as well as by being an advocate and role model for minority and female leaders through her podcast series, “2050 Trailblazers.”
She and other speakers at these two recent conferences provided actionable information and deep insights into the key inputs that will drive the advisory firm of the future — a unique combination of technology and human talent.
To learn more about what went on at these executive events, check out the many tweets on the #BlackDiamond and #EliteAdvisor hashtags on Twitter.
Timothy D. Welsh, CFP® is president, CEO 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.