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Technology > Marketing Technology

5 Big Advisor Problems Being Solved Through Tech: Broadridge

By Jeff Berman

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Advisors face ever-growing struggles with competition, fee compression, cybersecurity and finding new talent. For those willing to embrace it, new technology is helping them tackle all of these issues, according to Fred Duden, global head of product development at Broadridge Financial Solutions.

That has only become more clear since December, when Duden last discussed some of the top industry trends with ThinkAdvisor.

Digital adoption was “something that advisory firms and advisors were thinking about” for a while but, “with COVID, that adoption [is] something that we’re just seeing take off” this year, he told ThinkAdvisor in a recent phone interview.

Thanks to that acceleration, the industry is making strides in several important areas, according to Duden.

1. Remote Work

The one major “sea change” that has occurred as a result of the pandemic has been the adoption of Zoom and Webex video conferencing platforms by advisors and their clients, Duden said.

“Fifty percent of investors said communications with their advisors have changed in some way in light of the stay at home mandates,” he noted, citing the findings of a recent Broadridge survey.

And 62% of those who reported a change in communication with their advisors would like that to be maintained to at least some degree post-pandemic, Duden added.

2. Client Acquisition

The average financial advisor acquires maybe two to three clients a year and, “in today’s environment,” with the compression of client fees and competition from different business models, how advisors can continue to engage with their clients — in a pandemic or not — is a “really, really important” issue, he said.

“What’s happened is investors have become more knowledgeable” than ever before, Duden explained, noting that “today’s investors [want] advisors that are more kind of digital first.”

As a result, “there’s a tremendous opportunity around… digital engagement,” he said, explaining that by embracing digital marketing and tools, advisors can “reach out to more and hopefully engage more clients and therefore bring on more clients” than ever before.

Digital adoption is also a “really great way for them to show the differentiation with the advice that they provide,” according to Duden.

Embracing digital adoption and hybrid advice, marrying digital capabilities with the traditional advisor model to win more clients each year, is perhaps the best way for advisors to go, he suggested.

3. Smart Processing

Another hot topic, according to Duden: smart processing.

Finding new ways to tackle the things that advisors need to do as part of their business — such as the time they spend on tasks like opening new client accounts — can significantly boost efficiencies and free them up to focus on helping their clients, he says.

For example, brokerage accounts need to be accepted by a firm before a relationship between an advisor and a client can start, he noted. “Ninety-nine percent of those are going to be accepted — they don’t need a manual review [and] they don’t need somebody to look at it,” he pointed out.

Therefore, having an automated process that deals with that task “can speed up the time that it takes for an advisor to get that account open and begin the conversations about really what they’re doing as opposed to spending time on the transactional” part of the business, he said.

Continued industry consolidation, meanwhile, stands to help provide the scale that advisors need to be able to increasingly use smart processing in several areas — not just with onboarding, he said.

Custodians will increasingly use smart processing and artificial intelligence, he predicted, noting smaller advisory firms tend to use large custodians, so more of them will be able to take advantage of those technologies in the future.

Over the next six months and beyond, he predicts, wealth management firms will focus on modern IT platforms and software engineering processes, “developing new digital propositions” and improving the “ability to put together data and analyze it.”

4. Cybersecurity

Despite many reports since the start of the pandemic that suggested cybersecurity issues had increased, Duden said worries about cybersecurity had been growing for a long time.

Firms continue to look at ways to best use data, and there are tools that can analyze IP addresses to crack down on bad actors, he noted, predicting investments in this area will continue.

5. Recruiting Young Advisors

One issue that continues to challenge the advisory sector is attracting younger talent. And one way to get younger folks interested in the industry is through the adoption of technology and the possibility that they can have a real impact on that process, he said.

After all, the “competition for talent is going to be a really key thing” going forward, Duden said. Advisory firms that embrace the new stand to have a better chance of attracting people with long careers ahead of them than those that don’t.

— Related on ThinkAdvisor:

Jeff Berman

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