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May 17, 2022 at 03:55 PM
What You Need to Know
- Raymond James is investing heavily in its apps and other advisor tools, as well as cybersecurity.
- Advisors are most concerned about the economy and excessive regulations, CEO Paul Reilly says.
- Client satisfaction rates have grown again as advisors have returned to their offices in hybrid fashion.
Raymond James is investing about $500 million in technology during fiscal 2022 as it seeks to strengthen the capabilities of its advisors and improve the overall experience for them and clients, according to Paul Reilly, Raymond James Financial CEO.
The firm “invested a lot in technology in the last decade” since he became CEO, he pointed out Tuesday at the Elevate national conference in Nashville, Tennessee.
Those investments include dollars spent on upgrading its rebalancing platform and other current tech initiatives, cybersecurity, and future technologies including augmented and virtual reality that the firm is testing, he told ThinkAdvisor in a media briefing during the event.
Raymond James believes it’s had the leading desktop for several years but it is important to “keep investing,” he said, adding: “Now, we’re really investing in a client app” that is different from those of rivals that focus on the bank and the client. “Ours is developed to be between the advisor and the client.”
The Raymond James advisor desktop and client interface are where a large chunk of the company’s tech investment dollars are going. “We can add a lot of value on doing customized advisor tools and desktops and connections to clients, and that’s where we really focus the vast majority” of tech spending, Reilly said.
Also crucial is cybersecurity and the firm spends some of its tech dollars on that. Although Raymond James receives very good scores from external testers, “you’ve got to invest” in security to keep up with the threats that are continuously posed by hackers and pirates, Reilly noted.
People try to breach Raymond James’ systems, he said. “Cyber used to be about keeping people out” of your systems but now a lot of it is about, “if people get in how many layers do they have to [go] to find something, and then how many layers do they have to go through to get something out so you can catch them and stop them.” “We haven’t had to test that part” yet aside from internal tests, he added.
“It’s a challenge…. But I think we do a good job,” according to Reilly, who said the firm had yet to experience a major breach.
The firm, meanwhile, uses third-party artificial intelligence and machine learning for data mining and other areas, he said, including to weed out false alerts sent to advisors. The goal is to try and “keep the burden off the advisors,” he said. The firm also uses bots to remove manual processes between systems that take up too much time for humans to do manually.
The firm demonstrated the use of holograms during one of its sessions at the conference, while discussing AR and the metaverse and how they may affect advisors.
“I don’t think everybody’s going to wear Oculus glasses” for virtual reality meetings anytime soon, he said, conceding the technology’s “still coming” in terms of how it can be used by advisors and it’s “not ready for prime time” yet. But automated assistance using augmented reality is one of the many uses of tech that could help advisors in the future, in addition to the apps they now use, he said.
It’s important to show advisors that the firm is investing in the future and their relationships with their clients, and technology is part of that discussion, he explained.
“It doesn’t mean all of it’s ready today, or it doesn’t mean some other technology won’t jump” in front of these by the time they’re ready, he added.
Despite the heavy tech investments, Raymond James is “betting on advice,” not direct investments that robos focus on, he said.
After all, “the value isn’t in the trading…. It’s really in the holistic planning and advice,” he stressed. “And that’s where our advisors have done very well. We’ve led the industry, I think, in the last year and a half” when it comes to net new assets, he said, noting, “I give that credit to the advisors.”
The Return to ‘Normal’
Noting Raymond James hadn’t held its conference since before the pandemic, Reilly said “every seat was taken” for Tuesday morning’s Town Hall session with him and other company executives.
“It shows just the desire for people to be back together,” he said, adding: “They’re happy to be here. They’re happy to see each other. And all we can do is kind of mess it up on stage.”
Raymond James had already been planning to shift to flexible work before COVID and had already been using Zoom and introduced its advisor mobile app.
Unlike some rival firms that have demanded full office returns over the past year or so, with “our long-term cultural values, we told associates to try to come in two to three days a week,” he said, noting the firm’s management was aware that some advisors and others had child care issues.
The hybrid return to the office has been “pretty successful,” he said, noting that in-office work was at about 80% of pre-pandemic levels. Fridays, however, are “still noticeably a little less crowded” than the other four days of the week, he conceded.
