Page 3 - Investment Advisor July/August 2021

07.21

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Kitces, Pershing CIO: Advisors Should Use Tech to Offer
Better Advice

Technology has enabled advisors to ‘Surprising‘ Year at Pershing
offer better advice to their clients and During the Insite opening keynote,
spend more time communicating with Emily Schlosser, who joined the firm
them by making it possible to spend just under a year ago as its chief oper-
much less time dealing with mundane ating officer, said the one word that
tasks, according to Michael Kitces, head summed up her first 11 months with the
of planning strategy at Buckingham firm was “surprising.”
Wealth Partners and co-founder of XY “Everything that’s happened to us
Planning Network, and Ram Nagappan, over the course of the last 11 months has
chief information officer at BNY been surprising in one way or another,”
Mellon’s Pershing. she said. “We are sitting here, 11 months
“Our industry really is in the midst of from the day I started, still in a work-
just a huge evolutionary shift,” Kitces from-home environment.”
said in early June during a virtual key- In addition, “there’s a lot that’s been
note panel discussion on technology at going on around us that is having a
the Pershing Insite conference. to bring a product to the table” for cli- really surprising impact on our busi-
Amid the rise of self-directed, do-it- ents anymore, he said. Technology has ness,” including social unrest in the U.S.
yourself investing, advisors have largely also freed advisors up to focus on their and “the way that that’s really changed
shifted away from selling products to clients by simplifying such previously our dialogue on diversity is something
focusing on selling the advice itself that time-consuming tasks as making a stock that has been incredibly surprising,” she
they provide to clients, which is a “fun- trade, Kitces said. explained. “I’m really encouraged by the
damentally different business,” Kitces Technology, including artificial intel- depth of conversation that we’re now
pointed out. ligence and automation, can be used by having around diversity and inclusion and
“It wasn’t that long ago that consum- advisory firms to “amplify our operational how we think about our talent.”
ers couldn’t get insurance and invest- efficiency, transforming client experi- The “good part” of the surprises and
ment products — [they] literally couldn’t ences and enabling our business growth,” challenges that Pershing and the indus-
access them” on their own, he noted. Nagappan said. try have faced over the past year is that
Now, however, clients can “get pretty For example, predictive analytics they have “helped us sort of rethink
much any financial product they want and data science can be used by advi- what we’re about and the direction that
on the internet with the click of a but- sors to better understand their clients we’re headed,” said James Crowley, the
ton,” he said. There is “pressure on us to and build relationships with them, firm’s CEO.
add more value on top” as technology Nagappan said. Advisors can start to Pershing said in April it was realigning
“keeps moving forward and makes more have a “more meaningful conversation” its U.S. business to address shifts it saw
and more financial services and products with a client if they are able to receive “in the marketplace driven by the conver-
available to consumers.” data allowing them keep up with cli- gence of business models and the move
However, “the advice business is doing ents’ major life events including child- toward holistic wealth management.” As
better than it ever did before,” he said, birth, a job change or the purchase of a a result, the firm became newly aligned
new house, he explained.
under two main segments — Wealth
adding: “I don’t view the technology
Adobe Stock as the threat but the thing that is con- the “mundane tasks that you’re doing,” Solutions and Institutional Solutions —
Advisors should also be automating
tinuing to push us up the line” to offer
down from three segments, one of which
served broker-dealers. —Jeff Berman
clients more value. It is “not enough
Nagappan said.
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JULY/AUGUST 2021 INVESTMENT ADVISOR 1