Wearable devices edge into the adviser space

As industry ponders the future, robo Personal Capital announces an app for smartwatches

Jul 17, 2014 @ 1:23 pm

By Joyce Hanson

Advisers, investers, technology, wearables, smartwatches
+ Zoom
(Bloomberg News)

Wearables are getting the buzz in the technology market lately, so it makes sense that a Silicon Valley-based online investment platform should be one of the first firms in the advisory world to integrate its mobile application on wearable tech devices.

Personal Capital Corp., a so-called “robo-adviser” founded by former Intuit and Paypal chief executive Bill Harris with a business model that offers online portfolio management along with planning help from human advisers, recently announced that its app is available for Android wearable devices, including the LG G and Samsung Gear Live smartwatches.

“As a startup company, we pride ourselves on our rapidly developing technology,” said Jim Del Favero, chief product officer for Personal Capital and the app's developer. “It seemed like a no-brainer to take a stab at it. There's a huge interest in connected devices in general. Wearables to me are just another type of connected device.”

(More: A visit to the wearable technology future)

Personal Capital's wearable watch app integrates with the Personal Capital app on other Android devices such as smartphones and tablets. The app shows customers a “You Index” that pings them every day at market close to show how their portfolio stacks up against the S&P 500 index. From there, the user swipes to see more detailed information on the top five gainers and losers in their portfolios, Mr. Del Favero said.

It remains to be seen if and when advisers themselves adopt the rapidly developing technology of wearables that's catching on with consumers — and whether they would recommend that clients use a wearable app that shows daily stock gainers and losers.

“From a behavioral finance standpoint, doesn't it focus people on absolutely the wrong thing, which is daily returns? It's a gimmick,” said Dave O'Brien, president of O'Brien Financial Planning Inc. “They might as well integrate with Google Glass and have stock prices scrolling across your glasses.”

A self-described “fan of technology” and an advocate of the mobile advisory practice, Mr. O'Brien acknowledged that some advisers' clients are early adopters who would enjoy the “cachet” of viewing the value of their portfolio daily on their smartwatch.

“But it's a fractional piece of the puzzle,” he said. “We see people trying out new things, and we're going to settle on some practical apps of technology to help people take care of their finances.”

To be sure, big companies are experimenting with ways to bring those practical apps to advisers. The large custodians Pershing and Fidelity Investments, for example, are investigating smartwatch apps. Fidelity Labs has developed a free Pebble watch app that shows users a daily watch list connected to their brokerage accounts, and Pershing's Advanced Technology Lab is looking into something they call “wearable workflow,” which may someday let an adviser ping a client with a Section 529 college savings plan that requires an e-signature.

Any adviser who's considering a kind of tech purchase should focus on content first as opposed to the delivery medium, said Neal Ringquist, president and chief operating officer of Advisor Software Inc.

“When you look at technology and what drives productivity, having tech on your phone and the ability to tap into apps makes sense as a hub for business activity,” Mr. Ringquist said. “But I'm not convinced that any wearable device holds the same allure. A lot of people don't wear watches anymore, particularly young people.”

But client engagement and expectations are key, said Matt Stroh, senior vice president of marketing at Envestnet | Tamarac.

“People stopped wearing watches because they started checking cellphones, but now with the smartwatches coming out, it's an extension of their mobile experience,” Mr. Stroh said. “People may say watches are out, but it evolves. It's incumbent on companies that support advisers to embrace the evolution of technology.”

As smartphone screens get bigger, smartwatches' smaller screens are increasingly popular with the next generation of investors, Mr. Stroh asserted. Registered investment advisers should develop a client portal that works as an “online storefront” from the first touch that engages prospective investors, regardless of the device they're using, he said.

Personal Capital has more than 500,000 users, and 60% of them engage with their accounts via mobile devices, Mr. Del Favero said.

“They're not looking at us from a PC,” he said. “Wearable devices are the next evolution of mobile.”

In a blog post , Mr. Del Favero wrote that fitness bands may be the one device that most people think of when they think wearables, but he foresees a future where apps on multiple devices, including wearables, talk to one another when investors are on the go.

“A new form factor is challenging to design for, but it's the experience that you have to rethink as well,” he wrote.


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