LPL sets lofty goal for more automated operations processes

The company aims to ramp up its level of automation from 15% to 85% within the next few years

Jul 27, 2015 @ 1:35 pm

By Alessandra Malito

LPL may not have the most automated processes when it comes to adviser operations, but the company announced during the independent broker-dealer's annual conference in Boston on Monday that it intends to dramatically fix that.

As of right now, the company estimates that 15% of its adviser operations are automated, and within the next few years, it expects to orchestrate a jump to an 85% level of automation. That number includes everything from opening new accounts and executing account transfers to rebalancing and moving money from one investment to another, among other activities. LPL expects to pay millions to make their processes more automated, according to a company spokesman.

"Technology has matured a lot in recent years and the book of business hasn't had a lot of automation," said Victor Fetter, managing director and chief information officer at LPL.

Advisers can use newly automated tools, such as the moving-money feature that LPL recently came out with, to streamline the processes that usually take a lot of paperwork. Mr. Fetter said that was a key part of an evolution to "straight-through processing."

He also said many advisers were demanding more automated, user-friendly processes to help operations run more smoothly and save time.

"More automation makes it easier for us to focus on client relationships," said John Fawaz, an LPL adviser with Financial Partners of Tennessee in Knoxville, Tenn.

Improving processes by increasing the level of automation is an objective for various companies around the industry with legacy software platforms and a considerable amount of manual processes. As the industry continues to evolve at such a rapid pace, with robo-advisers being emblematic of that, advisers are expected to be in tune with the latest technology that is out there.

"At a very high level, every legacy company in the financial services industry is finding ways to automate," said Blane Warrene, co-founder of QuonWarrene, a technology consulting firm for financial advisers. "Everyone is trying to find ways to be more efficient."

Fidelity estimates that about two-thirds of its top workflows are automated for the broker-dealers and registered investment advisers using its platform, including account opening, asset transfers, money movement, portfolio modeling and trading.

"Our goal is to develop or support the solutions that assist with end-to-end automation of the most impactful workflows," said Ed O'Brien, the head of platform technology at Fidelity Institutional.

TD Ameritrade Institutional, on the other hand, has fully embraced automation through their open architecture integrations, which also works with third-party vendors to provide operational support.

"The top two things advisers are looking to do is leveraging technology to scale and improving client experiences," said Jon Patullo, managing director of technology product management at TD Ameritrade. "Leveraging technology to scale is about automation."

These enhancements will only expand across the industry, Mr. Warrene said, especially now that LPL is investing significantly in modernizing its own processes.

"You will see very quickly who has the resources and capability of automating," Mr. Warrene said. "It is not an inexpensive proposition."

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