Orion, Advizr integration ramps up competition among financial-planning software providers

As robos become more commonplace, sophisticated tech can set advisers apart

Aug 12, 2015 @ 12:34 pm

By Alessandra Malito

As robo-advisers get more and more well-versed in providing investment advice to clients via websites and apps, advisers will need to up the ante on the digital platforms that they have to offer.

That means focusing heavily on software and services that can help to facilitate effective financial planning and client servicing.

Many service providers claim to be up for the challenge of assisting advisory firms in upgrading their technology, which is why Orion Advisor Services announced its integration with Advizr, a financial-planning program. With the new tool, advisers will be able to create plans for their clients using goals-based strategies. For advisers who use Orion, there is no additional cost to take advantage of this integrated service.

The two-way integration will allow data from Orion's account-management and performance-reporting software to feed through to Advizr's platform, which also aggregates personal financial data using Quovo, a data analytics company. From there, advisers will be able to gauge the best plan for each of their clients, taking bank, investment and loan accounts into consideration.

"It is one of the many ways that advisers are differentiating their value proposition, especially against robos," said Eric Clarke, president of Omaha, Neb.-based Orion.

Robo-advisers are investing millions of dollars to create more intuitive interfaces and user-friendly technology in an attempt to plan clients' financial futures. They'll also be charging for their services at a fraction of the cost of most traditional advisory firms.

Neal Quon, co-founder of the financial adviser technology consultancy QuonWarrene, said that advisers are demanding these digital financial-planning tools to reach a wider audience.

Yes, advisers can guard their practices against potential threats by adding their own robo-advisory platform.

Regardless, it is important to show that they can flex muscles that these automated platforms don't yet have, and the way to do that is through personalized financial planning.

“The emergence of robo-advisers has begun to commoditize investment management, resulting in compression for assets-under-management fees,” Mr. Quon said. “Advisers are looking toward fee-based financial planning to strengthen the adviser-client relationship, as well as to stabilize or bolster revenues to their practice.”

The industry has seen a reemergence of financial planning, said Phil Cunningham, the chief executive of Advicent Solutions, a financial-planning technology provider.

“It used to be a financial plan was something only for high-net-worth or ultra-high-net-worth clients,” Mr. Cunningham said.

Many firms have already begun to place more of an emphasis on financial-planning software. In February, Fidelity acquired another financial-planning software provider, eMoney Advisor. Envestnet, the wealth management technology provider, acquired financial-planning software firm Finance Logix in May.

"Before all the robos, there was just clear value in financial plans," said Hussain Zaidi, the co-founder and chief executive of Advizr. "After the robos, we are now seeing another factor at play — and that's fear.

"A lot of the investment advisers and institutions want to make sure their offering is relevant and valuable, [a motivating factor] for them to go beyond investment management and go toward holistic financial planning," he added.

Matt Schulte, senior vice president and head of financial planning at eMoney, said the industry is moving away from a product focus to a financial-planning focus. Because of this, advisers are able to engage their clients more effectively and spark long-term relationships.

"It's allowing advisers to offer a complete picture to their clients," Mr. Schulte said. "They are giving their clients a live updating balance sheet and net-worth statement.

"In the old days, advisers had [only] certain pieces of data, but now, through different technologies, they are really able to pull everything together," he added.

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