5 adviser tech trends that will define 2016

Think small data, mobile strategies, more virtual advisers and yes, robos

Dec 30, 2015 @ 12:19 pm

By Alessandra Malito

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This past year was an explosive one for financial adviser technology.

Technology vendors, including competing ones, were announcing full-blown integrations, data aggregation and analytics jumped to the top of advisers' to-do lists, and institution after institution either picked up or announced a robo-adviser platform in the making for its adviser clients.

Tech gurus say 2016 will bring much of that same high intensity.

"It's going to continue to happen at a very fast pace," said Joel Bruckenstein, co-founder of the Technology Tools for Today conference. "I don't know if it will be quite as extensive as 2015, because 2015 took people by surprise."

There are a number of technology trends vendors and advisers expect to see in 2016, including continued progress on themes from 2015 and others that will be completely new.

MORE VIRTUAL MEETINGS

Douglas Boneparth, partner at Life and Wealth Planning, thinks the most popular trend of 2016 will be a spike in client-adviser video conferencing, and he's jumping on board himself.

"I think the industry is still stuck in a 'come to my office' mentality. However, I am seeing advisers, especially younger advisers, adapt to a more virtual and technologically savvy way of doing business," Mr. Boneparth said. "Advisers are focused on the level of service we provide and being accessible in more ways … virtual meetings is a great example of that."

Some advisers have already started integrating it as a successful practice model. According to an InvestmentNews/Cambridge adviser technology study last year, only 4% of advisers who responded currently list video conferencing as one of their communication methods, but 32% expect to rely on it more within five years.

SMALL DATA BEFORE BIG DATA

Technology providers will need to assist advisers in finding and using their small data, said Eric Clarke, chief executive and founder of Orion Advisor Services, a wealth management technology provider.

Small data includes data points already on adviser programs. Advisers have all heard of big data, which includes information from around the world and web, but small data will spell out what makes the advisers' practices tick and how to improve them.

"Quite bluntly, advisers need to pay attention to their small data and what it is telling them," Mr. Clarke said.

He cited the example of a firm using small data to determine that most of its clients are in or near retirement.That information can help the firm figure out how to serve the clients it already has, before branching out to attract new clients in another age group.

"Sometimes flowers bloom in unexpected places," he said.

MORE DIGITAL STORAGE

Almost all clients have more accounts than they can remember, but advisers can help them make sense of it all — especially the important financial accounts — with digital storage, said Abby Schneiderman, co-founder of Everplans, a digital end-of-life planning platform, which came out with an adviser-facing dashboard this year.

"Having data all in one place is one more way advisers can serve their clients' needs," Ms. Schneiderman said. "Coupled with estate planning as another big trend, I think one thing advisers are looking for is singular places to house all of their client's information: wishes, documents, investment accounts, etc., in one place."

After all, adviser technology is all about the client.

MOBILE STRATEGY

The use of smartphones and mobile technology is not going away, but advisers have still been slow to adapt to it.

More than just a mobile-friendly website, advisers need to shift their focus to mobile communications. 2016 is the year, according to John Michel, chief executive of CircleBlack, an online account aggregator and wealth management platform.

"Advisers are going to develop strategies to try and catch up to where everybody is today with, in particular, mobile and smartphones," Mr. Michel said. "If you think about what advisers do, a big part is communication about what is going on."

"The best ones are great communicators, and mobile is a huge part of that," he added.

Mobile communication will be crucial during breaking situations, such as the market correction that occurred in August. Being able to contact clients directly through mobile will let them know that all is well, but that they can reach out to their adviser if they need them.

Companies have already begun to bet on texting.

ROBOS HIT HIGHER ASSETS

The hottest technology trend of 2015 was definitely the use of robo-advisers, and it has already been determined it will be a popular one in 2016, too. Lex Sokolin, partner and chief operating officer of Vanare, a wealth management technology provider, said firms that have the platforms will use them not just for younger clients and the mass affluent, but for the high-net-worth clients up the ladder as well.

At the same time, however, firms will shift their thinking away from robos as a business model to robos as a technology model, said Aaron Klein, chief executive of Riskalyze, a risk assessment platform with its own robo-adviser, Autopilot.

"Everyone thinks robo-advisers are a business model that firms operate in, but the reality is it is a technology model that applies to existing business models," Mr. Klein said. "It is a technology model that lets clients drive the process."

Next year, the role robos play will be more clearly defined, he said.

"Clients value having a financial consigliere," Mr. Klein said. "You want that adviser accessible to you 365 days of the year if you have a problem, but you want the technology accessible to you 24/7."

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