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The coming wave of adviser technology convergence

Advice industry is in the early innings of what promises to be a new period of major technological change

Feb 4, 2016 @ 10:00 am

By Douglas Winter

New financial technologies often evolve independent of one another to solve a specific problem, then converge as they mature. At present, the advice industry is in the early innings of what promises to be a new period of major technological change.

This includes the ongoing disruption caused by the robo-advisers, the growing adoption of CRM software to manage client relationships, and the automation of everything from content generation to compliance.

In keeping with historical norms, these technologies have generally evolved separately, with offerings from a variety of vendors. But it's clear that for them to really have an impact on how advisers do business they will need to converge at some point, or at least learn to talk with one another. That's happening quickly. Going forward, many of these new tools are likely to coalesce around a simple, but powerful idea: a growing focus on measuring what works.

CRMs allow for more effective targeting, supported by data analysis; data repositories are increasingly able to share information across an organization; and content is being digitized, making it much easier to provide real-time updates and distribution over all kinds of platforms.

New tools are introducing more robust measuring capabilities into the process, including real-time analysis of content usage and engagement, giving marketing teams more precise insight into what's being used in the field.

(Related read: Tech tools that help advisers protect client data)

Much of this is being driven by technology, but there are other supporting factors as well. The millennial generation is known to be more tech-savvy, and more interested in tech-driven communication, mobile access, and personalized content.

They are likely to be less than impressed by a pitch book that contains dated, generic information on investing strategy and financial products, and stick figure examples of their life circumstances. There is, too, the general aging of the current generation of financial advisers.

With more advisers retiring every day, there will be a premium placed on the ability to efficiently serve this emerging demographic.

In the end, though, it's about using technology to strengthen relationships and improve communication.

This, again, is driving convergence, with clear benefits for both advisers and their clients. CRM data can now be pulled to provide a current picture of an individual's life circumstances, combined with client-specific information on portfolio holdings and investment preferences, and used to generate reports or investment recommendations that can be delivered over a smart phone or a tablet.

Fund-specific information from Morningstar or other third-party vendors can be included, as well. During the course of a meeting with a client or prospect, the adviser has the opportunity to react in real time, modifying the presentation to reflect client input. Further, with state-of-the-art content management tools, the relevant compliance language is added automatically.

Client communication no longer has to be a one-way street, with marketing coming up with ideas, pushing them out across the organization, and waiting to see what happens. Near real-time feedback from the field is now possible. This quickly provides an understanding of what works and what doesn't, down to individual page views of an online presentation – invaluable insights that can be put to work in helping to re-target sales efforts, develop client relationships and generate new business.

(More insight: 5 adviser tech trends that will define 2016)

As recently as a few years ago, much of this was not possible. The individual technologies were still maturing, many had yet to be adopted by financial advisers, and the ability of the platforms to easily share information did not exist.

But like everything else in our social media-driven world, there is an expectation that the advice business will become more personalized and more easily accessible. When the competition is a robo-driven online platform, the advice models face pressure to change.

In our own corner of the world, content automation, we have seen increasing interest in our “LiveDocs” technology which allows materials to be updated on the fly by pulling from CRM, product, and portfolio information across an organization. Back at the home office, technologies like this allow marketing to track what's being used.

Take, for example, a hypothetical sales presentation made to a 30-year-old prospect, married, with a two-year old child.

The pitch book includes both a small-cap growth fund and a high-yield bond fund option. The feedback shows that the adviser spent 30 minutes on the small-cap product, but just five on the bond fund. For one adviser, that's an anecdote to help guide future interactions; across a large organization, that's data and it can be used to direct future marketing outreach.

Technological change is always challenging, and some will adapt better than others. But the efficiency that can be gained when systems converge and talk is compelling. Understanding this will allow advisers to better serve existing clients, and position their organizations to succeed with the up-and-coming generation of investors.

Doug Winter is CEO of Seismic, a leading provider of cloud-based content automation solutions for the financial services industry.

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