XY Planning Network on the hunt for innovative financial adviser technology for young clients

Young advisers want more technology suitable for student loans, cash flow and debt management

Jun 15, 2016 @ 2:02 pm

By Alessandra Malito

+ Zoom

XY Planning Network, the organization of advisers serving Gen X and Gen Y clients, is searching for new software vendors to address the financial planning issues of young clients.

In an attempt to find these innovators, the group, which has about 250 advisory firm members, has launched its first FinTech competition for startups tackling the problems younger generations face, such as student loans. Submissions will be accepted until July 15, and the top six applicants will be invited to introduce and demonstrate their software at XY Planning Network's annual conference in September, during a session hosted by Bill Winterberg, founder of FPPad, a financial technology consulting and news hub.

"We can't find good technology solutions for some of the problems we are facing," said Michael Kitces, co-founder of XY Planning Network. "If we can't find the technology solutions because they're not out there yet, the next best thing is to create an environment to build the solutions."

Though there are many vendors targeting financial advisers, young planners say they are generally geared toward retirement and could do a better job at supporting the clients with student loans or lack of financial literacy in credit and insurance management. There has been an emphasis on investment management, particularly for small accounts, as robo-advisers have entered the business-to-business market, but there can be more innovation, they say.

The traditional definition of retirement is also changing, said Matt Cosgriff, a financial adviser at Lifewise powered by BerganKDV in Minneapolis, Minn.

"Millennials are redefining what retirement is and what it means, and I don't think software currently supports the non-traditional retirement," he said, adding that some clients may choose to work hard for 20 years and then go part-time or pursue their passions, as opposed to working until they're in their 60's.

One of the biggest issues technology could support advisers in is student loans, which has risen to nearly $1.3 trillion in the country. Mr. Kitces said student loans can be so complex, but there aren't any programs designed for it.

Other aspects of millennial clients' finances that advisers could support with more technology options include career coaching, cash flow and debt management, credit card management and insurance and investment coaching, said Austin Lewis, founder of Rooted Financial Planning in Fort Worth, Texas. He said he would like to see a software provider develop a platform specifically for millennials.

Having these tools created before the $30 trillion wealth transfer expected to occur in the next three decades would be especially helpful, he said.

Mr. Winterberg said he hopes to see smart use of account aggregation to drive better decision-making, as well as new ways to present financial plans and collaborate between clients and advisers. “There are always opportunities in the fintech landscape,” he said.

There is plenty of innovation going on in the financial technology world, though, said Joel Bruckenstein, co-founder of the Technology Tools for Today conference, which hosts industry software vendors every year. He said vendors and custodians are all moving in that direction, though perhaps not as quickly as XYPN would like. The organization will be a catalyst to accelerate that change, however, he said.

"[XYPN] is advocating for their clients, which are relatively a small portion of the total adviser client population," Mr. Bruckenstein said. "Every day that portion is growing and as it grows, you build momentum."


What do you think?

View comments

Recommended for you

Sponsored financial news

Upcoming Event

Sep 26


Investing 2017: Industry at a Crossroads

The advice industry is at a unique inflection point, as the way clients are investing has changed dramatically: Technology has evolved, access to innovative products has changed, and the active vs. passive debate continues to rage on. Advisers... Learn more

Featured video


Cybersecurity threats advisers are seeing right now

The key threats advisers are seeing right now seem to change daily. Michelle Thetford of Schwab Advisor Services explains how to protect yourself and your clients.

Latest news & opinion

Since banking scandal, Wells Fargo advisers with more than $19.2 billion leave firm

Despite a trying year, the firm has said it will sweeten signing bonuses for veteran advisers.

Is LPL's deal sweet enough for NPH's 3,200 reps and advisers?

They will have to decide if the signing package they are being offered by LPL makes sense. A lot is hanging in the balance.

Eduardo Repetto to leave Dimensional Fund Advisors

Gerald O'Reilly, currently co-CIO, will take over as co-CEO with David Butler.

Alternative strategies boomed after crisis, but haven't been tested

Because the S&P 500 has outperformed, convincing clients they need protection is a hard sell.

7 ways advisers fixed clients' biggest financial dilemmas

Sometimes it takes creativity, along with knowledge and outside help, to get a client out of a jam.


Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print