Advisers face pressure to automate workflows

Market forces like fee compression and new regulations are driving the shift, but resistance to tech remains strong

Dec 6, 2017 @ 6:16 pm

By Ryan W. Neal

Advisers are increasingly being told they need to adopt automated workflows into their practice.

If firms can implement documented and consistent processes for things like opening accounts, scheduling meetings, and creating financial plans, they can automate these processes with technology. The increased efficiency will help advisers scale their business, or so the messaging goes from custodians, technology vendors, consultants and other companies looking to sell their services to advisers.

Raef Lee, the managing director and head of new services and strategic partnerships at SEI Advisor Network, a turnkey asset management platform with $62 billion in advisers' assets under management, said his company is doing a lot of work with advisers on implementing automated workflows.

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Mr. Lee believes it's an idea rising to the fore of practice management because of market forces like new technology, compressed fees and new regulations. Advisers need to find ways to work more efficiently to serve a greater number of clients while also demonstrating their value.


"If you get a consistent process, you get an organization that can work together closely and well," Mr. Lee said, adding that the key is building the processes into an adviser's CRM. Mr. Lee said SEI's helps advisers have an automated process that guides the adviser from the first meeting with a prospect to opening an account, generating reports and scheduling follow-up meetings. "If you pull that off, you start to see advisers' firm operate in a totally different manner."

At the same time, regulators are requiring advisers to document every step of the process to prove they made recommendations in the best interest of the client. John Faustino, the chief product and strategy officer at Fi360, said workflows are important for firms to comply with the Department of Labor's fiduciary rule.

(More: Seven business strategies for advisers in 2018)

If firms want to be profitable in the fiduciary era, Mr. Faustino said, they need to embrace "consistent, repeatable processes" and technology. He added that demand for Fi360's Toolkit software, which delivers workflows to help manage and document their investment process for fiduciary compliance, is attracting demand from broker-dealers and wirehouses.

"They are using our software not only to enable advisers to follow a fiduciary practice, but for oversight," Mr. Faustino said.

However, Mr. Lee said he still gets some pushback from advisers over implementing these new work procedures. Some of it is just inertia—the whole "if it's not broken, don't fix it" mentality—but other advisers still just don't see the benefits for their firm.

"Advisers are great sales folks, great people persons, but not the same character type that is heavily process-oriented," Mr. Lee said.

Michael Byrnes, the president of Byrnes Consulting, says he's never met an adviser who couldn't improve their practice with better workflows. He says he often sees firms let tasks fall through the cracks because set procedures weren't in place.


In addition to market forces, Mr. Byrnes said advisers are more informed about workflows today because of increased pressure from robo technology. They no longer feel threated by automated advice, he added, but they do understand that they should be implementing technology into their practice the same way industries are.

(More: Your practice needs total digital transformation.)

For example, even dentists now have automated workflows for sending reminders to patients, and advisers want to deliver similar service to their clients.

"From my dentist, sometimes I get text message reminders. They're borderline annoying, but they make sure I don't miss the appointment," Mr. Byrnes said.

And after an extended period of prosperity for investors, Mr. Byrnes said, advisers have increased resources to invest back into their firm and continue growth.

But if automation is handling more and more of the adviser's day-to-day work, how does the adviser justify fees in the era of robo-advisers? Mr. Lee doesn't think the technology would devalue the human advice, if most of the work is done in the back office and not in front of the client.

"All they know is their adviser is turning up to the meeting incredibly well-prepared," Mr. Lee said. "They see a bright, intelligent and well-informed adviser in front of them."


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