InvestmentNews takes advisers through the developments and innovations in technology that’ll change the way you do business today—and tomorrow.
Feb 1, 2014
I just returned from the TD Ameritrade Institutional (TDAI) conference in Orlando, Fla. Outside it was cold and rainy, by the way.Inside, the overlying theme was technology. From announcing easy access dashboard functionality for advisers to the Veo Village of current or future Veo-integrated solution providers, to a variety of speakers on the use of technology in advisers' practices, TDAI's message to advisers was clear: It's time to embrace technology. (Plus: See more of InvestmentNews' coverage of TDAI 2014)What fascinated me was not just the push for technology's role in an efficiently run practice. Rather, it was the need for client-facing technology. Panels and speakers such as Bill Winterberg and Joel Bruckenstein emphasized that as investors become more tech savvy and younger investors enter the client pool, advisers must utilize sophisticated technology and communicate using cutting-edge tools to woo and keep clients. Using... Read full post
Jan 30, 2014
I've noticed a common root cause underlying complaints raised by many advisers: Old or fringe technology tools.We all hear colleagues share frustrations about how long it takes to run their billing, identify exposure to a certain asset across their client base, re-balance and other recurring tasks. These tasks are often hard, but the processes needn't be. That's a difference: advisory work is hard, requiring analytical and interpersonal acumen, but how we execute this work can be made less difficult — less cumbersome, more repeatable and automated. I think the difficulty of a process often is the biggest cause of avoidable stress in our work.Tasks can be automated if they are understood and made repeatable. Often, the best ideas about how to accomplish this comes from top technology firms that identify best practices from across the industry and incorporate them into their code. The result is a simpler way to accomplish a task.... Read full post
Jan 27, 2014
Michael Kitces' previous blog pointed out the projected revenues of Wealthfront, the Silicon Valley online financial adviser, and its status as a potentially major or niche player. The real story behind these ventures is not the venture itself but rather the transformation of money as a digital medium. This will transform the current gatekeepers of capital into new roles. Robo-advisers are the shiny new toys that have garnered significantly more attention than is merited based on their trajectory. Ultimately, the internal rate of return on their businesses, in order to justify their capital outlay, will be the true measure of success. Many of the institutions invested in these companies can roughly afford a five to seven year time horizon and will pull the plug or be significant nuisances if internal IRR hurdles are not achieved. To put it bluntly, Robo-advisers are not running a lifestyle practice. Let's take Wealthfront. According... Read full post
Jan 22, 2014
I recently had the good fortune of attending a half-day seminar at Qualcomm Technologies Inc. on building a culture of innovation. At first blush, it might seem that the focus of a technology company would bear no relevance to an advisory practice. But as I listened to the presentations, I realized that many ideas were applicable to our businesses. What struck me as an essential element of Qualcomm's great success is its multifaceted approach to encouraging innovation. At the core of its culture is a business model that supports risk taking. Their slogan is “What if?” According to the big plaque hanging in Qualcomm headquarters, “At the core of Qualcomm is the idea, and every idea is rooted in a 'what if?' moment. The ability to question and push boundaries is who we are and what we do.”Great leadership is the key. Without buy-in from the top, the spirit of innovation will be crushed. Leadership is responsible... Read full post
Jan 20, 2014
At the beginning of the year, it became apparent during our budget review that managing the operations of our firm resembled more a Best Buy operations meeting than that of a wealth management firm. All that was missing were the blue shirts. Our discussions centered on servicing computer towers, laptops and an increasing rate of mobile phones (around 16). We did not even consider tablets as they float around in the ether. In addition, there are another four or five employees who take calls or engage in e-mail with their own personal phones while away from the office.Before my anxiety expanded like a stent balloon, our technology and business leads uttered the acronyms BYOD and MDM as a way to maintain and oversee our mobile strategy.Our firm is instituting a Bring Your Own Device policy as part of our new Mobile Device Management strategy. I suspect most, if not all, firms will become quite familiar with these acronyms in the months... Read full post
Jan 16, 2014
I often talk to financial advisers who tell me they should be doing social-media marketing. My response is always, “Why?” If you have read any industry publication in the last five years, you can't help but be convinced that social media will solve all your prospecting woes. But in reality, if you are like most advisers, social media probably won't work for you. (Has financial press overhyped social media?) Here is why.You'll use canned content. If you are like many advisers who want to engage in social media, but don't have the time, you'll seek out a service that will post generic content automatically to your social-media profiles so that you don't have to do a thing. This is even truer if you have strict compliance restrictions requiring you to use preapproved content. Posting generic content on social media is a huge waste of time and money since it is the same information everyone else is posting and is guaranteed to... Read full post
Jan 15, 2014
Looking for the future of adviser technology? Then look no further than the annual Consumer Electronics Show, the massive international electronics and technology trade show held every year in Las Vegas. Because most innovations in business technology trace their roots to innovations originally targeted towards consumers, there is much to be learned from CES for what technology advisers will be using in the future to manage the wealth of their clients.Clearly, the top buzz at CES in 2014 is the “Internet of All Things,” a theme that points out the massive growth in the number of devices connected to the Internet. No longer the domain of computers, tablets and smartphones, connectivity to the Internet has reached everyday items such as appliances, garage doors, toothbrushes, automobiles and even wearable technology such as health monitoring wristbands, exercise trackers, watches and of course, the much-hyped Google Glass.... Read full post
Jan 14, 2014
Online financial adviser Wealthfront Inc. has passed $500 million in assets under management, putting it at the lead of "robo-adviser" offerings that also include Betterment (which recently reported $360 million of AUM) and Personal Capital Corp. (over $200 million of AUM). To say the least, at these sizes, it becomes increasingly difficult to ignore the strides that robo-advisers are making.Yet at the same time, Wealthfront chief operating officer Adam Nash emphasizes that Wealthfront's clientele is disproportionately from Silicon Valley, where Wealthfront itself has set its roots; the companies where Wealthfront has the most clients include Google, Facebook, LinkedIn, Microsoft, Twitter, and other tech heavyweights. A separate article on the Wealthfront announcement notes that some 55% of Wealthfront clients are under the age of 35.Don't Miss: What advisers can provide for clients that robo-advisers can'tSuch a uniquely focused... Read full post
Jan 10, 2014
inStream abandons free plan, introduces subscription pricing from FPPad.com.Financial planning software startup inStream Solutions drops its free pricing plan, switches to annual subscription model.Technology for Planners: Trends, Spending, and the Rise of Robo Advisers from the Journal of Financial Planning.Technology is essential to operating a successful and profitable planning practice. Whether it's software integration, mobile devices, cloud computing, or the latest on so-called robo advisers, you've got questions. The Journal's practitioner editor, Michael Kitces, uncovers the answers in this roundtable discussion with tech experts Joel Bruckenstein, CFP, Jennifer Goldman, CFP, JP Nicols, CFP, and Bill Winterberg, CFP.Bill Good Marketing Integrates Gorilla with Redtail CRMCRM systems Gorilla and Redtail Technology collaborate to address major trends affecting financial advisers.Exclusive new content & videos from Advisor... Read full post
12:01 am EST
I am one of the many advisers who apply modern portfolio theory in our investment strategy and use carefully crafted portfolio allocation models. For each risk level, a model will be constructed of specific percentages of asset classes based on so-called “efficient frontier” calculations designed to produce the greatest return.That's all well and good, but how do we determine the efficient frontier or, stated more simply, how do we calculate our allocation models?Using an optimizer does not produce black-and-white answers. If left unconstrained, or without guidelines, the software often recommends portfolios consisting of high percentages of a limited number of asset classes.For example, one year, my optimizer recommended a portfolio containing all small-cap-value equities and emerging-markets bonds. Another time, the optimized portfolio was heavily weighted toward real estate. I certainly couldn't use models like these for ... Read full post
All content in the IN Tech blog was created by third-party author who is solely responsible for the content contained therein. Posts in the IN Tech blog do not necessarily reflect the opinion or approval of InvestmentNews.
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February 27, 2014