What's next for financial advice?

We ask the experts to share what parts of the advice business they think need innovation

Dec 21, 2014 @ 12:01 am

By InvestmentNews Staff

It's almost impossible to anticipate when innovation will strike and what it will mean for the future. But InvestmentNews attempted to foresee light bulb moments by asking people in the advisory space which area of their business or the industry overall needs the most innovation.

"Three areas I think will be ripe for innovation in 2015: big data, cybersecurity and the client experience. Advisers aren't using big data today — a lot of data hasn't been made available to them in a usable format. Custodians are starting to aggregate some of that data in a format more easily consumable by advisers, such as with tools to select through it or with visualization. This is only the tip of the iceberg."

Joel Bruckenstein
Publisher of Technology Tools for Today Co-producer of the annual T3 Conference

“There is a major opportunity for the advice industry to continue innovating in the areas of business planning and client service. There are great lessons about building enduring businesses and delivering superior service that should be applied within the RIA world. Advisers can benefit from the expanded use of data to drive decision making and the establishment of performance metrics to help guide the direction of their businesses.”

Geof Brown
Chief executive officer
The National Association of Personal Financial Advisors

“Our clients (advisers) and end investors are demanding secure, immediate, accurate, all-inclusive and simple mobile access to information. And therein lies the challenge. We're used to going to Amazon or eBay and having a simple experience. We have to compare the experience our clients have with us to those non-industry examples. But financial information is not buying a book or a pair of boots, we've got regulation.”

“A lot of work still must be done to develop comprehensive retirement income plans. Investments and insurance should be considered together as a whole, as it's not one or the other, and the objective should be about how to best meet a client's specific financial goals.”

Wade Pfau
Professor of retirement income
The American College

“The thing that we need to weigh with innovation is that even with 40 employees and a billion and a half of assets under management, we have to manage our resources to make sure that our clients are getting the best bang for the buck. We evaluate where others will be paying for innovation that we expect will come to us in a reasonable amount of time compared with where we need to direct dollars.”

Ross Levin
Founding principal and president
Accredited Investors Inc.

“We spend a lot of time talking to advisers about technology. The area we see as a rich opportunity for innovation for advisers is the integrated platform experience. It's a defining opportunity for winning organizations and solutions.”

Victor Fetter
Chief information officer
LPL Financial

“Digital technology will never replace humans as financial advisers; it will, however, empower them … We are working to innovate an ever-enhanced digital experience through which advisers and clients can access information, manage assets and liabilities, and interact with each other.”

Gregory Fleming
Morgan Stanley Wealth Management

“I believe the most significant issue is cash-flow planning in retirement. There are innumerable 'strategies' being touted. Many confuse certainty with safety and I fear most ignore the realities of taxes, transaction costs, a low return environment, inflation, increasing longevity. I'm hoping to interest our doctoral candidate students at Texas Tech to work with me in investigating these issues.”

Harold Evensky
Evensky & Katz/Foldes Financial

“We're starting to see a shift from the traditional Wall Street model of charging too much and delivering too little. Whether it's due to new technology or more efficient asset management tools, investors will refuse to pay 1% or 2% for buy-and-hold portfolios.”

Mebane T. Faber
Chief investment officer and portfolio manager
Cambria Investment Management

“2015 will be marked with finding creative ways to mentor and groom a seasoned financial planner into my practice … My colleagues and I are facing the need to move forward with succession plans, realizing they come to fruition only with an intentional and thoughtful process — and perhaps some innovation and technology can help.”

Janet Stanzak
2014 president of the Financial Planning Association, Principal
Financial Empowerment

“The greatest innovation opportunity we face as a company and an industry is to help clients quickly understand how they're doing and make it easy for them to take the actions needed to achieve their goals. Our innovation efforts serve our clients best when they help us consistently provide the right advice and connect with them wherever they are and whenever they want.”

Joe Nadreau
Managing director of the Innovation and Strategy Group
Wells Fargo Advisors


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