Raymond James Financial will introduce a digital advice platform for advisers to use with clients by year end, though it still has no intention of providing direct robo advice to clients.
Through its affiliated advisers' websites, clients will be able to create accounts, set goals, and gain access to investment recommendations based on five risk models, said Bella Allaire, Raymond James' executive vice president of technology and operations. The clients advisers will have to sign off on those recommendations before the actions are completed.
“It's a lot of automation, but the adviser will still have oversight,” Ms. Allaire said. “Advisers know the client better than any technology can predict.”
Called “Connected Advisor,” the system will integrate with the independent broker-dealer's other digital tools, such as data aggregation. Raymond James will not charge advisers more to use the digital advice platform, so it will be up to advisers to decide whether they adjust their fees for clients who use the automated tool. Raymond James, which spends about $250 million a year on technology, developed its digital advice tool over the past three to four years.
The digital advice offer is important for Raymond James in order to continue attracting advisers and their clients' assets.
“Raymond James' representatives likely don't have the flexibility to implement the existing third-party platforms without prior compliance approval, and the lack of a platform offering puts Raymond James reps at a competitive disadvantage in the marketplace, especially from a technology standpoint,” financial technology expert Bill Winterberg said in an email.
This is a critical step for Raymond James to provide this technology to help its advisers “more efficiently manage diversified, low-cost portfolios for clients, which is an offering that has rapidly become table stakes at many of the largest asset management institutions today," he said.
The St. Petersburg, Fla.-based firm plans to keep itself at arms length when it comes to the relationship between its advisers and their clients, Ms. Allaire said.
Some well-known financial firms like Vanguard Group provide advisers a robo solution to offer their clients, as well as an automated platform for retail investors.
Raymond James, which has about $ 617 billion in assets under management and approximately 7,100 advisers, built its own digital advice platform, instead of choosing to integrate with one of the dozen or so robo advice firms aimed at advisers.
That was necessary to make sure the platform is easy to use and that the data going into the advice component was accurate, Ms. Allaire said.
The automated tools will come with advanced analytics to give advisers personal information about their clients, such as pointing out a child who may need college savings. It will even mine the voice and data communications, such as emails or social media exchanges, between advisers and clients to point out certain situations to advisers.
“Sometimes when you have a conversation you can miss things,” Ms. Allaire said.
The tool, for instance, might remind an adviser that the client mentioned they need some additional insurance or were looking to receive information about estate planning.