Adviser fintech moving from the back office to client interactions

Voice or facial recognition technology could be used to help advisers formulate a client's true risk profile

Apr 18, 2019 @ 5:00 pm

By Ryan W. Neal

Adviser technology has historically focused on improving back-office efficiency. That is starting to change.

Adviser fintech is increasingly focused on making experiences better for clients, said Dani Fava, director of institutional innovation at TD Ameritrade Institutional. Ms. Fava's comments were made at InvestmentNews' Innovation Summit in New York on Wednesday.

(More: Financial advisers at risk if they don't consistently innovate)

For Ms. Fava, the most interesting area of fintech innovation is in voice recognition.

"We see the future of voice making email obsolete," Ms. Fava said.

Voice technology can also help improve risk analytics technology, an area Ms. Fava said is most in need of innovation. Current risk questionnaires only assess a client at one point in time, and people rarely give honest answers. She would like to see risk analytics digitally pull information about a client's spending, how they manage budgets or pay bills, and use voice or facial recognition to evaluate subconscious reactions to financial questions.

Envestnet executive managing director Frank Coates agreed, adding that voice can go beyond providing a new way to interact with computers. Advisers should be able to get information more naturally, such as just asking "which clients should I be most concerned about" and getting an actionable answer.

"We can do a ton with predictive analytics based on knowing their finances," Mr. Coates said. The challenge is getting the required data.

(More: Moneyball for financial advisers)

"It's still really difficult to get all of that data into a format that it can be spoken to and asked those questions," Mr. Coates said.

Orion Advisor Services CEO Eric Clarke, a 2019 InvestmentNews Innovation Award winner, said data applications in the client experience go beyond voice recognition. For example, technology can help advisers quantify the value they provide to clients, something the industry has traditionally done a poor job of, Mr. Clarke said.

(More: InvestmentNews announces 2019 Innovation Awards winners)

He also sees voice and facial recognition software playing a role in how advisers influence client behavior.

"We need more and better behavioral coaching tools that help advisers help clients receive better outcomes," Mr. Clarke said. "Advisers can show clients what they need to do to become a better investor."

This could help improve the negative opinions many investors feel towards the financial advice industry, he added.

Outside of how clients interact with advisers, Ms. Fava sees a great deal of innovation in investment management, which is contributing to driving down prices. New developments in artificial intelligence are improving asset allocation strategies and creating actively managed portfolios around new sets of data.


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