Advice industry leaders focused on improving the digital client experience

Top custodians, broker-dealers and RIAs addressed the challenges of building an Uber-like platform for clients

Jun 26, 2019 @ 4:04 pm

By Ryan W. Neal

With most advisers on their way to having a core technology stack in place that digitizes much of their day-to-day tasks, industry leaders are now turning their attention from the back office to the front of the house.

Because for many advisers, the technology that clients use to interact with the firm just isn't up to par. No one doubts advisers have more to offer than the relatively simple allocation strategies provided at digital advice startups. However, the digital experience offered by automated advisers like Betterment and Wealthfront is still light years beyond what traditional firms can provide.

"I think one of the challenges that we're facing is when we digitize, we digitize portions of the experience," said Apurva Mehta, chief technology officer and head of architecture at UBS Wealth Management Americas, at an InvestmentNews Fintech Think Tank in May. "You may build this elaborate, beautiful client experience and then you're going to fax them a form to sign."

"You either digitize the whole thing or nothing at all because it's silly to do partials; it actually reflects poorly that we didn't think through what the eventual journey is going to be," Mr. Mehta said.

With consumer-facing technology giants inching their way into financial services, making financial services as intuitive and easy-to-use as Netflix, Uber or Amazon is paramount for the incumbent industry. Standing in the way of a truly Uber-like experience for clients is a fragmented financial advice industry.

(More: When evaluating technology, advisers increasingly focus on the client experience)

Fintech platforms like Quicken mortgage, for example, can offer such streamlined experiences because it's only one product and one platform from a single company.

Financial advice is much more complex. Just consider something as small as account registration types, said Lisa Burns, senior vice president of strategic platform development at Fidelity Investments.

"[Institutional firms] want to step a toe into it because the amount of work it would take to do this, it's going to be a multi-million-dollar project," Ms. Burns said. "Before we go over and overhaul out entire infrastructure, we want to test this first."

At the two-day think tank and roundtable, executives from custodians, broker-dealers and RIAs focused on four areas of the client experience: prospecting, new client onboarding, ongoing management and digital communication.

The discussions showed that despite all the digital marketing tools available to advisers, most prospecting still relies on analog referrals and word-of-mouth.

Consumers are more well-informed than ever before thanks to Google, so advisers need to take advantage of data to deliver targeted messaging relative to the services they provide. The adviser platform of the future must integrate with an adviser's website and support customized content to keep a prospect engaged, the participants concluded.

Ideally, technology can guide a prospect all the way through to opening a new account entirely, but it also can integrate the adviser at any step of the process to answer client questions. Digitizing the process for prospects can also improve an area many said remains the worst part of an advisory experience — onboarding a new client.

Advisers still spend too much time manually gathering information and inputting it into a brokerage or custodial platform in order to simply open a new account.

There also is no consistency across the industry on which forms can be completed digitally using an electronic signature, said Ladenburg Thalmann chief information officer Doreen Griffith. For her, and several other participants, institutional firms should focus less on flashy new technologies like AI and refocus on perfecting simple client tasks, such as opening and funding accounts.

"We're going back to that basic," Ms. Griffith said. "Basic data transmission standardization would be such a leap forward with us trying to meet the needs of financial advisers."

(More: Advisers have their sights set on these fintech tools)

Advisers also would like to see some improvement in the ongoing management they provide clients.

For example, Andrew Altfest, president of Altfest Personal Wealth Management, would like to see financial planning become more proactive and behavioral, identifying and recommending new opportunities to engage with clients.

Technology platforms also should have greater support for digital communications, whether that means video conferencing, phone calls or text chat, he said.

"A highly personalized experience is taking in real-time data about your clients and turning that into recommendations on how to engage your client," said Richard Keltner, director of product management and investment services, Fiserv Investment Services.

He said the industry is on the verge of offering such applications.

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