Financial advice increasingly technology-enhanced

The financial advice industry has largely sat dormant as society at large has undergone a sweeping technology revolution. But that dynamic is set to shift over the next few years, according to a panel of adviser technology experts.

“You look at other industries like medical, and the technologies they have are amazing,” said Edmond Walters, chief executive of Apprise Labs and the founder of eMoney Advisor. “If you look at our industry, we’re so far behind.”

Mr. Walters, who discussed adviser technology along with other experts at InvestmentNews‘ Future of Financial Advice roundtable, said advisers typically present high-net-worth clients who are worth tens of millions of dollars with “ridiculously horrible reports,” and then ask those clients “to trust us from day one.”

Ron Carson, founder and CEO of advisory firm Carson Group, said the wealth management profession has been “dramatically overpaid” for the value it has delivered to clients.

‘Insulated’ from innovation

“Financial services has been insulated from a lot of the innovation that’s taken place outside of financial services,” Mr. Carson said. “We’re at a point where if we’re not providing value-added services, over-the-wall technology is going to, and has started to already.”

But the industry is quickly shifting, panelists said.

(More:​ Future of advice is wealth planning across the household)

Mark Casady, founder and general partner of Vestigo Ventures, which invests primarily in early-stage fintech companies, said technology has begun to move “downscale” to smaller investors. That’s similar to what happened with credit cards, he said, which were originally offered solely to wealthy individuals but are now used broadly.

“Really inexpensive technology is coming to the masses,” said Mr. Casady, former CEO of independent broker-dealer LPL Financial.

This also will allow advisers to be twice as productive as they are today, and deliver advice for less.

The lack of end-to-end data integration — so advisers can plan around multiple client accounts and financial products — is one problem that financial advice technology has been trying to solve.

“The issue is, how do you connect the dots?” asked Jack Sharry, executive vice president of LifeYield.

Panelists also offered words of caution.

“What I think the industry sometimes misses is once data becomes prevalent and really easy to get to, it will change the nature of who can compete,” Mr. Casady said, stressing that this dynamic will be present in a few years based on the current pace of technology development.

Craig Pfeiffer, CEO of the Money Management Institute, said the industry must be “really careful” with tech development.

(More: Top performing advice firms have a distinctive focus on technology)

Ultimately, brand loyalty flows from consumer to business, not from business to consumer, he said.

“The loyalty clock restarts with the next shiny object,” he said.