Finding ROI in the adviser tech stack

Fintech is driving value for financial advisory firms, but the return on investment doesn’t come to fruition until advisers are spending more of their time building client relationships thanks to their tech stacks automating tedious tasks and connecting data to provide intelligent actions. 

The industry’s tech providers, in turn, have work to do to solve the lack of integration between core software applications so advisers can bear the fruit of their investments in high-quality technology, panelists said during an InvestmentNews webinar Thursday. 

For advisers, that means building their tech stacks based on a tech provider's ability to help connect data to processes and information, said panelist David Knoch, CEO of Docupace. One way to do so is by finding the fintech firm that is already connecting data through its own integrated suite of offerings, he said. 

For example, if an adviser is looking at portfolio accounting systems, they should want a tool that not only keeps track of the position of clients, but something that’s running comprehensive model management programs across multiple clients.

Moreover, if an adviser has a workflow management system, they should check if it’s actually running data through connected application programming interfaces as opposed to just storing documents and data, Knoch said.

“[Advisers] are rightly demanding better integrations of their business partners on the technology side, and I think we all owe it to them,” Knoch said. “It's kind of a shame that this is as big of a tech pain point.” 

Without proper data connectivity, advisers are left to deal with point solutions and figure out that interconnectedness, taking time away from the core trend driving every business, client experiences, Knoch said. 

“The terms of client experiences are being set by other industries, and we have no excuse not to adapt,” said panelist Niharika Shah, CEO of Clout by Tifin. “That is the opportunity cost, which is a huge part of the ROI calculation.” 

Shah suggests advisers remember two main characteristics when building a tech stack: Is it efficient and is it effective, she said. Efficiency can be driven by automation, but that can only get an adviser so far in terms of delivering returns, she said. “The bigger opportunity lies in effectiveness, which is what we can do that we weren’t able to do before at scale.” 

That’s where data connectivity comes in, and every company should be using “real time” intelligent data to deliver personalization or “actionable intelligence," Shah said. 

Using her own fintech Clout as an example, the firm monitors what is going on outside the news space and ingests thought leadership content that advisers can then use to create their own marketing, Shah said. 

“If there is a news event that is happening externally, we have the ability to analyze that news event, map it to an adviser's client base, and then proactively alert them with that information with potential suggestions on how to react to that — that is effectiveness, that is now creating better client outcomes in the end.

“That's an example of how we can take data and turn it into a signal that creates value,” she said.