Ladenburg partnering advisers with startups to accelerate tech innovation

Ladenburg Thalmann is trying a unique approach to encourage technology innovation at the independent broker-dealers under its umbrella.

The Ladenburg Innovation Lab, launched earlier this year, is bringing together growth-oriented financial advisers and early-stage fintech startups to examine how the latest technology can change the way financial advice is delivered.

The idea is to let these advisers, deliberately selected by Ladenburg as “forward-thinking,” test new technology products, ideas and business practices to see what works and what doesn’t. This feedback can help the startups further development of their product, and help inform Ladenburg’s efforts to identify investment opportunities in technology.

“These efforts reflect our conviction that the best days are yet to come for the financial advice industry, and that the greatest growth opportunities are within the reach of well-resourced firms that actively engage with their advisers in areas that are at the intersection of innovation, strategy and technology,” said Adam Malamed, Ladenburg’s executive vice president and chief operating officer, in a statement.

The initiative kicked off with the company’s inaugural Innovation Symposium held on Tuesday in San Francisco. Ladenburg’s home office leaders and 36 advisers from Securities America, Triad Advisors, KMS Financial Services, Investacorp and Securities Service Network met with tech-focused venture capitalists and the chief executives of 20 tech startups.

The discussions created a blueprint for how Ladenburg IBDs can collaborate with Silicon Valley to get ahead of the tech curve and seize new opportunities for growth, said Dan Sachar, the vice president of enterprise innovation and head of the Ladenburg Innovation Lab.

The advisers identified which ideas they want to test out in their firms. Over the rest of the year, they will provide results and data to drive how Ladenburg invests, adopts and implements technology across its entire network of 4,300 advisers.

(More:​ Brokerage firms hunt for fintech in early stage development)

Ladenburg is still investing in current technology for its advisers, but the initiative is aimed at next-generation tools that may be five to 10 years away, Mr. Sachar said. In theory, the firm can get a competitive advantage by arming advisers with the latest tools while also guarding against future disruptors.

“We’re really starting to think a little bit broader, macro, and populate that road to the future with a whole variety of tests and initiatives,” he said.

One of the companies working with the Ladenburg lab is Track.Tax, a startup focused on helping self-employed people with their taxes with automation. Track.Tax went through the Envestnet Yodlee technology innovator, which introduced co-founder and CEO Trent Bigelow to the Ladenburg Lab.

Mr. Bigelow said he examined custodians and wirehouses as possible distribution channels for his product, but ultimately decided on the Ladenburg initiative for the opportunity to work with client-facing advisers.

“This is like a time machine. We’re traveling forward to get out product in the hands of advisers,” Mr. Bigelow said. “From a couple of advisers, we’ll see early success or see what is not working.”

“That’s how Silicon Valley works, so [Mr. Sachar] is speaking my language,” he added.

Mr. Bigelow declined to comment whether or not Ladenburg has made a financial investment in the company, but said he’s excited about exploring a possible partnership.

Nina O’Neal, a partner and investment adviser with Archer Investment Management, a firm affiliated with Triad Advisors, participated in the event and will be one of the advisers test-driving some of the technology. She said the symposium made it clear that Ladenburg is “taking a proactive role” in identifying new technology that may help advisers stay ahead of the curve.

Ms. O’Neal echoed comments made by Mr. Sachar that the innovation initiative is meant be offensive — generating competitive advantages by arming advisers with the latest tools — and defensive against future disruption.

“We certainly have our eyes on not being one of those famous stories in business school textbooks for firms who wait too long,” Mr. Sachar said. “By looking at what the innovators are doing and participating in new strategies, we can expand who our advisers can serve.”