Custodians and broker-dealers are trying to strike just the right balance in giving online access to investors. Provide too little — or too much — and the firms risk angering the advisers with whom they work.
“Advisers want to drive the relationship with clients,” said Lucille Mayer, a managing director at Pershing LLC who oversees much of the firm's technology efforts. “What we are seeing, though ... is that they need to complement that model with technology.”
“When it comes to things like financial planning, clients want face-to-face discussions,” said Darrin Courtney, research director for wealth management at research firm CEB TowerGroup LLC. “If it is a complaint, they want to do it over the phone. But overall, for most things, the web is preferred these days when it comes to communications.”
CUSTOMER PREFERENCE
In a survey last year of 1,050 high-net-worth investors (defined as those having in excess of $1 million in investible assets), CEB found that 71% chose “online or the firm's website” as their preferred method of accessing accounts, products and services.
This was followed by 11% each for “in-person meetings” and “over the phone,” with only 5% of respondents selecting “through the mail” as their preferred communications channel.
Another CEB survey, conducted in April, supports those findings.
In that one, 900 high-net-worth investors were asked whether they would stay with their wealth management firm if their adviser were to leave.
CEMENTING RELATIONSHIPS
“The more that people said they used the firm's website, the more likely it was that they said they would stay with the firm even if the adviser left,” Mr. Courtney said.
Among investors who use the firm's site once a week or daily, 56% responded that they would stay in that scenario. With monthly to about weekly use, the figure fell to 51%, and for those investors that never use the firm's website, it fell further to 40%.
While hardly an ironclad indication of investors' preference of a firm's web presence over the personal touch of an adviser, it's evidence that both are important these days.
According to Ms. Mayer, some of that impetus to accommodate clients online originates with investors. Many, especially younger investors, feel entitled to “anywhere, anytime” access to their account information. Another factor, she said, is the undeniable growth in the online brokerage industry.
Marc Butler, managing director of performance-reporting firm Albridge Solutions Inc., a Pershing affiliate, said that part of the new version of Pershing's NetXClient, to be released this month, will incorporate Albridge client reporting as part of the platform.
Giving investors a chance to look up their personal rate of return and allowing them to answer “the really simple question, "How am I doing?' on their own devices, wherever they are,” complements the adviser relationship and fosters more collaboration, not to mention playing to the younger generation's demand for ever more access to information, Mr. Butler said.
NetXClient will be released as both an online offering and a mobile application available in native format on the iPhone and iPad.
Pershing is not alone in bolstering its client offerings.
In January, National Financial Services LLC, the clearing arm of
Fidelity Investments, officially rolled out a new version of its myStreetscape website, as well as native mobile applications for iPhone and Android devices.
A new iPad application for myStreetscape is slated for rollout this year, as well.
This month, the firm began to pilot new client self-service tools for moving money to and from online brokerage accounts. Clients can control check disbursements to the address of record, make electronic fund transfers to or from a designated bank account and transfer funds between their brokerage account and bank accounts affiliated with their broker-dealer.
Similarly, TD Ameritrade Inc. has a full range of mobile offerings for its clients, including ones for the iPhone, iPad, Android and BlackBerry, as well as a dedicated mobile trader application for the iPad. TD Ameritrade Institutional launched its Veo Mobile iPad application for advisers in April 2011.
Schwab Advisor Services launched its first iPhone application for advisers in late June, and an iPad version is scheduled for release by the end of the year.
That said, the firm is pursuing a different strategy when it comes to collaboration between advisers and clients.
Several years ago, the firm launched the Schwab Alliance service, which started out as a means for Schwab's adviser customers to gain direct online access to their accounts and set up various online features, including e-delivery of reports. This lightened the load for advisory firms.
Co-branding features for advisory firms were rolled out at last year's national Impact conference.
This means that the 7,000 RIA firms that keep assets under custody with Schwab can display their own firm's brand and contact information on the pages that clients see when they log in to their Schwab accounts.
“Roughly two-thirds of our advisers have set up these features, and two-thirds of the clients with access had logins over the last quarter,” said Brian Shenson, a managing director with Schwab Advisor Services. That means that thousands of clients and firms are accessing the accounts, according to Mr. Shenson.
The Alliance site provides an end-client with a view of his or her basic balance, positions and history information, a place to get statements, and the ability to move money, as well as place trades.
“Advisers get alerted if the end-client actually places a trade,” Mr. Shenson said, adding that SAS has noted an equal level of interest in terms of advisers' offering their own websites to clients.
“Everything from publishing quarter-end statements, all the way out to rich-news-feed channels to augment the information that clients may get elsewhere,” Mr. Shenson said. “We see diverse interests in terms of what everyone wants.”
“The real challenge for everyone is advisers' goal of keeping their investors focused on the long-term picture,” Mr. Shenson said.
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