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  1. After the frantic pace of day one, T3 became more reflective during its second day. A range of key industry thought leaders provided challenge and analysis that put many of the previous day's announcements in suitable context. What follows is a summary of just a few of the key messages and insights shared. The tone was set by industry veteran Bob Veres @Bobveres. Clearly unafraid of challenging conventional wisdom Veres began by pointing out that growth in the investment industry is stalling as planners are failing to build models and services that are attractive to millennials. He highlighted that frequently those who were most innovative in the 1980s and 90s have become the main constraint on change in their businesses today, particularly by failing to listen to young people within their firms. Older advisors were encouraged not to try and design services for younger consumers themselves, but to give their young colleagues the challenge of building solutions for their own generation of customers. Returning to what has become a recurring theme at T3 he compared traditional client on-boarding procedures to a root canal operation and highlighted the importance of adapting customer interaction to align with changing day-to-day behaviour, for example replacing a quarterly one hour face-to-face meeting with more regular five-minute Skype conversations. Later in the day Ian Sheridan from Vestigo Ventures @VestigoVentures and Andy Putterman from 1812 Park @1812Park ran a similarly challenging session looking at issues firms need to consider if they are to be successful in servicing customers in 2025. Sheridan highlighting his considerable experience with preference algorithms and big data, explained how by monitoring vast amounts of data (4 billion lines of code 20 million interactions and 720 million profiles a day) customer behaviour can be accurately predicted and so facilitate the design of highly personalised solutions. Putterman challenged advisors who may be tempted to ignore millennials as clients today, because of their lack of investable assets, to find different operating models as by the time young customers have accumulated the assets advisors seek, millennials will also have found other advisors. Delegates were encouraged to build relationships with customers while they have debt, to build loyalty for the future when they will have accumulated savings. During the day I also had a chance to take in a number of demonstrations. Tolerisk @tolerisk presented a standalone risk profile link proposition that includes capacity for loss analysis; something which usually needs to be addressed by a separate cash flow analysis. They are a relatively new player but well worth a look. I spent some time with Steve Ambuul of Asset-Map @AssetMapLLC who have an attractively simple interface for helping focus clients around key decisions they need to take. Good stuff. Similarly Edward Dressel @ask_TRAK of Trust Builders provided me with an overview of their 401k and 403b illustration tools which are also worth exploring. The standout presentation of the day for me came from Jason Gordo of FinLife Partners the standalone white label software solution that is part of United Capital @United_Capital. I’ve known Jason since his days at Flexscore ( and always found him to be a true innovator when it comes to creating simple solutions which help customers address key decisions. In this session he suggested that in the future firms will be valued by “information under management” rather than assets. Finlife’s software which can be found at is a delightful gamification tool. It aims to build an “Honest Conversation” with the customer and encourages clients to focus on their real priorities and particularly identify where couples may have different priorities. Gordo says it aims to be “At the intersection where life and money meet. Enabling customers to have clarity confidence and control over their financial life.” This is really all about building an understanding of consumers real priorities, delivering financial advice as something that touches their day-to-day lives in a way clients' understand and are comfortable with, rather than talking at consumers using a language they don’t understand. In my experience all too often financial advisors become so bound up in what they consider fascinating, it’s all too easy to leave the client confused. Honest Conversations takes financial advice back to basics and is clearly a very powerful tool for building trust. Although just one part of the FinLife Partners offering it is well worth a detailed look. So those are the highlights of my second day of T3 2017; I hope they are helpful.
  2. The first full morning of T3 2017 saw a cacophony of announcements worthy of the opening 30 minutes of Saving Private Ryan. The morning seemed to encompass an endless stream of outstanding product innovation and stunning research conclusions, making a clear case for a very different future for how financial advice is delivered. Many of these warrant extensive analysis in their own right but I'll try and keep this summary concise and readable and focus on the highlights. First up Riskalyse presented their new Premier product with a whole range of additional features including Client Dashboards, Retirement Plans, Account Opening and Data Sharing. If US advisors are anything like their British counterparts some may bulk at the $245 per advisor per month charge for a system that will still need to be complemented by several other external components, however, when one looks at the level of automation that Riskalyse Premier can offer it should be possible to recoup the monthly cost from the time-saving in managing just a couple of clients. To me this begs the question what should a realistic budget be for an advisor on a monthly basis to fully address their technology needs. Given the significant evidence presented in Joel Bruckenstein and Mark Bruno’s presentation the day before and various other sources, such as Fidelity, that eAdvisors achieve higher AUM, profitability and perhaps most importantly job satisfaction such additional expenditure should probably be considered money well spent. CEO Aaron Klein then proceeded to sets out his vision for the future of advice being driven by automated account platforms providing advisers with the opportunity to deliver high levels of automation and personalisation. The Riskalyse solution to this issue is their new automated account platform with one click fiduciary technology embedded within the process. This will be delivered as the next part of the next generation of their autopilot service. A series of partners will be available in an Autopilot store including Blackrock, SEI and Morningstar. The service will include powerful capability for advisors to white label third-party investment strategies and if they wish modify them to suit their own preferred recommendations. Clients’ portfolios can then be reviewed and automatically rebalanced in only a few minutes with a full audit trail. The new autopilot service will be available from May with pricing starting from 15 bps, but reducing to 10 bps for most advisors. Next up Advicent presented their latest enhancements to Naviplan including a new Plan Analysis Synopsis client report and a range of enhanced integrations including Quovo custodian feeds. Product manager George Fisher stressed the importance of using full financial aggregation to deliver a comprehensive customer experience. This was a recurring theme from many speakers and it appears that the American advice industry has recognised how powerful such services can be as a consumer engagement tool at a time when so many in the UK is still struggle with this concept. MoneyGuide Pro’s Kevin Krull opened his presentation by putting forward research which seriously challenges much of the conventional wisdom in the financial advice market. Having conducted biometric testing with real consumers the company identified that clients in the 50 to 70 year age group actually prefer virtual meetings with advisors over in person discussions. Full results from this research are to be published in the near future but earlier messages identified a range of reasons why consumers actually responded more positively to virtual advice sessions resulting in significantly larger levels of asset capture by advisors. This obviously supports the actions of the 83% of advisors who it had been identified the previous day now use video conferencing as part of their internal or client communications. Compelling case studies were also presented for the myMoneyGuide service where advisors can offer clients the opportunity to visit the myMoneyGuide lab, complete an online fact find and receive and interim financial planning report which they are encouraged to review with that advisor. One firm succeeded in guiding 123 into the lab process from a single newsletter in just four days creating new investment opportunities worth over $100 million. In a slightly longer campaign over 18 days another firm attracted 321 clients representing investment opportunities totalling $265 million with an average account size of $913,000. There will be many financial advisors who will be horrified by even the suggestion that rather than conduct their initial fact-finding in person with the client they should guide them towards an online service to supply their initial information, never mind an initial analysis being automatically generated, however the scope of such opportunities is clearly significant. In the UK context I can see significant regulatory challenges arising from the type of auto rebalancing advocated by the Riskalyse and MyMoneyGuide Pro approach to fact-finding and initial analysis. That said, it’s not hard to see how there are considerable consumer benefits to such an approach with enormous potential to drive down the cost of advice. When one also considers the scientific evidence that consumers prefer this approach perhaps it is time to revisit the status quo. Such services would appear ideal for being considered by the FCA’s advice unit where firms are invited to work with the regulator to test if new processes deliver significant consumer benefit and warrant regulatory change. Given the demand for advice services in the UK is now seen as exceeding supply there may be compelling arguments for considering regulatory change in the interests of consumers. eMoney Advisor began their presentation by highlighting that RIAs who have integrated technology within their businesses typically achieve a 20% higher income, spent 32% less time on operational processes and 29% more time on client management as well as serving 15% more clients overall. They also highlighted that younger Americans are far more likely to be willing to pay for advice with 79% of those between 30 and 39 being willing to do so compared with only 44% of over 50s. The company then went on to present not only an exceptional set of tools to improve customer acquisition processes as well as machine and data analytics capability to enable advisors to validate the quality of the data from a compliance perspective. eMoney Advisor really pushed the boundaries of demonstrating what could be achieved using leading edge technology including a prototype of Amazon Alexa to obtain information from a financial advisor. They also outlined their plans to add virtual reality tools to the next generation of their software. I subsequently had the opportunity to experience the prototype service which delivers a stunning experience. Imagine receiving financial advice on the holodeck of the Starship Enterprise and you won’t be too far away. This service really needs to be experienced to be understood. Since 2014 Fidelity have been conducting extensive research to identify differences between advisors who have embraced technology and other firms. SVP Product Management Tom McCarthy presented an updated view of this research based on a further round in 2016. Overall so-called e-advisors have 42% higher AUM, 34% higher AUAM per client and earn 23% more. 80% of the advisors believe their online strategy is more important than other firm initiatives. The company highlighted their extensive additional commitment to enhancing their own technology to support advisors and improve on-boarding experiences for their Wealthscape service. All of this is great from the perspective of American advisors but I can’t help feeling that Fidelity’s UK operation is seriously letting down UK IFAs by any sensible comparison. In the afternoon Dave Welling Co-General Manager of SS&C Advent highlighted changing consumer behaviour especially amongst wealthier clients which is driving them more towards digital advisors. Whilst more traditional firms are embracing robo advice this appears to still not be keeping up with wealthy consumer appetite for such services. He highlighted analysis identifying that investment clients are far more likely to leave advisors because of the lack of timely contact than the performance of investments. Welling also provided a very practical demonstration of the inefficiencies of face-to-face advice highlighting the extent of travel time necessary for an in-person meeting which can be entirely avoidable through screen sharing. Consistently through the day each of the above companies has demonstrated powerful technology to support advisors and liberate them to spend more time focusing on engaging with customers. It was impossible not to be impressed by the commitment of each firm to deliver to their clients the capability to transform financial advice processes, improve customer services and meet increasingly demanding compliance processes. Overall the day convinced me that with the right use of technology it is possible to enable traditional advice firms to support far more customers with the help and advice they need at far lower cost whilst at the same time increasing profits.
  3. This week's Technology Tools for Today conference in Orange County California got off to a great start yesterday afternoon with outstanding presentations from conference host and all round US advisor tech guru Joel Bruckenstein and Investment News associate publisher Mark Bruno each presenting key findings from recent research on the use of technology by American advisors. Bruno kicked off the session with a summary of key findings from the Investment News 2017 advisor technology survey. This is the latest iteration of the biannual study which the company has been conducting since 2011 giving them the ability to provide useful comparisons with previous years, indicate trends, and areas of growth or decline. Nearly 300 firms responded to what is an exhaustive questionnaire taking nearly an hour to complete. It even goes into the firm's financials so gives a good indication of what successful firms are doing. Typically respondents benefit from higher than average revenues and margins. Overall the report identifies that whilst advisor technology spending continues to increase it may be beginning to level out or perhaps reaching a point of maturity. Whilst the amount advisors spent year on year on software has significantly increased, hardware spending has hardly altered over the last few years. There is however an increased willingness for advisors to pay for external third-party support to successfully implement technology. I find this a stark contrast to the UK perhaps indicating why US advisors are more advanced in their IT adoption. The main growth areas Identified in the latest study are compliance and document management services, this is understandable against the background of the US Department of Labour Fiduciary which was due to take effect from April, although there are indications that the Trump administration may push this back. Similar to the pre-RDR mood in the UK most US advisors are resistant to the change however it’s notable that many more forward thinking independent RIA see the higher professional standards as an opportunity to differentiate themselves to clients. Generally these firms have seen their role as acting in the client's interest so the proposed changes are seen by many as less of a challenge. For the first time the latest study includes the use of risk management tools which just over a third of firms surveyed are now using. Although current regulatory requirements in the US are nowhere near as stringent as the FCA Suitability requirements, it’s clear there is an increasing focus on risk profilIng with some very impressive solutions being demonstrated by some suppliers at T3. The main driver for firms making IT investment is identified as catalysing new and emerging technologies. A strong focus on workflow is recognised which may also be influenced by the move towards higher regulatory obligations. When assessing their investment a firm’s most important measure is seen as the extent to which systems free up professionals time to focus on other activities. 78% of the firms surveyed have now deployed client portals and 60% of their clients typically visit these services once or more per month. This is a powerful indicator of the appetite amongst consumers for personalised online financial information. Advisors see the main two benefits of client portals as providing portfolio performance reporting and account aggregation, which allows the reporting of assets not managed by their firms. No fewer than 83% of those surveyed to use video conferencing software to communicate internally or with clients on a regular basis. Although still limited 7% of these advice firms now offer Robo advice type services with a further 19% planning to roll them out in the next 6 to 12 months. The primary motivation for such development, cited by 70% of firms is a desire to attract new types of customers with the implication being that these would be lower value accounts who would be uneconomic for full-service traditional advice. The sources firms are turning to in order to offer Robo technology are fairly evenly split, third-party software suppliers (32%) are most popular. Broker-dealers and custodians or both are the source for 24% of firms with 18% seeking to build in- house. This seems a high figure given creating technology is unlikely to be a specialist skill for most firms. Only 2% of advisors will source their Robo solution from asset managers demonstrating the increasing risk that asset firms will be locked out of the digital future. Joel Bruckenstein’s presentation of research he had conducted began by highlighting the stark risks around data, particularly that the client is the weakest link. Only 11% of consumers were identified as “very aware” of the risks associated with data security. Chillingly Bruckenstein pointed out that only 2.9% of advice firms believe they have suffered a successful security attack in the last year; some cyber experts believe 100% of firms will have been victims of successful attacks. There is a stark contrast here with the UK. At least in America these issues are being actively discussed by advisors, in the UK such conversations are virtually non-existent. It must only be a matter of time before the FCA acts to enforce data security standards on firms. I hope our industry can start addressing such issues urgently otherwise the consequences for firms could be grave. On a positive note it was identified that technology decisions are increasingly being taken by younger people within advice firms, a trend seen as encouraging as these will be technology natives with greater understanding of the potential of such investment. Financial planning software is clearly seen as the technology that delivers the greatest return on investment for advisors. Just over 20% of firms identified this as the most profitable technology investment, increasing to nearly 25% for independent RIAs. CRM systems are the next most popular for delivering a positive return. A residual 12½% of firms are still not using CRM. The survey also asked the percentage of firms about clients who are 40 or younger. In nearly 2/3 of firms this is less than 25%. Joel Bruckenstein warned that firms who are not growing their younger customers are in fact dying. The two presentations provided a great backdrop for the coming days' demonstrations, lessons and key points from which will appear on this site soon. You can follow Joel on Twitter @FinTechie and Mark @brunz99 The Investment News Adviser Technology study can be ordered from: A link to Joel Bruckenstein’s research will appear here soon so please check back. I’m at T3 until Friday evening looking for subjects for Money Marketing, Corporate Advisor and of course If you are a Technology Supplier with a great story to tell, an advisor with a view on technology or you want to learn more about how the Digital Wealth and Adviser Software markets are evolving in the UK feel free to message me via the T3 app or LinkedIn You can follow me on Twitter @ianmckennaftrc