Advisors and vendors gathered last week in Orange County, CA for the annual Technology Tools for Today (T3) conference. There were about 80 vendors and 600 attendees for the largest, independent financial advisor technology conference in the US. I talked to many of the presenters and industry attendees and asked them about their key conference takeaways. I was given many different answers, showing that people got different value from the event. The answers ranged from financial planning innovation and new platforms to the death of robo and “What the heck do we do about the DOL Rule?” But the common thread was the goal of making things as easy as possible for advisors to interact with their prospects and clients. In this post, I’ll cycle through all of these themes.
Financial planning – now!
There were two excellent presentations on financial planning. MoneyGuidePro President Kevin Knull was the more direct of the two, telling the audience that they should act right NOW! His point was that the technology is here today to improve your service to your clients, and advisors are too slow to embrace the depth of today’s capabilities. He also shared MoneyGuidePro’s biometric research, showing that people like to do their planning at home and advisor office visits are stressful. In both cases, the advisor is involved and the MoneyGuidePro software facilitates either method, but he felt that the virtual model is the winning one.
Jessica Liberi, Vice President of Product Management at eMoney Advisor, outlined what is on the eMoney horizon, including an advisor-branded marketing service and other ways that advisors can gain new clients. She shared an interesting stat: Advisors spend an average of $4,000 acquiring a client. She had fun finishing her presentation by using an Amazon Echo and chatting with Alexa as if she were an advisor. Alexa was stubbornly quiet at first, but then came through, providing short bursts of financial information and advice. It was a great way to get the audience thinking of what could be. At the end of the presentation, Jess mentioned that Schwab is working with eMoney to integrate its custodian services. This woke up some of skeptics in the crowd, who had been wondering how long it would take eMoney to be folded into Fidelity and if/when a major custodian integration would ever happen.
Aaron Klein, CEO of Riskalyze, gave a well-rehearsed presentation on new things coming from his company. His announcements caused a lot reaction from the crowd (as did his President Trump impression). Talking with him afterwards, he said that if you are going to do a political impersonation, you have to go all in or not bother.
Riskalyze is expanding its core product with an extension called Riskalyze Premier, which adds new capabilities around client engagement and onboarding efficiency. He also announced a new platform called Autopilot Partner Store, which allows advisors to access the strategies of multiple asset managers, including SEI. It’s a simple way of creating portfolios for clients, leveraging some of the industry’s best asset management thinking.
At the other end of the spectrum, Orion Advisor Services launched a new platform called Eclipse. It’s a trading platform that includes rebalancing and is integrated with Orion’s current reporting and end-client focused platform. The Orion team decided to take a page out of the MoneyGuidePro playbook, who have previously turned up on the T3 stage with drones, and in robot and Iron Man (Marvel superhero, not Ozzy Osbourne) costumes. Orion went the cowboy route and, with various accents and props, explained the advantages of their new service through a western spoof.
The platform market for advisors with these new additions has gotten more complex. Some industry platforms work together and are complementary; some are competitors. Advisors now have to work harder to understand the plethora of options.
Death to robo
One of my favorite Robin Williams bad movies is Death to Smoochy (which also features a young Jon Stewart). I’ve borrowed the title for this section of my post, because a) I like the movie and b) when a popular trend goes down, it sometimes goes down kicking and screaming. A prevalent theme for the conference was the evolution of the robo – and specifically, the demise of the name robo.
I’m trying not to be smug, as it is the story we have been telling for the last two years on this blog and in our white papers. Advisors have little to worry about with robos, as they are pushing into a brand new marketplace that previously did not have advisors. In fact, technology firms in the advisor space have been learning from the robos and have been bringing robo capabilities to their platforms. At the same time, pure robos (those that don’t include a human advisor) have realized that the cost of acquiring a client is just too great and have pivoted to a business model that includes a human. It was a great, short run that has improved our industry.
Jemstep President Simon Roy led a panel that explained this robo transformation. Jemstep was one of the early robos and was acquired by Invesco. Simon claims to be from South Africa (and has the accent), but knows nothing about rugby (which is practically a religion in South Africa). He does, however, know a lot about English soccer, supporting Chelsea, a team that has just had a remarkable season. Really? A South African? (But I digress.) The panel hit hard on the theme that robo technology is now being incorporated into all platforms – especially the account open and client onboarding processes. They said the idea is to understand what the investor wants, rather than the advisor. They posited that our industry has gotten this wrong in the past (and this is hard to argue).
New name for DOL – fiduciary
One thing notably absent from the conference was much comment about the DOL Rule. However, a lot of presenters pitched new services that included the word “fiduciary.” The new administration has entirely confused the DOL rule rollout – it’s uncertain if it wants to cancel or amend the new rule. And it is also having real trouble both in appointing a new head of the Department of Labor and in how to change such a carefully crafted rule. This has put software vendors in a tough spot. To paraphrase Shakespeare, “To DOL Rule or not to DOL Rule?”
For technology companies, this has been painful – compliance technology changes rarely lead to more revenue. We heard the answer to this at the conference in the switch of the conversation to fiduciary. A lot of vendors were swapping out the word DOL and replacing it with fiduciary. This makes sense, as whatever the final incarnation of the DOL Rule is, the genie is out of the bottle about the rising profile of the advisor as fiduciary.
Brian Hamburger, CEO of regulatory compliance consulting firm MarketCounsel, went even further, telling me that he downplayed the DOL Rule in his talk, as there was such advisor fatigue on the topic. He focused instead on cyber security, a very real issue for advisors. I believe if it had not been for the DOL Rule, 2016 would have been the year of cyber security (maybe it still should have been).
I asked my key takeaway question to Joel Bruckenstein, T3’s founder and organizer. He took a forward-looking view and told me that some of the most interesting conversations were around blockchain. The best known example of blockchain is Bitcoin, but it has wider applications, as it is basically a general ledger system that allows guaranteed, transparent transactions. Financial services is a fertile ground for this type of technology.
Because the concept is so geeky, the general public is having a hard time understanding the scope of the potential applications. Over the next few years, Joel told me, we will see tangible examples in place that will demonstrate the capability.
Tim Welsh of Nexus Strategy (@NexusStrategy) has reported on the T3 conference for www.wealthmanagement.com and his articles can be seen here: Day 1 and here: Day 2. For those of you on Twitter, you can search for attendees’ opinions on the conference using #T32017. On a humorous note, a religious conference started using the same hashtag at the end of our conference. Because there were many T3 presenters who preached to their respective flocks at both conferences, see if you can differentiate between them!
The more, the merrier
I attend this conference every year; this year, there were more advisors than previously. This is a clear indication of advisors’ desire to understand the fast-moving technology of our industry. I will definitely be there again next year, if anyone wants to set up time to meet me there.