Unlock Your Access for the Data Webinar: Winning Data Teams: Getting Started and Scaling Your Team aired November 15, 2022

Industry conferences are like cramming for a test when you were in school.  You have only a few days to stuff as much information as possible into your head and hope you remember one or two key points to when you get back home.

The 2016 T3 Advisor Conference, which was held this year in sunny Ft. Lauderdale, FL, is the financial world’s equivalent of the Consumer Electronics Show, according to industry guru Bob Veres.  This event always delivers tremendous value and updates on the latest technology innovations for wealth management.

We have scoured the Twitterverse for the best ideas that came out of Day 2 and have presented them here for your reading pleasure.  Let us know which ones you liked the best in the comments section below.

1. An Open Technology Architecture Reduces Complexity

“Older systems and business models were built with fences,” stated Tricia Rothschild, Head of Global Advisor and Wealth Management Solutions, Morningstar, Inc.  She illustrated this with the not-so-elegant graphic shown below that she used to illustrate the tangled mess that passes for technology infrastructure at many firms.

Karla Paxton on Twitter

Simplicity to Complexity to Elegant Simplicity #T32016

While software vendors have made leaps and bounds in their ability to communicate with each other, we still have a long way to go before plug-and-play becomes a reality.  There are still too many companies that are still building silos and making clients jump through hoops to be able to freely move their own data around.

Tim Welsh on Twitter

7 – the number of technology apps used by the average advisor” – Trish Rothschild of @MstarAdvisor #T32016

I love when speakers bring crunchy statistics, but I need some context on this one.  Is this too few or too many?  How many apps does the average  lawyer use?  Or accountants or other service professionals?  is this only desktop apps or do mobile apps count as well?

What is considered an “app”?  If an RIA uses the Orion Advisor Services platform, is that one app or two since it is built on top of Salesforce CRM?  Or if she uses Fidelity’s WealthCentral brokerage platform and runs performance reports powered by BlackDiamond?

Capitect on Twitter

Client data belongs to the client” -Tricia Rothschild of @MstarAdvisor #T32016

It’s a sad state of affairs for the industry that this isn’t blatantly obvious. Until advisory firms stop buying products that put their client data into a silo, this will continue to be an issue.  Unfortunately, they often do not realize this has occurred until after the software has been implemented.

J.D. Bruce on Twitter

Maybe @MstarAdvisor and @orionadvisor should develop a standardized data structure to allow for easy transfers. No more conversion #T32016

A standardized data structure has been the silver bullet of industry integration for many years.  There was even an organization started that was called Your Silver Bullet, that tried to get support from the major players for standardization.  It never went anywhere.

Unfortunately, it is not in any vendor’s best interests to make it easy for clients to move their data to a competitor.  Firms are constantly adding new features and functionality to differentiate themselves.  This often requires new data fields or data structures that do not exist anywhere else.  Their data structures are part of what makes them unique.

Vendors often have trouble upgrading their own clients from one version of their product to another.  Moving to a competing system is an order of magnitude more difficult.  This is why most conversions take longer than promised and cost more than expected.

No company will spend a single development dollar on standardization unless there is a push from clients to do so.

Suleman Din on Twitter

Just curious: how many millennials are actually using any platform to determine ESG of their investments? #T32016

I would wager that most Millennials aren’t too concerned with the environmental social governance (ESG) rating of their investments.  Most likely because it’s too difficult to figure it out.

But wait until the first robo-advisor platform or other investment firm starts posting the data next to your holdings list and see how many people start asking those questions.  Robos did the same thing by publishing their fees on their website.  Someone just has to think it’s enough of a differentiator and could drive more users to their platform and bazinga! — the data will be everywhere.

2. Wealth Planning Should Go Beyond Just the Numbers

Bill Winterberg CFP® on Twitter

For the first time in 16 years, @eMoneyAdvisor will allow clients to self register for their own portal. #t32016

Welcome to 2005, eMoney!  Self-directed has been trending in every industry, not just financial services. From booking their own travel to publishing their own books to shopping for their own life insurance, consumers have cut out the middlemen across a wide swath of their lives.

eMoney Advisor on Twitter

Uber is not a transportation company. It sells back time…If you can find a way to sell back time, people will pay a premium.” #T32016

You could say this about any product or service that reduces the time people have to spend doing something or going somewhere.  Is Google not a search company because they can sell back the time it would have taken me to look up how many guys signed the Declaration of Independence?  (By the way, the answer is 56 and I only had to type ‘decl’ before the search box popped up with ‘declaration of independence signers’.  That’s a pretty efficient use of my time.  Now I can go back to watching Vines of people skateboarding off their roofs.)

I understand the concept they are trying to convey with this analogy.  But, Uber is absolutely a transportation company.  They have become so successful by making the process of transporting people so elegantly simple.

Joel Bruckenstein on Twitter

1.4 trillion flows throught the @eMoneyAdvisor system #T32016

That’s a lot of money! Too bad they can’t charge an asset-based fee. At least they have now figured out how to leverage eMoney in their new wealth management platform, WealthScape.

Joel Bruckenstein on Twitter

Clients are 250% more likely to set & hit goals if there is a picture tied to it @eMoneyAdvisor #T32016

I’m a little hesitant to believe both parts of this.  Showing a client pictures that represent different goals sounds like it could make them more likely to set one.  But I don’t see how that translates after they leave their advisor’s office (or close the Webex) into actually hitting their goals over time.

Suleman Din on Twitter

Hmm… “I don’t think @Vanguard_Group is providing quality financial planning,” says @MoneyGuidePro’s Bob Curtis about its robo #T32016

Ali Malito on Twitter

Min. reqts for fin plan: Understand your client, healthcare, social security, risk, longevity and set expectations. Add human value. #t32016

Who gets to define what goes into a quality financial plan?  Curtis’ list sounds good, but what would the average investor think?  Vanguard seems to be quite successful with the level of planning offered by their Personal Advisor Services call center advisors.

Michael Kitces thinks most financial planning software is too focused on features that promote product sales and asset gathering. These same tools ignore useful advice such as tax strategies, debt management, cash flow and budgeting since they do not directly drive sales or AUM.

Matt Ulsas on Twitter

What if amzon or facebook decided to offer planning? That would be a game changer! #T32016

I have have proposed something similar to a number of my clients, but I couched it in a term that I took from the title of one of my favorite business books. What Would Google Do?: Reverse-Engineering the Fastest Growing Company in the History of the World by Jeff Jarvis.

Amazon has already received government approval to sell mutual funds in India.  How big a share of the DIY investor market could Amazon grab if they were allowed to do the same here in the US?  Or an even better question is how many of their customers, who wouldn’t normally consider themselves DIY investors, would buy mutual funds through them?  This could expand the market in many ways.

According to Fintonic, the number one mobile banking app in Spain and Latin America, 10% of Americans ages 18 to 54 believes Google will become a bank most people use in the future. That, in itself, isn’t a huge number, but revolutions have to start somewhere.

Darren Tedesco on Twitter

Interesting question advisors need to ask @MoneyGuidePro #T32016

Financial planning is a way for advisors to differentiate themselves  “Advisors need to provide a quality plan to every client,” proposed Kevin Knull, President, PIEtech, Inc., the makers of MoneyGuide Pro.

Ali Malito on Twitter

Set expectations that show plan can withstand bad times. Events that can happen you can’t predict. @moneyguidepro #t32016

This sounds like a job for Riskalyze!  Aaron Klein, are you reading this?  What say you to this challenge?

Ali Malito on Twitter

How many people woke up thinking I need to jump on a client portal and enter all my info? Or was it, will I have enough money? #t32016

The vast majority of investors think in simple, black and white terms.  They would be enticed to enter their data into a website if they thought they would be given some useful information and not just a sales pitch.

Bill Winterberg CFP® on Twitter

BREAKING: @MoneyGuidePro now delivers financial plans via drone. #t32016 https://t.co/mvLzPoqCB1

MoneyGuide Pro’s T3 presentations have gone from live chickens on stage to Monty Python and the Holy Grail re-enactments and now to drone delivery.  Personally, I prefer King Arthur.

J.D. Bruce on Twitter

@MichaelKitces Best tweet of the day. Nobody retires anymore. They just do something else. #WorkisOptional #T32016

Well said!

3. Advisors Cannot Live By Technology Alone

Joel Bruckenstein on Twitter

Adviosors on average spend 14%of their time prospecting @runoranj #T32016

I spent some time on Google to see there were any other surveys that could validate this stat, but I couldn’t find any.  I’m not sure if this percentage is too high or too low.

Joel Bruckenstein on Twitter

Wealthfront is just E-Trade with an expensive coat of paint-Aaron Klein-#T32016

Klein took a number of shots at robo-advisors during his session.

Linda Ding on Twitter

Robo isn’t a business model. It’s a technology model.” @AaronKlein @Riskalyze #T32016

Here’s another shot from Klein.  Although, this is one I happen to agree with.  As Wealthfront and Betterment and the rest of the new wave of digital-only RIAs have discovered, you only get so far on hype.  Both firms have plateaued at around $3 billion in AUM while the established players, Vanguard and Charles Schwab, have raced past them.  (See The Changing Face of Robo-Advisors)

Todd Youngs on Twitter

In a few years, advisors without robo will be like banks without ATMs. @Riskalyze #T32016

Digital advice channels will soon be ubiquitous.  Now that all of the big four custodians are offering or planning to offer robo software and many of the biggest wealth management platform providers are as well, the percentage of advisors with an online, low-touch advice capability will skyrocket.  It will look like the proverbial hockey stick and the tipping point is right now. (See Advisor-Bots: Beware the Swarm)

4. Advisors Who Future-Proof Their Practice Will Be More Successful

Tim Welsh on Twitter

Fintech investment in 3 qtrs of 2105 = $10.5 billion 2x 2014″ – @Fidelity4RIAs Ed O’Brien – role tech will play in wealth mgmt #T32016

Expect to see more industry disruption as firms are combined and integrated with existing platforms and new  startups appear to chase their dreams of expensive exits.

Suleman Din on Twitter

Do-it-yourself: 7/10 emerging affluent and millionaire investors expect tech to be part of managing finances @Fidelity #T32016

As Michael Kitces correctly pointed out, “That’s not a DIY trend. That’s a tech-as-collaboration-tool trend. Fitbit not replacing doctors, either.”

It’s true that Fitbit isn’t replacing doctors, yet.  But as computing power increases and wearable devices gain more functionality, we will soon see software analyzing not only a person’s vital signs and how many steps they take, but also testing their blood for traces of disease and alerting them if they need to take action.

Technology is already doing the same for investing. Tools like FutureAdvisor (owned by BlackRock) can already monitor all of your accounts, no matter where they are custodied and provide customized advice.  Advisors to HNW clients already rely on sophisticated planning software like Naviplan when making recommendations for their complex financial picture.  These features will slowly migrate downstream to less expensive products and services.

It will not be an overnight change, but more and more investors will allow algorithms to manage larger and larger chunks of their financial lives.

Paul West on Twitter

Ready to share with @FinTechie today what we as advisors are thinking about technology integration. #T32016 @t3fan

If you went back in time just five years and showed this list to an RIA, they would laugh at you and say you were crazy.  Now, everything on this list has become table stakes for successful advisory firms to compete in the marketplace.

Competition is moving into the market from all angles.  Even social media firms could be preparing to showing their massive user bases with financial service offerings. (See How a Snapchat RoboAdvisor Could Rock the Industry)

Darren Tedesco on Twitter

@Fidelity took 6 million calls on 1/6/16 from clients about their 401ks #T32016

That’s what I call a scalable customer support organization!

Todd Youngs on Twitter

Be more like the Jetsons, less like the Flintstones. Embrace tech. #T32016

Fidelity has coined the term “eAdvisors” who are advisors that take advantage of key technologies that traditional advisors do not.  A recent study showed that eAdvisors:

In addition, 74% of eAdvisors believed technology has helped them grow their books of business.

Carrie Jones, CFP® on Twitter

Favorite exchange from #T32016 – Q: What if I have a life ins BD who won’t let me use this tech? A: Drop the BD and go #feeonly! @bobveres

Good advice.

5. Announcements

Paige Hill on Twitter

The wait is over. eMoney to unveil its enhanced client experience at the #T32016 #advisor conference. https://t.co/WlfJIMbHPp

They are also unbundling their client portal as a standalone product.

Riskalyze on Twitter

Riskalyze introduces the Check-in at #T32016. https://t.co/m3r2JzeAZt

This is an innovative feature that again pushes Riskalyze beyond the boundaries of the traditional risk management area and deeper into client management.  They are providing RIAs with an automated tool to survey the sentiment of their client base, which allows advisors to quickly identify clients that might need handholding or be otherwise be concerned about the markets.

If clients utilize the check-in function on a regular basis, it could help increase an RIAs scalability by allowing individual advisors to support more clients.   However, if clients feel annoyed at a constant nagging from their advisory app, they may just turn it off and avoid all contact.

Todd Youngs on Twitter

@MoneyGuidePro new G4 helps to facilitate the conversation with clients #T32016

Their G4 is scheduled to be released in April.

Darren Tedesco on Twitter

@Fidelity big reveal @ #T32016 Wealth scape is the next platform name.

Wealthscape is planned as the replacement for WealthCentral, Fidelity’s RIA platform, and StreetScape, their broker-dealer platform.  Fidelity is taking a page from Pershing, who launched their combined platform, NetX360, back in 2009.

Along with aggregating multi-custodial data, eMoney will tie in with Wealthscape, offering the end client a portal to view their portfolios and work with advisers.

2016 T3 Advisor Conference

For those of you who, like me, were unable to attend this year’s conference, I hope this brief summary helped you get a feel for some of the best ideas that were presented.