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

The battle between every startup and incumbent comes down to whether the startup gets distribution before the incumbent gets innovation.

I pulled this quote from one of my favorite podcasts, a16z, which is produced by VC firm Andreessen Horowitz.

I felt as though I was witnessing this ongoing struggle live last week at the In|Vest NY 2018 conference.  There were the incumbents like JP Morgan, Wells Fargo and Charles Schwab doing their best to talk up their innovation while emerging players like Acorns, SigFig and Jemstep were talking about their expanding distribution.

In the end, it all comes down to execution. Who can best deliver on their vision and provide the best customer experience?

This was another well-run event hosted by my friends at Source Media. They are building a strong brand in the conference space across a range of financial services. (See 5 Keynote Takeaways from the 2018 Digital Banking Conference)

Beyond Investing: Helping Customers More Holistically

While I feel that “holistic” is an over-used buzz word in our industry, JP Morgan’s Kelli Keough managed to keep me engaged as she explained how a bank with a $2 trillion balance sheet was managing to insert innovations into their client-facing activities.

American Banker on Twitter

@JPMorgan’s Kelli Keough, in a keynote today at #InVest2018, spoke of the serious consequences for firms that fail to embrace the latest tech tools. https://t.co/9s3odJz0GR https://t.co/e9yJ3NPwvi

As the Global Head of Digital Wealth for one of the world’s largest financial institutions, Keough is able to see the impact of deploying digital tools at scale.  She shared some advice for firms that might be delaying their decision on deploying digital technology: “choose, use or lose”.

Gavin Spitzner on Twitter

@jpmorgan Digital Head Kelli Keough shares tangible examples of how the bank is leveraging digital to deliver personalized advice…trade idea matching engine, personalized insights engine to send relevant content, and portfolio risk analytics #InVest2018 #DigitalBanking

Keough explained that the bank’s digital wealth management strategy was divided into four components: 1) Customer-centric design, 2) Customer-obsessed Solutions, 3) Powerful data and analytics, and 4) Leading with guidance.

Craig Iskowitz on Twitter

New digital strategy from @JPMorgan sounds like they’re taking a cue from @Acorns by redesigning their onboarding to take just 5 minutes & supporting smaller wealth clients –Kelli Keough #Invest2018

In the classic version of, “we’re the 800 lb gorilla of financial services, but still can innovate,” JP Morgan takes a page from the playbook of one of the most innovative firms in the space.  One of the primary drivers of Acorns’ success is their smooth and quick onboarding process.

Kendra Thompson on Twitter

We have made the mistake as an industry of giving better digital tools for those worth $100k than those with $100m. All investors expect great digital guidance. Kelli Keough, I couldn’t agree more! @jpmorgan #InVest2018

True, but there’s a lot more investors in the under $100K segment and they lack the resources of the >$100mm segment to hire the very best advisors and setup their own family office. The less affluent investors rely on digital tools to try and level the playing field a bit and gain access to higher quality advice than they could have afforded previously.  >$100mm investors have always received great (or at least expensive) guidance.

AI: Adding Value to the Wealth Management Industry

Catherine Flax, CEO of Pefin, which claims to be the world’s first AI financial advisor.

Craig Iskowitz on Twitter

AI can help advisors deliver a holistic solution to clients versus “lower quality” #roboadvisors ⁦@CatherineFlax⁩ ⁦@pefininc⁩ #invest2018

A not very subtle swipe at the established robo-advisors. Wealthfront announced that they were working on AI-powered features back in 2016 under former CEO Adam Nash. This included an algorithm would let users know if they have enough cash in their emergency fund by analyzing all of their transactions.  (See Wealthfront Revs Up With AI, But Is Still Running on Fumes)

Craig Iskowitz on Twitter

A feed forward neural network yours to simulate how the brain works, the @pefininc solution takes a snapshot of an Investor’s financial life and projects it into the future ⁦@CatherineFlax⁩ #invest2018

An artificial neural network can be described as a computer system that “learns” to perform tasks by considering examples, generally without being programmed with any task-specific rules.  According to their website, Pefin’s neural networks analyze a complex web of financial relationships for each investor, including:

They believe this allows them to provide more holistic financial advice which includes recommendations on how to handle both an investor’s assets and liabilities. (See 6 Ways AI is Helping Build Consumers’ Confidence in Banking)

Craig Iskowitz on Twitter

One #bank executive’s #cybersecurity plan: We’re safe from hackers because our systems are so old, there’s no one left who can code in those languages. @CatherineFlax @pefininc #Invest2018

I’m hoping that this anecdote was apocryphal because it’s too scary to be true. By the way, I have no idea what kind of computer is in this photo, I just picked something that looked really old. (See 6 Ways AI is Helping Build Consumers’ Confidence in Banking)

Will Hybrid Advice Make You Happy?

Josh Book on Twitter

Hybrid” is another bit of #confusing jargon used in the wealth category – wealth management can always be delivered by some combo of people and tech. #InVest2018

This is an excellent point that I have been making ever since the first robo-advisor opened their doors. Advisors have been relying more and more on automated software for decades.  Any bank, broker-dealer or RIA that uses portfolio analytics software or portfolio management software or other tools is in effect, a hybrid advisor of sorts. They are using a combination of human and technology to deliver financial advice.

Ron Carson, CEO of Carson Wealth Management, responded that the hybrid advisor model will not commoditize advice, instead it will make the client experience cooler and richer.  The hybrid model also improves scale, noted Marthin De Beer from MyBrightPlan. A human service model cannot scale advice to the majority of Americans, let alone the rest of the world, he pointed out.

NINA O’NEAL on Twitter

It’s true. I recently demoed some in San Fran and was shocked. Advisors not implementing or being aware of new technology from fear should be much more afraid to NOT. #dontbeadinosaur #fintech #InVest2018 #AI #innovate https://t.co/jizLQqK6ce

A large part of this prediction is predicated on exactly what is meant by “advice”. As I stated above, most advisors rely on software to make decisions about portfolio constructions, asset allocation, rebalancing, etc. And they do it much faster and efficiently than any human could, especially at scale.

This was an overly provocative statement by Carson and he got the expected feedback from the audience. And it’s probably true in some respects because some systems can already provide a better client experience than human advisors can for specific subsets of clients. But not for every client.

And that’s the important bit. There will always be clients who want some human interaction, no matter how good the software is. And some clients who always want to interact with software no matter how good the humans are.

Carson dropped a bunch of truth bombs on this panel including the well-known problem of vendors making “powerpoint promises” but not being able to deliver.  This leaves a lot of advisors stuck with bad technology. (See Comparing The Best Digital Advice “Robo-Advisor” Platforms For RIAs)

Kendra Thompson on Twitter

I agree with Eduardo Queen from @WellsFargo it is all about modernizing and using technology to serve the under served. We are not the first industry to be disrupted. #InVest2018

There are around 1.7 billion people in the world who do not have access to formal financial services, as reported by the World Bank. Although, things are improving.  Almost 500 million previously “unbanked” people gained access to a bank account in the past three years.

The country with the most unbanked is China with 224 million followed by India with 191 million, Pakistan with 99 million and Indonesia 97 million.  That adds up to around 500 million or 30% in just those four countries.

Kelly Forst on Twitter

Client Angela Pecoraro of @AdvicentFP shares with @sulemandn what a digitally enabled advisor really is #InVest2018: “it’s less about one on one interaction and more about the problem businesses are trying to solve.

Digital tools will allow advisors to increase their scale and support more clients, yet maintain the same level of service and customization. This means a reduction in the amount of time the advisor spends face to face with clients but increases their ability to help them solve their financial issues and reach their life goals.

Pecoraro also recommended that advisors “peel back the onion” ion order to discover what their clients are trying to improve.  (See Winners of Wealthtech: Angela Pecoraro)

Acorns Grows Up

An interview with Noah Kerner, CEO of micro-investing robo-advisor and now online bank, Acorns. Kerner is also the author of Chasing Cool: Standing out in today’s marketplace. Their cash back program

Right off the bat, when breaking down the firm’s incredible success, Kerner explained that it’s critical to address all the other aspects of a consumer’s financial life before trying to help them to save and invest.

It’s hard for consumers to remember what other financial services companies even stand for, Kerner noted.  That’s why everything at Acorns starts with mission and brand. (See Acorns: We’re Not Just Gathering Assets, We’re Building a Brand)

Their cash back program that partners with some of the largest retailers in the country, Found Money, now has 250 brand partner, Kerner reported.  It’s the best form of advertising, since the partners actually pay to promote their brand. Brilliant.

When asked about their focus on investors with less than $100,000 in investible assets, Kerner replied, “We’re not interested in serving millionaires, we want to grow millionaires.”

SourceMedia on Twitter

This year, @InVest_2018 welcomed entrepreneurs to discuss growing change in #technology. Click below see what the CEO of @acorns had to say on the reality of market execution with the use of #AI. #InVest2018 https://t.co/BZ4pJ0uOyX

I can understand why he feels this way after launching both debit card and retirement account products in just the first few months of this year.  Clients do not seem to be overwhelmed yet as they are still opening 150,000-200,000 new accounts every month.  To put this perspective, Betterment has a total of 400,000 accounts. (See Why Acorns is the Only Roboadvisor That Could Be Worth $1 Billion)

Sam Steinberger on Twitter

@acorns CEO calls Venmo a “really interesting space.” “You have a balance in Venmo or PayPal, why not put that to work?” Kerner asks. Via @wealth_mgmt #InVest2018

I think Kerner just illustrated a great reason for Paypal not to partner with his firm.  While it’s not possible to determine how much interest income Paypal generates from customers’ unused cash deposits.  The number is most likely significant, considering that parent company eBay had $15 billion in cash on their balance sheet.

If more customers were encouraged to transfer their balances from Paypal to Acorns, Paypal would lose that income. Unless Acorns is kicking some small percentage of that transfer back to Paypal, there is no benefit to them except burnishing their reputation by being connected to an up and coming financial player with a motivated user base.

Bradley Leimer on Twitter

What a lot of people in the industry don’t quite get is that companies like @acorns @RobinhoodApp and other fintechs *are* the model of mass market savings, investing, and wealth creation of the future. Transparency and inclusion. Enterprise wide fiduciary. #InVest2018

I couldn’t agree more. Acorns has quickly morphed from a standalone robo player into an online bank.

The conference organizers asked me to submit some questions that I would like to ask Kerner. While their interviewer didn’t use any, here are a few that I think would have been interesting:

Acorns is already a force to be reckoned with in wealth management not only because of their incredible growth (4 million accounts) but also because they have a client base with an average age of just 32.

Another of my questions for Kerner:

This is a real concern and more traditional firms should be worried about this, in my opinion. The subscription model works for Acorns due to their ridiculously low average account balance (<$400). But it will absolutely kill any other firm, like a typically mid-tier broker-dealer where the average account size is $150,000.

I just wanted to see if I could get a reaction out of him with this one.

I’m thinking of Vanguard Personal Advisor Services here.  Betterment and Wealthfront create a new category and Vanguard just copies them and steals all the assets for themselves. Why isn’t JP Morgan or Wells Fargo adding this to their app?

Bradley Leimer on Twitter

Noah said @acorns has 175K pre-orders for their new tungsten card. 3.7M cust and 100-150K new mo and 1.8M active. Avg contribute $50-60mo. Targeting HH < $100K. Noah says they are trying to build more millionaires not serve them. Speaking my language. #InVest2018 #inclusion

Not only are they charging $12 a year for the debit card, they also are able to generate revenue from the debit card interchange, Kerner stated.

Using Artificial Intelligence to Grow Client Relationships

Ian McKenna on Twitter

Timely reminder from @salesforce that 82% of children inheriting wealth move the money from their parents #FinancialAdviser #FinancialServicesCloud #invest2018

Good reminder from a CRM vendor about why advisors should build relationships with their clients’ children.  (See Will AI be an Advisor’s Best Friend or Worst Nightmare?)

The Business Case for Going Digital: Charles Schwab

jie wu on Twitter

Digital transformation is about the people” @neeshahathi – we couldn’t agree more! #DigitalTransformation #culturechange #people #WealthManagement #InVest2018 #FinancialServices #datadriven

Yes, this is true. Many of the consulting projects that my company, Ezra Group, delivers wind up being more about the people involved and less about the specific technology.  Prospective clients will reach out to us asking for our help selecting a new digital platform vendor, but when in our first call, we find out that they haven’t  done any thinking about why they need a digital platform, how they plan to use it, what is the business model, who are the stakeholders, etc.

One of the first steps in any of our digital strategy projects is a workshop to do some brainstorming about what the business is trying to achieve. It’s a future thinking exercise that helps move the internal team down the digital strategy path. Everyone involved in the project brings their own lens that they see the project through based on their background and experience. Getting everyone onto the same page and a shared understanding of what the business will look like in the future is a key first step in a success digital transformation. (See 3 Reasons High Net Worth Clients Are Driving Banks to Expand Digital Advice)

Tobias Salinger on Twitter

Schwab digital advisory solutions growth since launching Intelligent Portfolios in 2015, according to Chief Digital Officer Neesha Hathi: Q1 2016: $7B in AUM, 75K accounts Q1 2017: $16B in AUM, 149k accts Q1 2018: $31B in AUM, 252k accts #inVest2018 @InVest_2018 @CharlesSchwab

They’re not growing anywhere near as fast as Acorns. But still impressive. 3X Wealthfront and 2.5X Betterment with a higher average account size.

Charles Schwab is now the 14th largest US bank, Hathi reported. (See 4 Mistakes Banks Should Avoid When Launching Digital Advice Platforms)

Jessica Liberi on Twitter

There is still a huge opportunity to help the underserved in our industry. There is lots of wonderful innovation, but it not always focused on meeting these needs.” @neeshahathi #inVest2018 Lots of room to improve the experiences and education here.

It could also be because very few people trust the financial services industry. In the Edelman trust index, banks rank the lowest out of any industry.

Ian McKenna on Twitter

Majority of new @CharlesSchwab customers previously self directed @neeshahathi #GrowingtheAdviceMarket #InVest2018

60% of asset flows into ⁦Schwab⁩’s Intelligent Portfolios are from clients who are new to advice, Hathi noted.  Also, surprisingly, in 2017, 54% of their new clients were 40 or younger.

Boomers are the New Millennials

In|Vest 2020 on Twitter

Did you know that 40% of baby boomers are not ready for #retirement? In case you missed our session “Boomers are the New Millenials” at #InVest2018, check out this awesome graphic recording by @ImageThink. #WealthManagement @TIAA @humaninteresthq @johnhancockusa @unitedincome

There are 75 million Baby Boomers and they’re underserved by the industry, according to Steven Dorval who is president of John Hancock Personal Financial Services and Head Of Innovation And Advice.

I loved the real-time graphics drawn by the ImageThink team.

Craig Iskowitz on Twitter

Most marketing has shifted to #Millennials, only 5-10% of marketing dollars focus on #BabyBoomers –Renee Brown @TIAA #Invest2018

I’d suggest that we have been concentrating too much on Boomers and Millennials and should be turning attention towards the next younger generation, whatever you want to call them.

Regardless of their generation, spouses should be treated like separate clients with a discrete advisor relationship in order to stay connected after one passes away, advised Renee Brown, Chief Marketing Officer, Retail Financial Services, TIAA.

Ian McKenna on Twitter

Did I just hear that right @roger_lee @humaninteresthq ? only 14% of employers offer #401k wow #USA needs #AutoEnrolment has really worked in #UK mandatory employer contributions and under 10% members opt outs #InVest2018

Maybe the Retirement Enhancement and Savings Act (RESA) that is currently being debated in Congress could help increase these numbers?

Craig Iskowitz on Twitter

Most #financialplanning apps consider retirement spending to be static, but spending actually becomes more volatile in #retirement –Matt Fellows @unitedincome #Invest2018

This data should be shared far and wide since I believe most financial planning and other vendors use static expense estimates are maybe increasing slowly due to inflation.  But they certainly are not projecting this kind of volatility. How would that impact retirement planning if it could be properly estimated and built into the plan?  (See Rogue 4-0 One: Can Robo-Platform Vestwell Help Advisors Defeat The Retirement Deathstar?)

The New Robos for Retirement

Craig Iskowitz on Twitter

Even if @WFAdvisors took our source code & launched a competing product, we would still crush them in operations, support and execution –Kai Stinchcombe @TrueLinkFin #Invest2018

This was a ballsy boast by the young Mr. Stinchcombe.  But probably true, given the nature of any company the size of Wells, whether bank or not.

Craig Iskowitz on Twitter

Many customers that are on Medicare, actually have negative inflation, since many of their expenses are going down relative to health care costs –Kai Stinchcombe @TrueLinkFin #Invest2018

I’d like to see the data to back up this claim.  My parents are on Medicare but need to pay for supplemental gap insurance as well as a lot of out of pocket costs for prescription drugs that Medicare doesn’t cover. Their inflation is definitely not negative!

Craig Iskowitz on Twitter

@TrueLinkFin wants to be financial provider for seniors like USAA for military, Amex for business travelers, TIAA for teachers –Kai Stinchcombe #Invest2018

Lofty goals indeed!  With so much competition in the digital advice space, targeting a niche is critical to gain any traction. I’m not sure that seniors are the best target for a digital solution, but they certainly need a lot of advice.

Craig Iskowitz on Twitter

At #retirement, 2/3 of risk is based on longevity and only 1/3 market risk, yet all #roboadvisors focus on market risk only –Kai Stinchcombe @TrueLinkFin #Invest2018

Stinchcombe ran the table in this session with everyone quote I pulled belonging to him. That’s what I call being well-prepared for a panel discussion!

Combining the volatility of retirement expenses along with longevity risk should throw quite a monkey wrench in most planning software’s Monte Carlo simulations.

Digital Transformation Leveraging Client Data

MyVest on Twitter

Anton Honikman: The client data layer is the central life blood of organizational transformation #INVEST2018

One of MyVest’s key marketing pitches is their single database that supports their entire wealth management platform. This can be a huge advantage over a best of breed approach that requires extensive integration work between disparate components and data sharing in order to present a unified experience to advisors and clients. (See The Game of Thrones Struggle Between Banks & Wealth Managers)

Ian McKenna on Twitter

Making the argument for @AiteGroup & @MyVestCo #OpenPersonalFinance to build on #OpenBanking as lifeblood of client digital transformation makes sense but firms must change their preoccupation with medium & long term investment and engage on client day to day life #inVest2018

I think this is a great slide, but I don’t understand the comment.  Combining non-financial and financial detain order to generate relevant advice makes sense, but I wouldn’t refer to long-term planning as a “preoccupation”.

Ian McKenna on Twitter

Aggregation data should be used far more widely across enterprises rather that islands of use argue @AiteGroup & @MyVestCo I see the point by could present #DataConsent challenges #GDPR need to clearly articulate benefits to client #InVest2018

Data aggregation should be table stakes for any wealth management program and technology platform.  Since many HNW client spread their assets across multiple institutions, aggregation is a key part of a holistic solution. It also provides opportunities to poach assets from competitors or provide advice on retirement accounts.

Client Onboarding Solutions

Craig Iskowitz on Twitter

52% of #wealth customers said they would provide their personal data to brands that they don’t have a direct relationship with, this could be due to the reduced risk of loss in case of identity theft –Greg King @factset #Invest2018

Or perhaps it’s because vendors are configuring the default settings to Public and most consumers don’t bother to check.  The popular peer-to-peer money transfer app Venmo does this. A researcher in Germany spent a year analyzing users public Venmo transactions and discovered a lot of private information that the users probably didn’t realize they were sharing.

The Death of Robos: SigFig

Ian McKenna on Twitter

Give benefits to advisors too @SigFigInsider on why old #RoboAdvice is dead, but long live the new #Robo servicing a far wider range of channels #WealthTech #inVest2018

SigFig CEO Mike Shia described four delivery channels going from pure digital to all human with hybrid in between.  He also broke out different client segments that would be targeted by each channel:

I disagree with these segments being solely based on assets and age. An attitudinal perspective should be evaluated first and demographics second.  Different components of a client’s attitude are broken out into cognitive, affective and behavioral. These all impact how a client will interact with wealth than age or assets.

Ian McKenna on Twitter

More great insight from #MikeSha @SigFigInsider if you want to build a digital advice solution to work through channels e.g. bank branches understand how that channel works and adapt for that channel #inVest2018

I remember laughing the first time I heard the term “advisor-led” digital advice, as though it’s a revolutionary implementation. Isn’t this the way non-digital wealth management technology has always worked?  Advisors run the process, assisted by a software program that handles the risk assessment, outcome modeling, portfolio construction and onboarding. This is not a new concept!

As I wrote in my most recent digital advice products shootout (Comparing The Best Digital Advice “Robo-Advisor” Platforms For RIAs) there isn’t any such thing as kobo-platforms or digital advice any more. All of the vendors have morphed into full wealth management platforms. They all now offer “advisor-led” solutions, which are the way advisors have always worked with the technology.

Vendor Field Strategy Report

Hey! We’re finally up to my panel! I moderated this session with a group of distinguished industry veterans:

Gavin Spitzner on Twitter

Had a blast this morning speaking on Fintech landscape panel session with @craigiskowitz @dougofritz @williamtrout at @InVest_2018 covering AI, Digital Advice and Onboarding…thanks to everyone who got up early and joined us. #InVest2018 #Fintech #AI #digitaladvice

There were a lot more people than I expected when we kicked off at 8:20am. Thanks to Seb Dovey for the beautiful introduction and personalized anagram of my name, “Czarist Go Kiwi”. Which is probably why he asked me backstage whether I preferred Australia or New Zealand. Fortunately, I picked New Zealand, the eternal land of Kiwis.

Appway on Twitter

Proud to be mentioned as a leader in client #onboarding by @williamtrout (Head of Wealth Management at @Celent_Research) here at #InVest2018 – if you haven’t done so yet, stop by our Kiosk to talk best-in-class customer experience

According to a report from Aite Group, “In an increasingly competitive environment, wealth management firms realize they do not have a second chance to make a first impression.” This is what makes onboarding  such an important part of any wealth management solution.

In a recent survey, 85% of wealth technology executives placed high importance on improving their firm’s client onboarding experience.

MyVest on Twitter

@williamtrout: Just because you’re a legacy provider doesn’t mean you can’t get into this digital lane #INVEST2018

Actually, this was Doug’s slide, so he’s the one who said that legacy providers can’t get into the digital lane. I believe his comments were that while Scivantage launched one of the earliest digital offerings, their platform has not stayed up to date.

There was only so much room on the slide and only so much time in the panel, but a few other current leaders include:

And a few other market challengers would include:

Ian McKenna on Twitter

Interesting to hear @dougofritz call out @InvescoUS acquisition of @Jemstep as bringing major stability benefits bodes well for @IntellifloLtd users both in UK & internationally #InVest2018

It absolutely increases Jemstep’s financial stability to have Invesco backing them.  Beyond that the number of doors that are open for them based on their new owners is night and day from when they were a startup.  Invesco has relationships with almost every bank, broker-dealer and advisory firm in the known universe. I imagine that Jemstep’s sales pipeline has been overflowing every since before the link was even dry on the deal.

Blockchain, Quantum Computing and AI

This session was a sort of hodgepodge of emerging technologies that impact wealth management. I think they could have broken each one out into its own session since I don’t think that 12-13 minutes per topic was enough to do it justice.

Craig Iskowitz on Twitter

Blockchain is a list of things that happened, not a list of the truth via @AmberBaldet of @GrowClovyr #InVest2018

Just because a database is immutable (cannot be changed) doesn’t mean that’s inside is right. It takes the same amount of energy to write incorrect data as it does correct data.

Haley Rosa on Twitter

Before #GDPR people talked about data as gold, now its more like oil & you don’t want a spill – @AmberBaldet of @GrowClovyr #InVest2018

Good analogy. Many companies, especially social media, rely on selling their users’ data to generate revenue. The problem is that people are just coming to the realization that regular invasions of their privacy are required in order for these companies to stay profitable.

Craig Iskowitz on Twitter

Clients don’t think that it’s “creepy” for banks to leverage their data using analytics to improve their user experience –Kelli Keough @JPMorgan #Invest2018

I wanted to juxtapose this comment from Kelli Keough about data privacy with the previous one from Amber Baldet. I believe most clients would be concerned about banks using their data if they were aware of all the “spills”.

Andrew Welsch on Twitter

Why would your least wealthy client get your best digital experience?” –> One of the most interesting comments I’ve heard so far at #invest2018

We have asked our own clients this question a number of times. The answer always involves a lot of shrugging and puzzled looks.

Tell Me Something I Don’t Already Know

This panel won the prize for most interesting title.

Accenture Capital Markets on Twitter

Did you know 62% of Millennial advisors charge for planning, compared with 38% of Baby Boomers? Interesting fact from @KennyT5 at #InVest2018 @SourceMediaCo

Obviously, generational differences are at work here. But it could also be that goals-based financial planning has only recently moved into the mainstream and it is more difficult for older advisors to adjust to the changes.

Or it could be that upper management is not encouraging advisors that own the relationships to create their own value added, as Kendra Thompson from Accenture pointed out. She doesn’t see the pivot happening fast enough. There is resistance from the workforce to the kind of thinking that experiences have value.

Matt Middleton on Twitter

PREDICTION: “More people will receive financial advice digitally than traditionally by 2022.” – Randy Bullard of @SigFigInsider & Jon Stevenson of @MoneyLion Bold prediction, but possible! Though I think full adoption will occur a few years later than suggested here. #InVest2018

I think it will be much later. Not because digital advice isn’t  growing fast enough, but because the current installed base of human advice is so large. It will take more time to overcome the head start.

Craig Iskowitz on Twitter

Advisors tend to de-risk clients when left to their own devices, digital advice platforms place clients in a better position on the efficient frontier, they deliver a more efficient analysis of risk -Randy Bullard @SigFigInsider #Invest2018

Software can do a better job of risk analysis than a human, but it can only work with the inputs it is given. Some platforms allow the advisor to adjust the risk score based on their knowledge of the client, because there can be factors that the software does not capture.

Craig Iskowitz on Twitter

Children between the ages of 2-8 spend an average of 34 days a year online (in aggregate). This amount triples when they become teenagers. –Hannah Grove @icapitalnetwork #Invest2018

Can we just take the electronics away from the children for a few minutes a day?

The Rise of the Model Marketplace

Tobias Salinger on Twitter

All-star panel at #inVest2018 with @MichaelKitces @ENVJimerson Kunal Kapoor of @MorningstarInc and Natalie Wolfson of @AssetMark

There was a lot of useful comments provided by this panel.  Kunal Kapoor, CEO of Morningstar, said that a model marketplace allows an advisor to demonstrate their value to the end investor and show how they are helping clients reach better outcomes. (See 7 Model Hubs Battle for SMA Managers & Sponsors)

Andrew Welsch on Twitter

The lines between asset manager and advisor will continue to blur as they both compete for the part of the fee they don’t own today,” says Kunal Kapoor @MorningstarInc #invest2018

Fee compression has been an issue that has impacted every participant in the wealth value chain, except the advisor.  They have been pushing back on technology providers, custodians and asset managers to avoid taking a hit on their fees.

Now with model marketplaces providing low cost distribution for advisor-created models, it has allowed them to compete directly with the largest asset manager firms.  (See How Advisors Can Use Technology and Service to Fight Fee Compression)

Ian McKenna on Twitter

Fascinating listening to hear how #ModelMarketplace is evolving US asset management. @TheFCA regulations has brought huge consumer benefits & raised standards but I increasingly think existing advised/discretionary regulation is now driving poor consumer outcomes #invest2018

I’m sure many US asset managers all exploring international distribution channels, but have to be wary of regulatory hurdles.  The UK is ahead of the US in some ways, but we are the innovators when it comes to investment model distribution.  (See Can Retail Model Marketplaces Challenge TAMPs for Assets?)

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This study by TD Ameritrade is reporting that client acquisition, asset growth and revenue growth for the RIA segment dropped dramatically from 2014 to 2016.  These findings have been confirmed by other studies including a 2015 InvestmentNewsAdviser Compensation and Staffing Study.

However, I believe there is a stratification between the lower and higher performing RIA in terms of growth. The biggest firms can afford to invest in business development and are reaping the benefits while smaller firms suffer slowdowns:

The top-performing advisory firm giants — those that have more than $10 million in revenue and are the most profitable — generate more than 71% of new assets from firm business development, the study found. The rest of the $10 million-plus firms garner 44% of new assets from business development.

Digital Advice in Banking

Gavin Spitzner on Twitter

@keybank decision on digital advice solution based on: tech/configurability, Pershing integration, business fit/partnership alignment, ability to insert own investment mgmt and cost #InVest2018

This was a big win for Jemstep last August since KeyBank is in the top 20 in the US with $136 billion in total assets and $45 billion in AUM. of course, just a fraction of that is discretionary fee-based, which is where every other digital advice platform is constrained.

But Jemstep is unique in that their platform can also open commissions-based brokerage accounts. This provides more flexibility to a client like KeyBank that operates on both sides.  They are also a partner with Pershing and their integration has been up and running for almost four years, which gives them an advantage over other players in the space who haven’t had the same amount of time to work out the bugs in their account opening process.

Jeff Marsden on Twitter

Advisory firms need to recognize that there is an Advisor journey and a Customer journey. They are completely intertwined. Optimizing either in isolation is challenging at best. #spm #WealthManagement #wealthtech

We have been engaged by more than a few wealth management firms where the advisor and client experiences are managed by completely separate parts of the organization that rarely, if ever, communicate.  While they believe that they are optimizing each experience, they fail to realize that they’re intertwined and must be evaluated together since they feed off of each other.

Josh Book on Twitter

Fun close out to @InVest_2018 with these beauties! #invest2018 @craigiskowitz @Jeff_Marsden @philipdarling and Randy Bullard #inspiredby @TheRudinGroup 🙂

What better way to close out this event than oysters and wine with some good friends?