The playing field of financial services is changing and technology has proven to be the Most Valuable Player. At present, technology makes up around 25% of the S&P 500 and has become essential to how information is communicated, assimilated, and applied. While most wire-house firms are busy playing in the AAA league, RIA and Hybrid firms are not just interested in succeeding but thriving, and have moved to the Major Leagues striving to remain at the forefront when it comes to integrating technological solutions into their business practices.
Just like any sports team, where the MVP can be characterized by their efficiency, performance, and – at times – dynamic personality, so too does technology bring these essential traits to an RIA or Hybrid firm’s practice. For financial services in particular, technology has the ability to maintain stable and efficient business operations, improve advisor performance and overall output, and provide a creative interface for client engagement. Technology is also a major deciding factor when it comes to which firm an advisor partners with. Technology has been the catalyst behind some of the most recent moves of many large and lucrative teams to companies such as Raymond James, Triad Advisors, Kestra, and Dynasty to name a few.
Historically, the most outsourced component of an advisor’s practice was the CRM, and the same holds true today. Modern CRMs offer feature-rich, pliable solutions which seamlessly integrate into all other technology platforms in a firm’s practice. Additionally, CRMs provide a vital operational component, housing all essential data for clients and prospects alike. A number of stellar CRM options exist for the financial services professional, with companies such as Redtail providing targeted solutions specific to the industry.
At the heart of most advisors practices are a combination of financial planning and portfolio management tools, which most advisors tend to rely on daily to manage and achieve the goals established for their clients. A proven favorite for this solution among advisors is Envestnet, which earned its reputation for its management capabilities and is gaining traction as a planning software as well. Integrations to Envestnet such as Logix, which incorporates financial planning, and Tamarac include asset aggregation, rebalancing, and third-party integration are increasing the popularity of this platform.
Another important technology solution to consider is a financial planning and portfolio management tool, which most advisors tend to rely on daily to manage and achieve the goals established for their clients. A proven favorite for this solution among advisors is Envestnet, which earned its reputation for its management capabilities and is gaining traction as a planning software as well. Another portfolio management solution offering the right mix of functionality beneficial to an advisor is Logix, which incorporates financial planning, asset aggregation,, and third-party integration. Logix also conducted a recent upgrade to Tamarac for trading, a main driver in the ever-increasing popularity of this platform.
For financial planners, the technology space has become crowded though it has traditionally been led by Emoney, a company which continues to make the biggest advances in technologies that align advisors interests. The level of detail and sophistication that can be brought out of the very simple, straight-forward Emoney software is impressive, thus endearing Emoney to the planning community due to its easy adaptability into business practices.
Portfolio managers have numerous technology choices available to them, though the most important software characteristic is the capacity to communicate well with other software or data feeds. This is vital to a portfolio manager’s efficiency in managing the abundance of investments transacted daily for their clientele. Two optimal solutions available on the market today which achieve this goal are Black Diamond and Orion. Black Diamond is prized for its rebalancing capabilities, while Orion is celebrated for reporting functionality.
Speaking of rebalancing, iRebal is renowned amongst traders and is a solution available on the TD Bank platform. TD Bank is unique in the technology space and should be applauded as the company that has taken a different approach to software and technology by opening their platform to most any Fintech out there. TD has uniquely achieved for advisors using its platform the ability to aggregate day-to-day operational tools on one screen, making the TD technology solution truly ahead of the rest in this regard.
On the other end of the spectrum, Raymond James has built a proprietary solution that is all encompassing in satisfying the technology needs for most advisors. Additionally, the Raymond James platform has proved disruptive as it has revolutionized the definition of a ground-up unified function.
Cutting-edge and forward thinking solutions are being developed at other firms as well, which make the prospects for financial services technology quite interesting. Cetera recently caused a stir by integrating facial recognition software into their unified software model. Also, keep an eye out for another emerging technology, Distributed Ledger, which, as the CEO of one of the largest firms in the world recently told me, is going to change the way the world has done banking. One of the most exciting new solutions emerging is turnkey technology, with efforts for development being spearheaded by firms such as Raymond James, Cetera with MyAdvice Architect, and Triad Advisors. Turnkey platforms are proprietary systems which allow firms to incorporate the top technology players in each of the service categories, from those for financial planners to those for portfolio managers, basically linking systems together with plug-and-play functionality that takes the guess work out of integration for the advisor.
When it comes to technology, each new day emerges with a new future solution that brings with it the prospect to revolutionize the way we play the financial services game. Understanding your technology choices, which software providers are proven, and which platforms have emerged as the most dynamic and creative prospects will be vital as you and your team work to choose the technology MVP best suited to your enterprise and its ability to achieve its goals.
