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New Trends in Tech at T3

Highlights from last month's advisor technology conference.

Bill Winterberg, 03/10/2011

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Last month I attended the Technology Tools for Today Conference, or T3, in Weston, Fla. Founded by David J. Drucker and Joel P. Bruckenstein of the namesake newsletter service, T3 first launched in 2006 and has grown steadily during the last six years.

This year's conference attracted roughly 500 attendees and over 70 exhibitors covering the spectrum from CRM, document management, and portfolio management software vendors to third-party financial-planning and back-office outsourcing providers.

Bob Veres closed T3 with a keynote in which he reflected upon the progression of the conference. He noted how the makeup of sessions has been remarkably prescient in identifying technology trends in the financial advisor industry. In 2007, the conference featured a panel discussion by advisors who were operating their businesses entirely on virtual workspaces, before the word "cloud" had become as common as it is today. In subsequent years, trending topics included the adoption of electronic document management software, the influence of mobile devices in advice delivery, and the shift away from advisor-centric planning to client-centric planning, where clients play an active role in the process of creating their own financial plan.

What follows is a summary of my key takeaways from T3 that I think play a significant role in advisor adoption of technology over the next few years.

How Technology Is Changing the Advice Landscape
Brent Burns, president and founding partner of Asset Dedication, LLC, delivered the conference's opening keynote with a simple example of how technology is changing the landscape of the service industry, in which all financial advice providers are included. Burns stepped through the process of ordering a pizza from Domino's Pizza. After placing an order through the Domino's website, customers view the progress of their order with the Domino's Tracker. The tracker shows in real-time who is making the pizza, when it gets placed in the oven, a post-bake quality check update, and who prepares the pizza for delivery. As the pizza is delivered, Domino's encourages its customers to "please reward your driver for awesomeness."

If all this happens simply for a $20 pizza order, advisors should take note that their service model deserves to be enhanced in order to deliver a similar experience for clients. When was the last time a client told you that her financial planning meeting was awesome?

Because of technology like the Domino's Tracker, client expectations for service quality and transparency are rising. It's no longer sufficient to meet annually, update a few financial projections, deliver an updated plan, and schedule next year's meeting. Today, clients are more connected than ever and are passively being influenced by companies such as Domino's to always expect an awesome experience.

One way technology vendors are responding to these new client expectations is by making advisors' portfolio management activity as accessible as possible. Clients can now log in to secure web portals offered by vendors such as Orion Advisor Services, LLC, Black Diamond Performance Reporting, LLC, and Tamarac, Inc. to view up-to-date performance and transaction data across their household accounts. Clients get to view account information that is updated daily and no longer need to wait for quarterly performance reports to be delivered by their advisor.

On the service quality front, clients want easy access to advisors without having to jump through hoops or be put on hold to reach someone. For example, in an integration panel discussion featuring advisors whose primary custodian is Fidelity Institutional Wealth Management, Thomas C. Goyne, founding principal and managing director of Shamrock Asset Management in Dallas told the audience about a new phone system his firm recently adopted. The upgraded system allows after-hours phone calls from clients to be routed directly to a mobile phone carried at all times by one of the firm's principals. This accessibility gives busy clients an easy way to contact an advisor outside of traditional business hours and demonstrates the dedication of Shamrock's principals to be available and accessible for select clients.

The Rise of Electronic Signatures
Another hot topic of T3 involved streamlined form processing through the use of electronic signatures. George Tamer, director of institutional sales for TD Ameritrade Institutional highlighted his company's recent partnership with electronic signature provider DocuSign. Advisors who custody with TD Ameritrade can now incorporate electronic signatures into the account application process and avoid printing hard copy forms to obtain wet signatures. Fidelity Investments has been supporting DocuSign for its electronic form processing since late 2008.

Providers such as DocuSign have been well received in the real estate sector, but adoption has been very slow in financial services. In her session on software integration, Neesha Hathi, vice president of advisor technology solutions for Schwab Advisor Services, responded to an audience question about electronic signatures and said that today Schwab still requires wet signatures for many of its account processing forms. With DocuSign in the real estate setting, for example, home buyers can sign closing and escrow documents while on a plane featuring a Wi-Fi Internet connection. The provider even supports electronic signatures made on iPhones and iPads.

However, many in the audience expressed concern about the process a client must go through to electronically sign a form. To sign a form, clients click on a link they receive by e-mail to the document hosted on the DocuSign website. Once on the website, clients need to authenticate their identity by answering approximately six challenge questions. Users of online credit report services will recognize the format of the challenge questions, such as the street address of a former residence or the make and model of a vehicle previously financed. Clients are given three chances to correctly answer the challenge questions before they are locked out and must receive a new authentication link by e-mail.

Most Impressive Technology
For me, the most impressive technology showing of T3 was delivered by Figlo, a financial software provider based in the Netherlands. The Figlo Platform combines personal financial management (think Mint.com) with traditional goal-based financial planning tools popular with advisors today.

Figlo is new to the United States financial services market but has decent representation in Europe. In his pre-conference presentation, Sam Vassa, CEO of Figlo North America, said that about 15,000 advisors were using the Figlo Platform overseas representing more than 2.5 million client relationships across 14 countries.

The Figlo Platform is the first I've seen that fully embraces interactivity via smart phones, tablet computers, and touch-screen devices. Much of the user interface software is designed around new web programming standards including HTML5, CSS3, and JavaScript which allows the Figlo Platform to run on a variety of new devices including the Apple iPad, Android-based tablets, RIM's Playbook, and Microsoft Surface. Using a device's touch-screen interface, clients and advisors can drag and drop virtual financial-planning goal cards onto an interactive timeline to update the plan in real time. To get a better sense of what this experience resembles, Figlo has several videos available for viewing on its website http://www.figlo.com/en/solutions/personal_finance.

The Figlo Platform is offered at a compelling price, too, starting at $1,500 per advisor per year with client access available for about $10 per year per client. The price is low enough that I think advisors can experiment with the platform with little risk and see how well it is received by clients, particularly those who are in the Generation X and Y demographic.

Disruptive Technology
Are financial advisors ready for the disruptions in traditional service models brought about by technology?  More and more clients expect real-time access to their advisors and financial planning information, and innovations like the ones from Figlo are dramatically changing the individual planning experience.

I believe the service model of one-way delivery of financial plans and recommendations is no longer sustainable. Advisors need to embrace dynamic, interactive services that are client-centric and that quickly adapt to changes in client's personal situation. To stay abreast of these changes, I highly recommend advisors attend next year's T3 Conference tentatively scheduled for mid-February in north Texas. Details can be viewed at the T3 Conference website.

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Bill Winterberg, CFP, is a technology and operations consultant to independent financial advisors. His comments on technology have been featured in a variety of financial industry publications. You can view more information about Bill and see his schedule of upcoming speaking engagements at his Web site, FPPad.com.

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