2011's Best Tech for Advisors

This is my second update to an annual tradition here at MorningstarAdvisor.com, where December's column recognizes three exceptional technology products or services used in the financial advisor industry. Last year, I updated the format of the awards to select one winner in each of the following three categories:

• Best Back-Office Technology
• Best Client-Facing Technology
• Innovation of the Year

I copied the objective of each award category from last year's column for your reference. And before I announce this year's winners, please take a moment to review the disclaimer: Morningstar has no involvement in the selection process, so please direct all comments and suggestions directly to me. No endorsement of any third-party products or services is expressed or implied by any information, material, or content referred to in this article. Winners do not receive actual awards other than the right to declare their product or service as an award winner until next year's list is announced.

Best Back-Office Technology
The Best Back-Office Technology Award winner must be a product or service that boosts the overall efficiency and productivity of a firm's back office and makes a direct impact to the bottom line. It must either improve existing processes and workflow procedures or allow the firm to pursue new business activity without adding significant overhead costs.

The one word that best describes technology developments for advisors in 2011 is integration. Time after time, advisors cite the lack of integration between their current technology systems as one of their biggest sources of frustration. Custodians and technology vendors alike are seeking to fill the gap in communication between applications used by advisors. I believe one solution has risen above the rest, and my winner of Best Back-Office Technology is the TD Ameritrade Institutional Veo® Open Access architecture.

Never before have there been so many choices in software platforms with varying levels of integration. But for me, what differentiates Veo Open Access from the competition is the speed and quantity with which third-party vendors have been attracted to the platform. According to Jon Patullo, managing director of technology product management for TD Ameritrade Institutional, eight third-party integrations are currently in production and available to advisors today, including Salesforce, Ebix CRM, Redtail, Orion Advisor Services, Morningstar Office, eMoney, NaviPlan, and MoneyGuidePro. Additional integrations expected by year-end include Junxure, Advisor Products, and thinkpipes, the trading interface for advisors using the custodian's thinkorswim platform.

Overall, more than 50 vendors have contacted TD Ameritrade Institutional regarding integration with Veo Open Access in one form or another, said Patullo, and roughly 20 are expected to be in production by the custodian's national conference in February. With so many vendors seeking to connect with Veo Open Access, I feel it says a lot about the current functionality and future potential of the architecture's capabilities.

The breadth of support and connectivity with third-party vendors lets advisors select the tools and programs best suited to the way they run their practice, yet integrate them effectively to reduce redundant procedures. Routine activities such as new account processing, cash management, and fee billing stand to benefit from the streamlining made possible by Veo Open Access.

TD Ameritrade Institutional is not the only custodian or technology provider attempting to solve the integration challenge for advisors, a fact that is reflected in this year's list of vendors deserving honorable mention. Included are Schwab OpenView Gateway™ from Schwab Intelligent Technologies™, Schwab OpenView Integrated Office™ from Schwab Performance Technologies, Fidelity WealthCentral®, Pershing NetX360®, and Advisor Xi from Tamarac, Inc. All of these vendors made additions and enhancements to their respective platforms in 2011, so advisors who haven't evaluated the latest options for integration will want to give each a second look.

Best Client-Facing Technology
The winner of Best Client-Facing Technology Award must be a tool that significantly enhances client deliverables or the interaction between advisors and clients. Clients clearly acknowledge the value a firm adds through such technology, either through an improved personalized service or increased level of convenience when working with the firm.

Since its debut in April 2010, the Apple iPad, winner of last year's Innovation of the Year Award, has continued to dominate the category of tablet computers. With the introduction of the iPad 2 this year, and a lack of compelling tablet alternatives, total iPad shipments are expected to easily top 50 million, a phenomenal number for any consumer product, especially for one with a price tag starting at $499. In contrast, sales of all non-Apple tablets from January to October 2011 reached just 1.2 million according to The NPD Group's November Connected Handhelds Report.

Because of the iPad's prominence, advisors are seeking ways to use it in their own firm and also allow clients to use iPads to review their own financial information and interact with one another. In support of that desire, the winner of this year's Best Client-Facing Technology is the Orion Mobile App from Orion Advisor Services, LLC of Omaha, Neb.