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2013's Best Tech for Advisors

Advisor technology columnist Bill Winterberg's Best Tech for Advisors award winners simplify client deposits, streamline client risk assessment, and push the envelope on custody technology.

Bill Winterberg, 12/12/2013

Regular readers of MorningstarAdvisor.com eagerly await the arrival of this column's December update, as I survey the past 12 months of technology developments and make my selections for the year's Best Tech for Advisors.

This is my fourth year positioned in the hot seat of a high-stakes evaluation process that can literally make or break the future of an advisor technology provider!

Or so I would like to believe.

My choices for the 2013 Best Tech for Advisors winners are separated into the following categories:

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

Each category objective is identified along with highlights of how each award winner enhances a financial-services firm through the use of innovative technology.

As is customary with my award column, please take a moment to review the disclaimer: These are my awards. 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.

What Happened in 2013?
Before I begin, allow me a moment to reflect on the developments over the last year. Truthfully, 2013 has been a rather tepid year in technology advancement for financial advisors. A significant portion of the news and announcements this year represented incremental updates or a "point release" (as in v1.1) to existing technology.

Although the lack of legitimate trailblazing products kept the best tech candidate list unusually short this year, I feel it is a sign of the potential for very impressive technology to arrive throughout 2014. I am already looking forward to forthcoming products such as Redtail Data Cloud, Genesis Smartware from the Fox Financial Planning Network, Project PM2 and OpenView Mobile from Schwab Advisor Services, Junxure Cloud from CRM Software, Hub from Baer Software, WealthBox CRM and Wealthbase from Gotham Tech Labs, and several more yet to be publically announced.

See what I mean about the prospects for advisor technology in 2014?

In the meantime, let's continue with the award winners in 2013, a "bridge year" in technology development for financial advisors.

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.

This year's best back-office technology might not seem all that innovative relative to features available on the retail side of the financial-services industry for several years. Nevertheless, two institutions, LPL Financial LLC and Fidelity Investments®, share this year's best back-office award for their introduction of mobile check deposit solutions for their affiliated advisors.

At first glance, mobile check deposit support doesn't seem all that flashy or sexy, but the feature does solve a number of frustrating issues for financial advisors.

Processing client deposits by check traditionally required staff to complete an overnight envelope form, photocopy checks, and potentially make a mad dash to a shipping company's drop-off location if the afternoon in-office pickup deadline had passed. Not only that, weather delays or the occasional inadvertent handling mistake by the custodian's internal department could impact next-day processing and fund availability.

Advisors affiliated with LPL are now able to submit client checks for deposit using the Remote Deposit solution found in the company's Streamlined Office suite of tools. Advisors who custody with Fidelity use the Fidelity WealthCentral Mobile app to submit check deposits electronically after completing a one-time application process.

Remote check deposit support is particularly helpful for advisors who spend more time visiting clients away from the office. Deposits can be submitted as soon as a client hands over a check, so the impact of losing a check while in transit back to the office is significantly reduced. (Advisors may still be required to keep original documents should there be a problem with the remote deposit.)

Look for additional institutions to add similar functionality to their technology platforms. For example, Patrick Yip, director of technology strategy for Pershing LLC, commented that advisors currently submit client checks electronically via Check 21, but that the custodian plans to add mobile check deposit capabilities in 2014.

Deserving of honorable mention in this category is the Fox Financial Planning Network and its workflow integrations released for Redtail CRM and Grendel Online (read my coverage in this January 2013 column).

Best Client-Facing Technology
The winner of Best Client-Facing Technology 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 improved personalized service or increased level of convenience when working with the firm.

The product receiving this year's best client-facing technology award is Riskalyze, a Sacramento, Calif.-based company offering a combination risk-assessment and portfolio-construction tool. Riskalyze generates a score from 1 to 100, known as the patented "Risk Number," based on a questionnaire completed by clients. Clients are offered theoretical choices between a certain financial outcome or a 50/50 chance of a nominal loss or a sizable gain in the value of their investments.

Through a series of no more than a dozen questions, Riskalyze calculates each client's Risk Number in roughly five to 10 minutes. With the Risk Number in hand, advisors can then match clients with model investment allocations.

Riskalyze includes five example portfolios, and advisors can enter custom portfolios in the Pro version of the tool. Each portfolio allocation receives its own Risk Number based on its historical performance and risk characteristics.

Essentially, advisors use Riskalyze to identify portfolio allocations with Risk Numbers similar to that of the client's number generated by the questionnaire exercise. The graphics, user interface, and mobile-friendly design are fresh and inviting, and at $99 per month (or $1,089 per year), Riskalyze is an affordable option to better quantify client risk tolerance and corresponding portfolio allocations versus using subjective hunches and intuition.

Honorable mention in this category goes to Vestorly, a digital content marketing platform for financial advisors that aims to boost client acquisition through intelligent, data-driven online marketing.

Innovation of the Year
The Innovation of the Year award is given to a product or service that introduces a new business practice or service experience to the financial-services industry. Innovative tools transform the way advisors interact with clients, enhance personal and organizational efficiency, or enable the delivery of new services not possible or practical in the past.

This year, a rising independent custodian quickly attracted attention from the industry for firing a shot across the bow of the larger, more familiar institutional custodians. With its debut of the Fusion Advisor Workstation, Gainesville, Fla.-based Trade-PMR Inc. is awarded this year's honor of Innovation of the Year.

Fusion is a revolutionary approach to the custody platforms essential to the daily activity inside a financial advisory firm. Others agree, with technology expert and predecessor of this Morningstar advisor technology column Joel Bruckenstein saying Fusion is, "the most impressive custodial interface I've ever seen."

At the time of publication, Trade-PMR provided custody services to over 1,200 independent advisors. Roughly 50 of those firms have been included in the early testing and development of Fusion, with general availability expected for all of Trade-PMR's advisors later this December, according to Trade-PMR chief technology officer Dennis Suppe.

However, Fusion is not an untested custody platform, as it has been used daily by Trade-PMR's internal staff for more than a year, Suppe added. Fusion's user interface is designed around the look and feel of Windows 8, delivering fully customizable account and client portfolio information using "live tiles" and, where applicable, touch-responsive charts and reports (a touchscreen compatible computer is obviously required!).

The live tiles support real-time updates of prices and position information, and favorite tiles can be "pinned" to the desktop layout. Fusion is currently available as a desktop application with a version of the app optimized for Windows 8. Suppe also said that an HTML5 version of Fusion is currently in development and should be ready for use on mobile devices sometime in 2014.

To get a sense of how much of a departure Fusion is from traditional custody software, advisors can view several screenshots made available on Trade-PMR's website.

Despite its radical departure from the traditional static custodial interfaces, Suppe stressed that Fusion is more than just a pretty interface on top of its existing eCustody Advisor Workstation.

"Fusion is built specifically for the touch-enabled devices creeping into today's advisory firms. Developing [Fusion] was not a change for the sake of change. It's the result of a concerted effort to make our software better and our advisors more productive," Suppe said.

What Trade-PMR has been able to accomplish already with Fusion is truly impressive indeed, and well deserving of this year's Innovation of the Year award. It will be very interesting to see how the larger custodians respond to this shot across their bow by their nimble and agile counterpart.

Congratulations to the winners of this year's Best Technology of 2013! Even though I found it a bit more challenging to identify clear candidates for each category, each award winner and nominee deserves to be recognized for its commitment to enhancing the technology and efficiency of the financial-services industry.

Fortunately for advisors, the temporary slump in overall innovation this year should give way to a flood of exciting products and services unveiled in 2014. So it might be prudent to generously pad one's 2014 technology budget as the year draws to a close, and be sure to visit MorningstarAdvisor.com throughout the New Year for more leading investment research and practice management insights.

Happy holidays!


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. The author is a freelance contributor to MorningstarAdvisor.com. The views expressed in this article may or may not reflect the views of Morningstar.

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