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Advisor Insights

New Tools to Better Serve Generation X and Y Clients

Advisors should find the time to demo the top solutions from the 2018 XYPN LIVE FinTech Competition.

Several hundred advisors descended upon St. Louis, Missouri, last month to network, learn, and exchange ideas on how to better serve generation X and Y clients at the fourth installment of the XY Planning Network's annual Live conference. Back this year was the popular Exhibit Hall (with more than 60 technology solution and other service providers participating) and XYPN's annual financial technology competition.

The 2018 XYPN fintech competition fielded more than 20 applicants, with focused criteria to determine what solutions were eligible for consideration. Only technologies specifically designed for advisors and with support for providing services to generation X/Y clients were allowed to compete, and even technologies that met those specifications had to be relatively new to market or particularly innovative to become finalists. Judges narrowed the competition to six before the conference, with the final champion crowned at the event.

2018 Champion: Approach
Created by Mineral Interactive, Approach is designed to help modernize new client onboarding and integrate it into the prospecting process through an advisor's own website and brand. Recognizing that most advisors are relying on outdated contact forms on their websites to begin conversations with and convert prospective clients, Mineral saw an opportunity to build a solution that would eliminate back-and-forth emails and calls, insecure document sharing, and low conversion rates for nonqualified leads. 

Much like a prospective client application system, Approach allows advisors to provide prospects with a clear path to becoming a client by beginning an onboarding process on their own, and answering customized questions created by the advisor that can help with prospect qualification. While some advisors may have implemented a system like this already, most are likely relying on various form building solutions or other third-party tools for basic data collection. Thanks to the product being designed specifically for advisors and the ability to create streamlined processes, advisors may be able to capture more actionable information using Approach while also improving the experience for clients by allowing them to add data across the advisor's tech stack from a single platform.

Advisors have the ability to white-label the product with their own brands, and Approach already has several integration partners, including Riskalyze, Redtail & Salesforce. Given that Mineral Interactive was strategically acquired by the Carson Group even before Approach was crowned the winner of XYPN's 2018 competition, it's not surprising that the judges were also impressed with the idea and product.

Finalist: Life Stage Insights
Created by Baxter Consulting Group--and in keeping with the holistic data gathering theme--Life Stage Insights was designed to help advisors understand what is most important to their clients based on answers to confidential surveys focused on unique life stages, including marriage, parenthood, empty nesting, retirement, grandparenthood, and caregiving. Advisors can invite both clients and prospects to complete the survey via email, and their answers are then interpreted into a report (a Life Stage Profile) that can be used as a planning tool for client meetings, prospect qualification, or a point of further financial life management conversations. Perhaps the best feature of the Life Stage Report is the ability to see the client's priorities ranked in order of importance to them, allowing advisors to focus their energy on addressing those goals or anxieties and provide real value.

Finalist: Payitoff
As total outstanding student loan debt continues to rise, there's no better time for the advent of useful tools to help advisors and consumers determine optimal payoff strategies. Until just recently, there was no financial planning software platform that included student loan functionality. (RightCapital now offers a basic student loan module to analyze repayment strategies). While they are few in number, there are now several software solutions focusing exclusively on student debt.

One of these is Payitoff by Instrumental Labs, which started out of the "frustration of a software engineer with six figures in student loan debt." Originally created as a direct-to-consumer solution, Payitoff is now an advisor tool with a slick design that allows clients to sync/import their loans to the platform using either the aggregation feature or a MyStudentData.txt file. Payitoff then analyzes the client's loans and allows advisors to evaluate multiple payoff strategies--including income-based repayment, refinancing options, and potential loan forgiveness--that can then be presented to the client in a white-labeled PDF report. According to Integrated Labs, Payitoff helped advisors save their clients a total of $680,468 in interest charges during their beta program.

Finalist: Take Command Health
Take Command Health's advisor solution was designed to help advisors assist their clients in finding an affordable healthcare solution for themselves and their employees (if they own a small business), without the need to refer the problem out to an insurance agent. With a "co-branded" experience, advisors can help clients find the best individual or family health insurance option, or help small business owners set up and manage a Qualified Small Employer Health Reimbursement Arrangement to reimburse their employees tax-free for health insurance. Take Command aims to bring the health benefits of larger companies to smaller employers by aggregating individuals and small businesses to negotiate better deals for their members.

Finalist: Touchstone Pathway
Yet another data gathering innovator, Touchstone Pathway was created to help advisors serve clients in a more meaningful way and facilitate conversations about important financial life decisions using data acquired from client surveys. These discovery surveys are designed to uncover clients' hidden beliefs and goals, and can be sent via an automated email. Touchstone Pathway will then suggest additional, more targeted surveys based on the client's answers, with the client's dashboard (or "Big Picture") organizing their answers into clients' desired outcomes, beliefs, and strategies (or "Goals," "Touchstones," and "Pathways"). This "decision architecture" then serves as a framework for clients to stick to their financial plan as life changes.

Finalist: Yourefolio
Yourefolio started as a simple vault solution to help clients organize their financial lives and estate plan, but quickly transformed into a comprehensive solution that allows advisors to take charge of the estate planning process. The platform includes a "stress testing" module that allows clients to better understand their current estate plan (or lack thereof) and the stress they or their families would incur if something happened to them, along with (you guessed it) a data gathering process to identify key items or concerns that need to be incorporated into their plan. It also features a unique "gamification" module to connect with a client's heirs less intrusively so that they can understand your client's estate plan as well, and allows them identify tangible assets they'd like to receive or what role they'd like to play in estate administration in advance.

As noted, several of this year's finalists (and the ultimate champion) were designed to improve holistic planning onboarding and the client data gathering experiences. This space has not seen much innovation in recent years, as companies have primarily focused their new fintech efforts on streamlining the investment account opening process alone. Advisors looking to provide value beyond investment management, and particularly for those with (or hoping to attract) Gen X/Y clients, would be well-served to demo the top tools from this year's XYPN fintech competition.

Ben Brown is a certified financial planner and an IRS-enrolled agent. He is the founder of Entelechy, a fee-only financial planning and investment management firm based in Bethesda, Maryland, serving clients in the Washington, D.C., area and nationally.

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