In less than two years, nearly 40% of respondents own a tablet. Yet it's taken a bit more than two years for Windows 7 to overtake Windows XP as the leading operating system among advisors.
When Financial Planning conducted its annual tech survey in 2007 - almost 300 advisors participated that year, compared with a record 3,200 this year - the markets were entering what would become the darkest period since the Great Depression. Operationally, the next few years exposed serious deficiencies at many financial firms, leading to the heightened interest in technology.
In FP's survey four years ago, we didn't even ask respondents about their smartphone usage because the industry was essentially devoid of such gadgets (most BlackBerry phones of that era did not qualify as "smart," in our opinion). No surprise, the advisor lacking a smartphone is the rare exception today.
The concept of cloud computing would have drawn a lot of blank stares just a few years ago. There were some web-based applications, but their market share was relatively small. Using CRM as an example, Redtail, perhaps the leading, industry specific, web-based program, was cited by 2% of respondents in FP's survey four years ago. This year, Redtail ranks first and a substantial number of advisors are using other web-based tools.
CUSTODIANS AND B-DS
We noted last year that custodians and broker-dealers have refocused their attention on technology. The change in the attitude of custodians is particularly striking.
From 1991, the year that Schwab launched SchwabLink, its electronic platform for advisors, the main tech focus of custodians was providing access to the back office. Custodians were long hesitant to provide help with selecting, implementing or integrating third-party software, worried about the perception that they were limiting choice.
As 2007 to 2009 made clear, however, scale and investment were necessary to propel advisor technology to the next level. The only players in a position to provide it were custodians and broker-dealers. Both now view technology as a differentiator - a way to attract and retain advisors - as well as a way to help advisors grow their businesses.
Have they succeeded? Custodians are faring quite well.
Schwab leads the pack for the second year running, with 46% of respondents very satisfied with Schwab's technology, and another 40% somewhat satisfied. That's about the same as last year, when 49% were very satisfied and 39% were somewhat satisfied.
Schwab's very unsatisfied rating grew to 8% from 5%. There are a few likely reasons: Schwab's trading platform for advisors was built in 1999. Although there have been incremental improvements, the underlying technology limits what developers can do. Schwab is expected soon to roll out a new platform, which should increase satisfaction. Another issue is the pace of its Intelligent Integration initiative: Advisors have told us they'd like Schwab to move faster.
A bigger issue, and one facing all providers, is that of rising expectations. Advisors eye the changes taking place in the consumer tech market with envy, so it is natural for them to expect more of their tech vendors as well.
TD Ameritrade also posted gains. The very satisfied number rose to 38% from 35% in 2010, and somewhat satisfied advisors totaled 43% vs. 42%. Very unsatisfied advisors totaled 5% vs. 8%. Improvements in TD Ameritrade's technology may be bearing fruit.
Fidelity is making progress, too. While very satisfied clients totaled 26%, unchanged from a year ago, somewhat satisfied clients inched up to 52% from 48%. FP's analysis found Fidelity's numbers have been handicapped by the lack of software partner products offered through the firm's WealthCentral platform. However, Fidelity recently announced a significant expansion of WealthCentral's integration partners and we suspect the firm's showing will improve.
Pershing held steady with 24% of advisors very satisfied and somewhat satisfied advisors at 51% vs. 49%. SSG incurred a drop in very satisfied clients, to 34% from 38%, but a big jump in somewhat satisfied clients to 42% from 33%. Trade PMR also experienced a small drop in very satisfied clients, but also showed a drop in very unsatisfied clients. Somewhat satisfied clients surged to 48% vs. 37%.