LONDON -- There’s sometimes little reward in being a guinea pig.

Advisory firms should pioneer new technology only under some scenarios.

Other times, those firms should spare themselves and their clients from enduring guinea-pig status. Instead, they should wait, watch others and fast-follow rivals who might experiment and fail but will eventually discover what works.

Advisors, consultants and even new-tech promoters agree on this cautionary advice, even though it sometimes does not represent the latter’s self-interest.

“What is the minimum amount of new technology you must have?” Greg Palmer, senior director of events at Seattle-based financial and banking technology conference presenter Finovate, asked a roomful of techies at the firm's Europe 2016 conference this month.

Scrappy entrepreneurs in attendance presented new products for the financial services industry. However, not all audience members, which included representatives of UBS, J.P. Morgan Chase, Goldman Sachs and Fidelity, agreed on exactly when the risks of adopting new tech made it worth the rewards.

Gavin Spitzner, president of New York-based Wealth Consulting Partners, a company that works with advisory firms that was at the conference scouting for new tech for clients, warned advisors against striking out as early adopters. Rather than go with technology aimed at transforming their embedded business operations or back-office functions, Spitzner recommends firms try early technology for marketing campaigns or management of advisors.


Several companies presenting at the conference — including London-based LogicalGlue, Malta-based and San Francisco-based SizeUp — offered software solutions for slicing and dicing big data to provide predictive and prescriptive analytics. Such data might help advisory firms better identify worthwhile client prospects and target marketing campaigns. The price competitiveness of such services for advisory firms, however, remains an open question.

The products are so new that the entrepreneurs behind them are still guessing what the market will bear. “No firm prices exist yet,” conceded Colin Magee, CEO of LogicalGlue, a London-based predictive analytics company.

Advisors should pay particular attention when entrepreneurs introduce a flood of products to address the same problem, Spitzner says. At the conference, for one, there were several startups pushing robo-advisor software for advisory firms to use with clients. “There is more commonality than I expected,” Spitzner said, noting many presenters at the conference had products focused on improving the client experience online.

The market for such software could reach $500 billion by 2020, according to a recent report by Cerulli Associates. Last year when BlackRock, the U.S.’s largest asset manager, acquired robo-firm FutureAdvisor, the expectation became widespread that robo-advising would become a part of almost every advisory firm’s game plan.

Multiple companies at the conference offered a variety of white-label robo-advising software solutions, including products that offered extensive segmentation and co-browsing options.


“The robo-advising movement has gotten out of hand,” Blake Wood told conference attendees. Wood is a senior vice president for Envestnet, a Chicago-based company that has a robo-advising platform managing $900 billion in assets, and 43,000 advisors using it with clients.

“Digitization of the advisory business is something that has already happened,” says Adriano Lucatelli, a board member of Zurich-based, which has developed a robo-advising platform for high-end users. The platform has already been licensed to divisions of Credit Suisse and RBS. Lucatelli wants more customers and envisions his firm as the iTunes of the advisory world, offering a portal from which clients can pick advisors to play, so to speak.

Some of the functionalities of the new tech recently unveiled will become more imperative as time goes on. Others will become quickly obsolete. Given that reality, Spitzner recommends advisory firms seek out the services of what are being called middleware companies, which are automated go-betweens for technology vendors and users.

Spitzner particularly recommends that tact when advisory firms evaluate new technology for their operational and back-office functions. Some advisory firm managers brag about how many vendors they use, as if they command more-competitive pricing by using more vendors, he says. But, he adds, that’s erroneous thinking: “It just doesn’t make sense.”

At the conference, Singapore-based startup Alpha Cloud Payments offered such a middleware option for payment technology. The company serves a role that “greatly amplifies third-party solution access, while simplifying the process of selection of new vendors down to the click of a button,” Alpha Cloud Payments executives told conference attendees.

That claim, one of hundreds expressed by 60 or so companies presenting at the London conference, appealed to a relative high-tech skeptic like Spitzner. “It could be useful for other parts of the business,” he said.

Read more: