Big wealth management firms are now pouring money into online advice platforms, with the goal of securing future digital-savvy clients.
However, that innovation push isn't directly addressing the needs of young advisers serving those clients, says Michael Kitces, partner and director of wealth management for Pinnacle Advisory Group.
"Look at tech innovation in the wealth management space," Kitces says. "Companies are virtually lining up to be the 47th automated service. We're past that. We're looking for solutions for everything else after a client's money has already been invested."
Kitces is also co-founder of the XY Planning Network, which this year will launch a fintech innovation competition at its annual San Diego conference in September.
The hope, he says, is to recognize and promote good innovation, and help spur the development of tools for advisers serving Gen X and Gen Y clients.
For example, Kitces says, there isn’t an adviser tool that performs student loan debt analysis, despite it being the top financial concern for young clients — with an estimated excess of $1.3 trillion in student loans in the U.S. alone.
Other areas requiring support are basic budgeting and cash flow tools, he adds, to help advisers show younger clients how to manage day-to-day household finances.
Read more: Kitces: Beware Student Loan Refi
The network will be seeking applications by firms that have launched in the last 12 months, have less than $1 million in annual revenue or from an established company offering "a new feature that is substantially different from the existing product line."
Kitces says that he expects up to 20 entrants in the inaugural competition. Applications will have to be submitted by July 15, and six finalists will be announced on July 22. Finalists will be invited to the conference to present a live demo before a panel, and a winner will be decided.
Among the judges reviewing the finalists, Kitces says, are FPPad founder Bill Winterberg and Betterment Institutional's Tom Kimberly, adding that the network has received some inquiries from VCs interested in attending the finalist demos.
"There are always so many new companies vying for financial advisers," he says. "We're trying to do what we can to help positive and relevant companies get reach in this space."