WASHINGTON -- Technology is rapidly changing the way advisors meet clients, so much so that the relationship may look completely unrecognizable in just a few years. And that transformation opens up several key opportunities for innovators.

“The race is on for somebody to become the Amazon of financial services,” says Boris Khentov, president of Betterment Securities, at a panel discussion on emerging fintech trends at FINRA’s annual conference. “A place you can come to get all your needs met in one place.”

Technology is already pushing the envelope of what’s possible for client-advisor relationships. A culmination of mobility, collaborative tools and AI is going to force advisors to become more comfortable with technology, says Joseph Nadreau, managing director at Wells Fargo Advisors, to a packed room of roughly 100 advisors in attendance.

“Business models are not going to be the same in five years,” he says. “Clients aren’t meeting advisors in their offices. Advisors aren’t even going to their offices.”

Another possible area that could benefit from continued innovation is regtech. The majority of advisors are already using compliance related technologies, according to a December survey by Financial Planning that interviewed more than 1,000 advisors. About two thirds of respondents were using regtech regularly, according to the survey.


While a number of startups have made significant headway, some of the largest firms are spending more money on compliance.

“It’s no secret that we’re heavily regulated,” Nadreau said, adding that his firm’s spend on compliance has increased as a percentage each year. “Any technology that we can use to ease the regulatory burden on advisors and make our lives easier is a good thing.” Wells Fargo has about 15,000 advisors on its network, according to the firm.

“We’re going to see additional disruption in regtech,” said Vijay Sankaran, chief information officer of TD Ameritrade. “Startups will continue to emerge and large companies will pollinate and incubate new ideas from within.”

Being wary of trusting your firm’s data to the cloud is a thing of the past, the panelists said.

“At this point it’s completely table stakes,” Khentov says. “You really think your firm can outgun AWS. It’s not a real issue that the cloud is less secure than servers hosted internally. Everything is a risk, but I’d rather leave it to the experts.”

The discussion wouldn’t be complete without a mention of artificial intelligence. When it comes to AI, firms are improving the technology especially in terms of natural voice recognition to have chatbots handle client inquiries.

Algorithms that use AI and machine learning to automatically create client portfolios make up another prime market for innovation, experts say. But firms should tread lightly, Nadreau says, warning that systems will be as prone to errors as the humans that created them.

“What happens when the first algorithm goes off the rails?” Nadreau says. “We haven’t reached that breach yet, but we will.”

Sean Allocca

Sean Allocca is an associate editor of Financial Planning, On Wall Street and Bank Investment Consultant.