Advisor tech shifts focus to next-gen clients

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Advisor tech tools are increasingly reflecting the demands of the next generation of clients.

At XY Planning Network’s fourth annual FinTech competition, half of the finalists — Holistiplan, College Aid Pro and Knudge — focused on college planning, client accountability and aiding tax returns.

As the advisory space has come to understand the financial complexities facing clients under 50, solutions have evolved accordingly, says Michael Kitces, a Financial Planning contributing writer and co-founder of the XYPN.

“If you go back four or five years, in both the early days of our fintech competition and just where the industry was a couple of years ago, doing financial planning for young people was still kind of a euphemistic label,” Kitces says.

Holistiplan won the competition. The technology reads tax returns and provides advisors with a two-page client-ready report that includes helpful metrics and potential planning observations.

College Aid Pro, a platform that allows advisors to work with their clients manage their future and current college tuition payment, received an honorable mention from the judges.

“Advisors have recognized some of the holes we have in advisor fintech,” says Holistiplan co-founder Kevin Lozer. “We realized we could build something not just for us, but for our peers that want to be better and more efficient financial planners.”

What sets platforms like Holistiplan, College Aid Pro and Knudge apart from the rest is that they are the first of their kind with virtually no competitors, Kitces says.

“There's really nothing else that does any of what they do, at least not specific to our industry,” Kitces says.

The number of applicants in XYPN’s fintech contest has grown, starting with 19 in 2015 to 25 this past year. The depth of financial planning solutions at this year’s conference was more than any other advisor tech conference, according to Kitces.

As the trend of RIA M&A consolidation continues, it appears as though advisor technology is following suit, says Chris Manker, founder of Nexa Insights and fintech competition finalist.

“While 10 to 15 years ago integration and innovation was pushing the industry toward a technology stack focused on a best-in-breed solution, the pendulum has now swung back in the other direction,” Manker says.

Custodial innovation and technology acquisitions have expanded the service offerings of some of the biggest players, turning them into full-service providers, Manker says.

NEXA Insights is a survey tool that lets advisors access information from a client and set up a survey to optimize their practice and build a client experience from the results. The platform guides advisors through the survey development process and lets them distribute the survey to clients and gather feedback.

One unique characteristic of XYPN’s fintech competition is that approximately 50% are fintechs launched by advisors. The number of advisor-led fintech is rising steadily, Kitces says, noting there are few little external startups entering the advisor world.

“What advisors do is so specialized and there's so many different advisors with different business models to do different things that I'm actually not certain if we're ever going to see a lot of the innovation come externally,” he says.

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Fintech Financial planning XY Planning Network College savings plans Student loans