Advisor tech upgrades aim at 'dangerous gap' in client experience

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Some of the largest financial institutions are rolling out glittering new portals that highlight a growing trend: the client experience in wealth management firms is in need of an upgrade.

To address that problem, the new platforms mostly aim to aggregate fragmented client data into a single interface. With information about their clients in one place, advisors can quickly pull up metrics, like recent portfolio performance or risk analysis scenarios, at client meetings, even via their cell phones. Better and faster manipulation of client data can expand and improve the advisor-client relationship, firms say.

“Data aggregation has become a staple in helping the collection of the totality of an individual’s or family’s wealth,” says Bill Crager, president of the turnkey asset management provider Envestnet. His firm recently began offering the robo advisor FutureAdvisor and the retirement planning tool iRetire on its network thanks to a $123 million equity investment from BlackRock.

“Using data to create a picture of that individual — including cash flow and spending habits — and how that impacts the ability to reach long-term goals becomes core to a financial strategy,” Crager says.

BlackRock’s popular risk analysis tool Aladdin is also part of a new dashboard Morgan Stanley has rolled out to its 15,000 advisor workforce. The wirehouse's new WealthDesk portal integrates more than 10 applications, including Aladdin, as well a predictive analytics approach to client communications called "next best action."

Over at UBS, the wirehouse penned a deal with Broadridge Financial Solutions to revamp its advisor tech platform for its U.S. wealth management business in October — a potentially huge, multiyear undertaking.

The rash of new tech upgrades is addressing a serious need: Customer experience metrics at wealth management firms have remained flat for the third year in a row, according to a recent Forrester study.

At crosscurrents with the flow of flashy improvements is a corresponding push to curry favor with clients by lowering their costs, the study found. Roughly 20% of firms are projected to abandon customer experience initiatives in 2019, in favor of lowering price points for clients. This group may not resume any initiatives in the near term until better — and more integrated — systems come to market, according to Forrester.

Pushing both trends, the report found that, “the customer experience results show a dangerous gap in customers’ sense of emotional engagement and loyalty" with their firms.

Addressing the problem via another tack, firms also are upgrading client-facing portals. AssetMark, another TAMP, introduced a new wealth management and planning platform — as well as an updated mobile-first client portal.

The two upgrades are intended to work in tandem to give clients the most up-to-date access to their information. Advisors choose a client’s financial strategy through the advisor platform, including portfolio selections and risk tolerances, which are then reflected in the investor portal in real-time, according to the firm.

A redoubled focus on client experience could serve advisory firms well; the top motivating factor for technological innovation was enhancing the client experience, according to a 2018 study by the London-based consulting firm ClearView Financial Media.

“If you’re ‘doing’ data well, you should be able to really improve the client experience and reduce risk,” Verona Smith, head of platform for the U.K.-based Seven Investment Management, says in the survey of 85 global wealth managers.

One fintech startup has attracted investors to build its focus on consumers. The wealth management tech provider d1g1t raised $6.8 million to fund the growth of its latest wealth management offering. The cloud-based platform syncs a client's financial plan to their investment goals, risk profile and portfolio, so an advisor can keep track of the entire relationship, according to the firm.

“The absolute most important thing is trust which itself is a function of things like price and brand. But, then after those factors, differentiation depends on the client experience and how that is delivered,” Smith says in the study. “In our sector that will always include face-to-face interactions, but increasingly via the whole range of online ones too.”

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Fintech Practice management software Client communications RIAs Morgan Stanley BlackRock Envestnet