ST. LOUIS — The increased sophistication of advisor tools has also eased the transition to independence, says Vanessa Oligino, TD Ameritrade Institutional’s director of RIA practice management.
Oligino, who’s been with TD for nearly a decade, says most independent firms are still focusing on the tech basics, including adopting CRM systems, financial planning software and automated rebalancing software.
But it’s incumbent upon the advisor to communicate with vendors and stay on top of the evolution of wealthtech as it expands to automate other aspects of the planning business, she says, or else “it's hard for the advisor to even catch up.”
The following conversation has been edited for length and clarity.
What are the biggest challenges facing independent advisors?
OLIGINO: There's a number of things that advisors are grappling with right now. One is growth. How can they continue not only to grow for the sake of growth, but grow in an intentional way?
People are rethinking the way they live their lives and advisors are going to have to evolve their business models so they can continue to grow and be able to serve the needs of investors as those needs change. It's tough. Advisors have a really good business model today, it works well with the clients they have and it's quite profitable. Change is one of the most challenging problems advisors are facing today.
What should advisors keep in mind during volatile markets?
Investment advisors actually do quite well in terms of client acquisition during a market downturn. People are looking for that fiduciary advisor to have their best interests at heart.
Advisors have to continue to communicate with their existing clients really proactively so that they know that their clients know that they are the person that they can turn to with questions during times of uncertainty. And just to continue to reinforce that.
There is a lot of due diligence and hard work that goes into creating these financial plans for the long term, and those longer-term plans are still valid regardless of the economic environment.
Coincidentally, [downturns are] also a great time to pursue growth because there are a lot of investors — that were either DIY or don't work with a comprehensive financial planner — who you know are going to be panicking. Should we move into a market downturn, many of those investors will feel like they don’t have the support they need.
What is fueling the move toward the independent channel?
The network of vendors supporting the industry has grown substantially. So if you were a breakaway 10 years ago, there were a lot more DIY [tasks] that needed to happen in order for you to get your business up and running. Whereas today, there are full blown technology suites that you can just plug directly into and a number of vendors that you can pick and choose from for any of your needs running your business. So it's a lot easier than it was in the past.
What are the top technologies advisors are looking for?
The most widely adopted type of technology is the CRM system, obviously. After that, the most useful is planning software. We are seeing a rise in firms that are leveraging automated rebalancing software. There are a lot of firms trying to create efficiency and automation wherever possible so that they can redeploy their people resources to be more client facing and revenue generating wherever possible.
Where do you see technology evolving?
The technology solutions available today can do about anything that advisory firms need. There's just so much choice and each of these vendors continue to innovate and are coming out with enhanced capabilities. It's hard for the advisor to even catch up.
Typically, what we see with advisors is they purchase this technology at a point in time and then don't really look at their technology stack for the next three to five years. And they actually don't realize how far things have evolved. If they would check back in and actively manage their vendor relationship, they may find out that they’re only using 10% of the capabilities. So I think the problem with technology and advisors is they don't keep up and because there's so much available, they feel very overwhelmed.
