A Closer Look
A number of leading broker-dealers are helping advisors stay ahead of the technology curve.

The technologies that drive advisory practices and the technologies that advisors use to interact with their clients are rapidly evolving. Many advisors rely heavily on their broker-dealers to ensure that they have the technology tools they need to stay current and competitive. Here’s what a number of leading broker-dealers are doing to help their advisors stay ahead of the technology curve.

Cambridge Investment Research Inc.

Cambridge Investment Research recently launched a major initiative in the retirement plan space. Retirement Center is a comprehensive, online resource for advisors. It offers instant access to multiple technology subsystems and industry-leading providers. The goal of Retirement Center is to enhance advisors’ retirement engagement to efficiently and effectively provide essential retirement plan tools and expertise. 

The Retirement Center’s disclosure and data aggregation tool delivers a customized disclosure process while also forming a data foundation with periodic data feeds from 50 different record-keepers to give advisors a snapshot of plan assets so they can help analyze plan trends. A custom search feature enables advisors to identify the best fit for client needs based on the services and features desired.

In addition, the Retirement Center includes access to a dashboard of client retirement plans, automated daily transfers between participating vendors and customizable subsystems, retirement plan and individual participant data mining, more than 50 participating record-keepers, investment analytics, fund monitor reports, fee benchmarking tools, targeted educational messaging, a knowledge bank of resources and best practices, support for fiduciary plan sponsors and a dedicated team of support personnel.

Ryan Reineke, Cambridge’s senior vice president of technology and operations, highlighted new additions to Cambridge’s advisor workstation. The platform now includes turnkey asset management wrap account solutions with model portfolios managed by nationally recognized investment strategists as well as asset management account solutions managed by rep-advisors. This complete solution integrates proposal generation, account process, investment model management, trade order management, fee billing and performance reporting.

Looking ahead to 2016, the big initiative is an effort to provide digital advice through the Investor Center. Cambridge currently does not have an investor portal, so the Investor Center will fill this gap in the Cambridge technology offering. Although he provided few details, Reineke says that the goal of the initiative is to wrap work flows into the client experience. 

Commonwealth

Commonwealth Financial Network, the nation’s largest privately held independent broker-dealer, has long had a well-deserved reputation for technological excellence. Darren Tedesco, the firm’s managing principal of innovation and strategy, who started with Commonwealth in 1994, has spearheaded the firm’s technology efforts since 2000. 

The firm’s latest major technology initiative was the rollout of its new proprietary CRM solution. Previously, Commonwealth advisors used a customized version of Microsoft Dynamics CRM that Tedesco characterized as “too slow, too clunky and not integrated enough.” According to Tedesco, his preference would have been to buy a CRM solution rather than build one, and the firm spent months evaluating potential candidates. Ultimately, only one candidate came close to meeting Commonwealth’s needs, and even that one was lacking in a few areas, so Commonwealth built its own.

Tedesco says Commonwealth’s new CRM system is the fastest he has ever used. He offered an example of one process that required 40 clicks in his previous system. Commonwealth has reduced it to five. “We are very happy that we decided to build our own CRM application,” he says.

Other enhancements to the Commonwealth platform include the addition of household investment modeling: You can now assign a single model across multiple accounts in a household. This allows for asset location optimization. 

Commonwealth has also rolled out native mobile apps for its advisors. The firm released its first mobile capability in 2006, but it consisted of a mobile website, not apps. The advantage of a mobile site is that it allows the developers to create a single platform. This allows for more rapid upgrades and economies of scale. It also means that a site can be compatible with multiple mobile operating systems. When it is not apparent who the dominant mobile players will be, or when advisors are experimenting with multiple providers, mobile web is a reasonable approach. There are disadvantages to it, however. The primary one is that not all systems can access all of a device’s functionality without an app. So, for example, to interact with a device’s camera, which is necessary for mobile check deposit, an app is a superior solution. According to Tedesco, 81% of the interactions smartphone users have are with apps, not with mobile sites. As a result, Commonwealth developed apps for Apple and Android.

Looking ahead, Commonwealth will launch a new streamlined account opening process early in 2016. There will be one master agreement for all account openings, not multiple individual ones, as is the case today. The whole process can be completed digitally, without the advisor and client meeting to complete the documents. Tedesco credits Fidelity’s National Financial clearing arm for being progressive and cooperating with Commonwealth on this new approach to account opening.

Commonwealth also plans to launch a new website builder by year’s end. Commonwealth has been hosting advisors’ websites since 2003, but the new system will allow it to move away from template websites so it can offer true custom websites to its advisors. The system will also allow the company to bring new sites online much more quickly.

Lincoln Financial Network

According to David Berkowitz, president of Lincoln Financial Network, his firm decided in 2014 to undertake a major strategic technology initiative: to build a next-generation advisory platform. Lincoln has partnered with Fidelity to build this new advisor platform: “They are building it according to our specs,” Berkowitz says.

Currently, Lincoln clears through both Pershing and National Financial, Fidelity’s clearing arm. As part of this initiative to gain efficiencies, the firm will move to an exclusive clearing arrangement with National Financial.

When the first version of the new platform, dubbed “Advice Next,” debuts in the latter half of 2016, the focus will be on three goals: automation, integration and productivity. The whole idea is to connect advice with technology to better serve the end client.

When completed, the Advice Next platform will offer integration with three CRM applications: Salesforce, Redtail and Ebix. Third-party marketing databases will be integrated with the platform. It will feature enhanced managed account platform capabilities through Fidelity and Envestnet. Lincoln’s proprietary Design It financial planning application will also be integrated into the platform.

Lincoln Financial is also working closely with Fidelity to develop unified account opening capabilities and to embed sophisticated business process management into the platform. 

Berkowitz emphasized that the release of the Advice Next platform is only the beginning of the technology initiative. After the initial rollout, the firm will turn its attention to adding functionality for a version 2.0 release. This second release is expected to add mobile capabilities, scenario planning and dynamic financial planning. Berkowitz says that the goal of version 2.0 will be to drive further advisor/client collaboration in the future. 

Clearly, with the rollout of such a new, powerful platform, advisor adoption will play a key role in the product’s success. Lincoln Financial is already gearing up to meet the challenge. The company will have 20 dedicated practice management consultants go out on the road to help drive advisor adoption. “We are making an investment in people to help drive productivity,” he says.

LPL

Technology changes have been under way at LPL for over two years now. Last year, the company did a considerable amount of work laying the technology foundation for the future, but much of the work was not apparent to advisors. The initial work involved building the infrastructure that would support all that was to come. 

Now ClientWorks, the enhanced, integrated cloud solution for advisors, is starting to emerge. Currently, approximately 300 advisors are participating in the pilot program, and more are being added. It looks to be a vast improvement over the old BranchNet system.

ClientWorks has a clean, intuitive interface. Its sorting and filtering capabilities are excellent. The system does away with some of the most annoying aspects of BranchNet—such as the ugly yellow screen, its incompatibility with many popular web browsers and the user’s inability to use the browser’s “back” button. ClientWorks, by contrast, is mobile-friendly. Its responsive design means that it will have a display optimized for the device the user is using.

Unfortunately, some functionality has not been moved to the new platform yet, so ClientWorks users will still need to use BranchNet for certain functions, such as trading.

The trading has been enhanced, but the update was long overdue. According to an LPL spokesperson, it used to take an estimated 45 hours for an advisor with 600 accounts to sell out of one security position and replace it with two other securities. That’s because in the past, you had to trade each security for each account separately. The same set of transactions now takes approximately seven minutes with the addition of block trading and various other improvements. While this is great news for LPL advisors, the obvious question is, “What took you so long?” Those functions, after all, have been available to many advisors for years.

LPL has also upgraded its rebalancing technology. Formerly, it was powered by ASI. It is now powered by FolioDynamics. According to LPL, the new system “blows ASI out of the water.” Although LPL does not yet offer asset location or tax-sensitive rebalancing optimization, these are on the road map.

LPL recently completed an integration deal with Redtail CRM. The response from LPL advisors to date has been overwhelmingly positive. Currently, the Redtail integration is a one-way integration only—ClientWorks data moves to Redtail—but a bidirectional integration is in pilot now, and more enhancements to the integration are scheduled for future release. Perhaps the greatest challenge for Redtail in the short term will be to efficiently on-board LPL advisors fast enough to satisfy demand.

There have been numerous other technology improvements over the last 12 to 18 months. The reporting solution has been improved, as has tax processing. The client portal was totally revamped last year. There is also a new e-mail platform hosted by LPL.

And LPL recently announced the launch of its affinity program. This makes a wide variety of technology solutions available to advisors at discounted prices. 

LPL also announced that it has begun work with a third party on developing a robo-advice solution, one that is intended to complement the advisor’s core business. Few details have been made available, so it is not clear to what extent the technology will be driven by a third party, or how much of it will be based on LPL systems.

Wells Fargo Advisors

According to Kent Christian, the president of Wells Fargo Advisors Financial Network, his firm’s competitive advantages are its size and scope, which allow it to invest in technology. Wells Fargo serves advisors in three channels: registered reps, advisors registered with an RIA and hybrid advisors—approximately 15,000 advisors in total. So the company is familiar with all aspects of the advisor landscape.

Christian says that much of the work Wells Fargo has been doing lately is focused on enhancing the user experience. In the case of SmartStation, the integrated advisor workstation for Wells Fargo advisors, the focus has been on better navigation and ease of use. For example, previously the system only allowed advisors to work on one client at a time. The new version allows advisors to work on multiple clients. 

A new “My Home Page” acts as a dashboard, allowing advisors to see all of the information they need to see to start their day. An “Attention” section highlights bonds that are maturing, annual client reviews that are due and the like. The new, simpler layout allows advisors to prioritize their day as well. The dashboard allows for some customization so advisors can make it their own. 

SmartStation includes a proprietary CRM application, although advisors do have the option of selecting another CRM application if they choose to do so. Enhancements to the proprietary CRM should make it more attractive to advisors. The application is integrated with the Home Page and with SmartStation. You can launch the CRM systems from the home page. It now syncs with the MS Outlook calendar, a feature many advisors desired. The application also has voice recognition capabilities, so advisors can dictate meeting notes right into it. 

Looking forward, Wells Fargo plans to roll out SmartToGo, a light, tablet-friendly supplement to SmartStation. It is designed for the advisor who is going out of the office to meet with a client. It will include the ability for an advisor to walk a client through an Envision plan (the proprietary Wells Fargo financial planning process). It will allow the advisor to access information from the research team. It will also provide functionality that allows the advisor to stay in touch with his or her office and to access contact information. The goal of SmartToGo is to ensure that advisors are less tethered to their offices and less tethered to their laptops in the future. 

Wells Fargo tech plans in 2016 include making it easier for clients and advisors to collaborate. For example, the company plans to allow clients to run Envision plan scenarios on the client application that parallel those on the advisor application. The company will also build in advisor notifications, so if a client has been running college scenarios on the client app, for example, the information will be displayed on the advisor dashboard so that the advisor can reach out to the client and offer assistance.