In last month's column, I discussed the technological improvements being made by some of the custodial firms that serve independent RIAs. This month, I turn my attention to tech upgrades at some of the larger independent broker-dealers.
As I've previously pointed out about custodians, most RIA firms depend heavily on their technology for trading. But a few RIAs also require more expanded tech needs such as automated forms processing, outsourced technology services, rebalancing and more. But broker-dealer reps and those operating under an independent B/D's RIA registration are much more dependent on the technology of their broker-dealer than independent, unaffiliated RIAs are. This means that the quality and breadth of the independent broker-dealer's technology offering plays a crucial role in the overall efficiency of those who use their hardware, software and services.
AIG Advisor Group
The focus at AIG Advisor Group is on helping advisors grow their businesses, according to Randy Epright, executive vice president and chief operating officer. One initiative that should help is the account redesign project, scheduled for rollout in the first quarter of 2008. "We are offering a true client-centric model that allows advisors to view their business holistically," says Epright. For example, where permitted by regulation, if a client has multiple accounts only a single signature and disclosure will be required rather than one for each account, thus minimizing repetitive paperwork.
The firm also has partnered with Pershing, its clearing firm, to move all clients to a new platform that automatically flags online any missing client data so the advisor knows to contact the client to supply the necessary information.
As part of the transition, AIG has gone to the trouble of linking under a single registration all existing accounts for clients who have multiple accounts on the platform. So, if John Smith has three accounts on the platform, the advisor will not have to link them manually; AIG has already done it. If a husband and wife each have accounts on the platform, or if Mr. Smith has an individual account plus a joint account with his wife, those accounts would not automatically be linked, but the advisor could create an "association" manually. The result of this transition should be a more client-centric view of data, increased integration, streamlined workflows and increased efficiency.
On the investment side, AIG is creating a unified managed account platform as an extension of its existing fee-based program. The platform will feature an integrated set of investment management tools as well as a consolidated statement. An order blasting system will feature the ability to rebalance one account or many accounts to a model or target allocation. The system rebalances at the account level.
In the area of paperless office technologies, AIG plans to extend the use of existing data in order to prefill forms. The firm has created interfaces for a select subset of vendors; these vendors, in turn, will accept the prefilled forms electronically.
"Our investment in technology has been growing quite aggressively over the last few years, and we will continue to spend in support of our advisors," says Epright.
Commonwealth Financial
According to Darren Tedesco, the director of business systems and strategic development at Commonwealth Financial Network, "We regularly hear from advisors who join us that what differentiates Commonwealth's technology from that of our competitors are the integration and simplicity of our tools. 2007 was a year of making our core offerings even more intuitive and more integrated."
In 2007, Commonwealth rolled out the second major release of Commonwealth CRM. This product is based on a Microsoft CRM core, but it includes proprietary components as well. There are now approximately 1,500 users of the system. The firm has also completely revamped the interface of Client360°, its proprietary portfolio, document, contact and wealth management system.