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.

System integration was also improved in 2007. Commonwealth now features tighter integration with companies such as Morningstar and Fidelity (NFS). The net result is an improved end user experience ensuring that data is entered only once. One example of this was the introduction of the global address change tool, which allows advisors to update addresses and/or phone numbers for books and records across all accounts within a household with a single push of a button.

Several enhancements were made to Client360° Documents, the company's hosted imaging system. These included the ability for advisors to add an infinite amount of subfolders and to store as many documents as they want on Commonwealth's system. (Commonwealth claims that approximately one-third of its advisors are now completely paperless.)

Many additional enhancements are due in 2008. Currently, Commonwealth supports two portfolio accounting engines, one from Advent and the other a proprietary one. This year, both of the existing engines will be retired in favor of a new one that combines the functionality of both into a single product. The goal is to create a more intuitive and robust portfolio management system. This new system will be the impetus behind several other major initiatives.

After the new portfolio management system is deployed, plans call for the release of something Commonwealth calls "Portfolio Cruise Control." "If advisors could initially set up a client's portfolio and then rarely have to think about it again unless a predetermined 'event' was triggered and kicked off the work flow, advisors would be able to spend a lot more time with clients, and/or their staff would free up a huge amount of time, not to mention the obvious compliance benefits," says Tedesco. Examples of events that might trigger alerts include model portfolio tolerances being exceeded or a surprise withdrawal of cash by a client.

A related concept is something Commonwealth is calling the "Easy Button," which will give advisors (and clients who are entitled) the ability to run the client's portfolio review packet with one push of a button. The advisor picks the combination of reports that suits her needs up front, sets the options on each, and from then on one click gets her a consistent, polished review packet that is branded with her company.

LPL

2007 was a year of significant technological improvements at LPL Financial. Early in the year, the firm introduced iDoc, described as "a compliance approved document management service," by LPL Vice President Kevin Dinino. With this system, reps can fax documents to LPL, where they are digitally processed and indexed.

In the latter part of the year, LPL rolled out WealthVision for its advisors, a private, branded version of eMoneyAdvisor 360. Like the standard version of eMoney 360, it includes six core modules: retirement, life insurance, disability, long-term care, education and accumulation analysis.

In addition, it includes a retirement income planning tool, a personal client financial home page that enables advisor/client collaboration, an alert system, a direct custodial feed from the firm for all LPL and LPL-networked accounts, access to LPL's iDoc capabilities for document storage, and a client profile grid that identifies potential client needs and opportunities. The profile grid includes specific LPL home office contact information (phone numbers, names, etc.) and capabilities (direct e-mail to a department or person) allowing the advisor to reach home office personnel who are in a position to help with specific implementations, recommendations and/or products. The system provides custom LPL report templates designed to streamline the development of financial plans for common client types and planning scenarios, plus it offers asset classing for securities and default asset allocation models.

In 2008, LPL will greatly expand the deployment of WealthVision. "We only have rolled it out to about 600 advisors so far," says Bill Dwyer, president of LPL Financial Independent Advisor Services, "but we will make it available to many more advisors in 2008."

LPL will also roll out a turnkey asset management platform called model wealth portfolios in 2008. With this program, targeted mainly at accounts in the $150,000 to $650,000 range, advisors and their clients will fill out a profile, then the program will take care of asset allocation, manager selection and even automatic portfolio rebalancing.

Mutual fund prospectus delivery will be automated for the first time. Currently, advisors must deliver a prospectus and secure a receipt from the client. This can be time consuming, hence costly. Under the new system, LPL will automatically deliver the prospectus to the client, freeing up more time for the advisor.

LPL is also making some significant changes behind the scenes. The firm is adding a third production backup center to complement the ones it currently has in San Diego and Charlotte, N.C. In addition, LPL advisor  support employees will be upgraded to a Seibel CRM system that is superior to the current application. Dwyer expects this upgrade, once deployed, to yield service enhancements and productivity gains.

LPL Affiliates

The LPL Affiliates-Mutual Service Corp., Waterstone Financial Group and Associated Securities Group-warrant their own discussion because these firms were previously owned by Pacific Life. As a result, the advisors operating through these affiliates have a distinct operating culture and a distinct technology platform they've used for years.

According to Derek Bruton, CEO at LPL Affiliated Broker/Dealers: "We have made a commitment to the affiliate technology platform because many of our advisors prefer it. Our affiliates have cleared through Pershing for years, and many prefer to stay with what they already know and like. We will not force them to change." Bruton also says that many of the advisors in the affiliated channels use Albridge for portfolio management and consolidation. Because the reps are comfortable with Albridge and that is where their data has always resided, LPL will be expanding the affiliate relationship with Albridge in 2008 to strengthen the data aggregation that currently exists.

Specifically, LPL will be integrating NextExchangePro, Pershing's brokerage platform, with BranchNet, the LPL front end. This will allow reps to access LPL advisory accounts as well as Pershing accounts through a single secure sign-on. When the upgrade is completed, advisors will also be able to access research and LPL service capabilities through a single interface. In addition, the data from LPL Advisory and from Pershing will feed into Albridge, so advisors will be able to view a single consolidated view of the client's accounts through Albridge.

Raymond James

2007 was an active year for Raymond James on the technology front. For financial planning, the firm rolled out SunGard PlanningStation to all financial advisor desktops. To help with fixed-income analytics, the firm began offering in-depth reporting and views of fixed-income holdings. The Orchestria e-mail review system was implemented for better e-mail monitoring and review.

In addition, Raymond James started the rollout of Microsoft CRM, which integrates the back office and account inquiry. Today, right from within the CRM application, advisors can access activities, tasks, notes and meetings. They can also assign tasks to other parties. In addition, advisors can access account information at either the individual or household level.

Josh Bohlander, a senior manager of technology product management at Raymond James, says: "One of our goals is to make CRM [client relationship management] software the hub for any client-based application. We don't want advisors to have to jump from one application to another. We don't want them to have to re-enter data." For Raymond James advisors, the CRM application is going to serve as the dashboard, or the hub, of their technological interactions.

In 2008, Raymond James will upgrade to the highly anticipated version 4.0 of Microsoft CRM, which will allow the firm to extend the capabilities of the CRM system in a number of important ways. Perhaps the single most compelling improvement over the current system will be the much more robust work-flow capabilities that version 4.0 provides. Raymond James will use the new infrastructure to automate the initiation of work flows, as well as automate the tracking of them.

For example, when 4.0 is deployed, if an advisor re-characterizes a prospect in the CRM system as a client, the software will automatically launch a "new client work flow." This can be customized to the individual advisor's office. It might also be able to provide the client with account applications, transfer forms, a contract, disclosure materials, etc. Another step might be to follow up with the new client to make sure all the forms are signed and received back by the advisor. This may be followed by a welcome letter. An assistant would have to check with the back office to make sure all the paperwork was processed, and then alert the advisor so trades could be placed. These work flows can have multiple steps assigned to multiple employees. Some steps can be created on a fixed time line; others will be contingent on a previous step being completed.

To simplify work flow while maintaining maximum flexibility, Raymond James plans to create templates for a variety of tasks. Individual branches can then take these and easily modify them to meet their individual needs.

To continue making the CRM application the hub of activity, in late 2008 or early 2009 the SunGard PlanningStation will be integrated with Microsoft CRM. In January 2008, Business Analyzer 2.0 was rolled out to reps. This application offers advisors numerous ways to analyze their book of business. Reports available include: top 50 clients, bottom 50 clients, assets by type and many more. This year Raymond James plans to enhance the reporting capabilities of this application and integrate report-generating functionality into a single location that can be accessed from within the CRM system.
Other technology enhancements scheduled for 2008 include a new supervisory workstation for faster and more efficient trade reviews, a new annuity order system to speed the application process and a business automation initiative to improve the processing of paperwork received by the home office.

Securities America

"Securities America is making it easier for advisors to do business -whenever and wherever they want-while at the same time helping them meet compliance regulations and secure their practice," says Janine Wertheim, president of Securities America Advisors Inc. and chief marketing officer of Securities America Inc.

During 2007 the firm enhanced technology to help its advisors protect their practices while streamlining compliance and supervision requirements. As a result, Securities America is already positioned to handle recent FINRA rule changes with little or no additional impact on its advisors. Strong supervision systems are now in place to help advisors document suitability and compliance. For instance, online OSJ pre-trade approval and e-mail surveillance systems along with a post-trade review system were rolled out in 2007. Additional compliance tools and enhancements are in store for 2008. These include an online advertising review system and a post-trade review system. A new e-mail solution ensures the permanent archiving of all e-mails while allowing advisors to instantly retrieve old ones.

Securities America is also rolling out technologies to help advisors work whenever and wherever they want. For example, unlike a number of other B/D's that are deploying signature pads as an alternative to the traditional ink-to-paper signature, Securities America is rolling out the Smart Pen. This digital signature solution surpasses the old signature pad technology while protecting the advisor in case the signatures are contested later. No longer do advisors need to carry around a clunky laptop or signature pad. They simply print out the applicable form on special paper and use the ballpoint Smart Pen to complete the application. The pen "remembers" and stores 600 pages of handwritten information so the advisor can handle a full day's workload with a single Smart Pen. At the end of the day, the advisor docks the pen to a computer and all information is downloaded into the form, ready for transmittal.

As a security measure, the pen is keyed to one PC, so that if it is lost, no one else can download the info. Instead of calling a dictation service to recap a client meeting, the advisor can simply use the Smart Pen and notebook, and the notes are transcribed, ready for attachment to the client's record. According to Securities America, the Smart Pen meets all regulatory requirements. It should be available by April 2008.

Securities America will build upon existing paperless office technologies. For some time, reps have been able to upload required books and record documents to Securities America for digital storage. They are now focusing on reducing the length of forms and capturing and processing data. At the request of its advisors, Securities America also is working on a tool that will provide a desktop solution to store documents (other than those sent to them for processing) that interacts with the Securities America imaging platform. The idea is to offer advisors a "desktop vault" or a shadow copy of all their files locally for fast access on a daily basis, while storing another copy on the Securities America Servers.

Securities America continues to apply technology to aid retirement income distribution planning. In 2007, the firm integrated the ROI Profile, a suitability questionnaire that measures a client's risk tolerance for both guaranteed and nonguaranteed income, into the Income for Life Model proposal system from Wealth2K (www.wealth2K.com), a software and media company targeting the financial service industry.

In 2008, the firm will be working with its fee-based platform provider EnvestNet to develop the capacity to automatically implement and track a time-segmented distribution strategy within Securities America's managed opportunities platform. The firm also plans to enhance its "rep as portfolio manager" program, called Managed Opportunities Advisor Directed, in 2008.

Common Goals

While each of these firms has its own specific agenda, there are some common themes that all of them are addressing. Broadly speaking, they are making significant technology investments to lift the administrative and compliance burden on advisors. The B/D's clearly realize that time spent on these tasks takes advisors away from their primary mission: serving their clients, and there is an industrywide push to help them do this with better and more automated financial planning, portfolio management and compliance tools; turnkey asset management programs; and paperless office technologies. If successful, the results will be beneficial to everybody-broker-dealers, advisors and clients alike.