“To be or not to be” may have been Shakespeare’s question centuries ago, but the current question for broker-dealers is “to build or to buy?”

As financial technology becomes more complex and more necessary for advisors, broker-dealers have to decide how to provide the best products to attract more advisors and RIAs to their platforms.

Some, like Commonwealth Financial Network in Waltham, Mass., and San Diego, have built impressive in-house platforms that the firm says set it apart from its competitors. Others, like Kestra Financial in Austin, Texas, have bought the best platforms built by others to offer to their advisors.

Other broker-dealers fall into one of the two categories or they have created hybrids, buying some things and building others internally, like Ladenburg Thalmann has done. “The recruiting landscape is more challenging than it has ever been, and advisors are weighing their options when they want to move,” says Greg Gohr, senior vice president, wealth management, at Commonwealth. “We give advisors two choices of how they want to affiliate with Commonwealth: They can operate under our RIA and we handle all of the compliance, or they can maintain their own RIA.”

To provide the best platform for the advisors and RIAs, Commonwealth has built Client360, a complete fintech platform.“Where most other firms cobble together a fintech program, Commonwealth, over the last 20 years, has built a unified, in-house system for all the technology advisors need and use,” says Kol Birke, managing principal of corporate strategy at Commonwealth. “It started with a client’s holdings, balances and activity; then we added document planning and CRM. Now we have developed Client360 to enable advisors to have a one-click review of everything about a client with the advisor’s logo on it.

“Advisors have the ability to hit a single button and get performance reporting, goals summaries and planning. It lets advisors set goals, and sends alerts if the advisors and clients are not on track. Advisors no longer have to spend hours putting reports together for goals-based planning,” Birke says. “An advisor can add a new goal in a couple of minutes and it is integrated with the client review to make it easy for the advisor to talk with the client.

“The advisor can then repurpose other staff members to higher level activities rather than having them entering data six different times. This is a massive differentiator for Commonwealth.”

The firm has also developed “Investor360,” which allows clients to log into their portfolio from any device.

“The wave of the future,” Birke says, “is to find more ways to engage a client digitally in the way the client wants. In the next month or two, we are adding compliant text messaging.”

Kestra Financial also views its fintech as a differentiator, says Mark Schoenbeck, the firm’s executive vice president and national sales manager. “We partner with the best-of-breed firms that can do things more efficiently for the advisor,” Schoenbeck says. “We differentiate ourselves by how we integrate the platforms for the advisors. We have the advantage of scale for negotiating with vendors that the individual advisor would not have.”

Kestra uses the well-known Redtail CRM platform and eMoney Advisor to move funds. It has just added compliant texting and is adding compliant e-signature. The firm also recently upgraded its cybersecurity.

“When an advisor has a prospect in the office, he or she needs to use the best-of-breed technology to see where the client is and where he or she wants to go. Once the client is signed and the money moved, the advisor has to service that client with the best technology,” Schoenbeck adds.

There are pros and cons to either building in-house technology or buying from vendors, says Joel Bruckenstein, a fintech consultant, owner of Technology Tools for Today, and a writer for Financial Advisor.

“IBDs have been playing catch-up with technology for the last couple of years,” Bruckenstein says. “They want to differentiate themselves, and if they are building in-house it takes longer. But if the advisors are buying and the vendor does not have what they want, they have to do without. Investing in technology involves a substantial amount of money.”

Something you will see in 2019 is voice recognition platforms. These will allow advisors to provide better and faster service.

Technology, no matter how it is done, is expensive. Although Ladenburg Thalmann, a publicly traded, diversified financial services company based in Miami, does not talk specifically about budget numbers, it is spending more in the next two years than ever before to keep the independent advisory and brokerage firms under its umbrella up to date. Ladenburg’s subsidiaries include Securities America in Omaha; Triad Advisors in Atlanta; Investacorp in Miami; Securities Service Network in Knoxville, Tenn.; and KMS Financial Services in Seattle.

While the B-D network develops some technology on its own, the firm’s overarching policy is to buy rather than build, says Doreen Griffith, senior vice president and chief information officer at Ladenburg. “With the pace of new technology advances, it is hard to think any one firm can keep up. We work with strategic partners that can make us nimble.”

For in-house technology, she says, “We look at each piece of technology and ask, ‘Do we want to be in this business?’ Then we look at affordability. Those are our criteria.”

To develop new programs and integrate programs, Ladenburg has created Enterprise Innovation and the Ladenburg Innovation Lab, explains Adam Malamed, executive vice president and chief operating officer. “This has been something we have focused on for the last four years because we recognized a need for innovation in technology in the marketplace.”

Dan Sachar joined the firm last January as vice president for Enterprise Innovation and was assigned to run the Ladenburg Innovation Lab. “The lab is looking at where we want to be five or 10 years from now for technology,” Sachar says. For instance, Ladenburg is working with Track Technologies, a payroll system for independent workers, through its Enterprise Innovation program. “This is a trend. Forty-seven percent of millennials freelance all or part of the time. This is something advisors will need to pick up on to be able to serve these clients. New managed account and retirement platforms are also in the pipeline.

“Advisors may not know what would help them until they see it,” he says. “At the lab, we look further ahead for them and we look for these products.”

Some firms such as Charles Schwab & Co. are reaching out to advisors to help them adopt technology platforms. Schwab sponsors one-day seminars for advisors across the country.

“Technology is a driving force behind the sustainable growth of the independent advice industry,” says Andrew Salesky, senior vice president and head of digital advisor solutions for Charles Schwab. “We are seeing independent firms realize the benefits technology can offer as they make strategic investments and thoughtfully implement the wide array of solutions available to them.”

Schwab Advisor Services in September announced the upcoming rollout of its Digital Account Open tool, which will be provided later this year in conjunction with Orion Advisor Services, a portfolio management and reporting provider, and made available through Schwab OpenView Gateway. The tool, now available to institutional advisors, replaces paper forms with digital forms for account opening and ancillary transactions, which creates efficiencies for advisors and their end clients, Schwab says.

Some firms market themselves primarily as fintech companies with broker-dealer and RIA platforms included. Chalice Wealth Partners in San Diego is such a firm, according to Christopher Giles, president of Chalice Financial Technology. Most advisors affiliating with Chalice do so for the fintech offerings, which are aggregated from tech vendors and all accessible through a single sign-on platform, he says.

“We want to help advisors make their technology decisions, especially if they are in the $50 million to $250 million AUM range,” Giles says. “Some advisors try to bite off more than they can handle for fintech. We help them put together a plan and set priorities.”

Broker-dealers use companies such as Advicent, a software company in Milwaukee that provides an advisor-facing tool known as NaviPlan.

“It is critical for the broker-dealer to be able to offer advisors the most efficient software,” says Tom Burmeister, director of financial planning at Advicent. “A lot of advisors and teams are switching broker-dealers, and technology is a driving factor in those switches. Anything that broker-dealers can offer advisors to eliminate the barriers for advisors to talk to clients is critical.”

“We get feedback from broker-dealers on what their advisors need,” he adds.

LPL Financial is integrating its digital platform, ClientWorks, with partners to optimize the service. It was announced in July that ClientWorks would integrate Riskalyze’s risk scoring software to provide advisors with improved account synchronization and monitoring capabilities. The program will provide a seamless data flow from LPL to Riskalyze, giving advisors the ability to link client accounts with corresponding client profiles.

It was also announced in July that LPL Financial would integrate its digital programs with Morningstar Office and Black Diamond’s performance reporting solution.

LPL’s Guided Wealth Portfolios platform, first unveiled a little more than a year ago, has grown faster than any other LPL platform, and had 1,500 advisors using it by July of this year. The platform was recently enhanced to update the landing page, the investor on-boarding experience and the advisor dashboards, along with additional capacity that enables advisor teams to collaborate within the platform, LPL says.

Advisor Group, a large broker-dealer network based in Phoenix that includes FSC Securities in Atlanta; Royal Alliance in Jersey City, N.J.; SagePoint Financial in Phoenix; and Woodbury Financial in Oakdale, Minn., also enhances in-house systems with strategic partnerships.

“Our goal is to provide digital solutions that differentiate our four broker-dealers,” says Ed Obuchowski, chief technology officer for the Advisor Group, who joined the firm earlier this year. “We build platforms in-house, but we also integrate digital solutions. There is a tremendous amount of innovation in the market. We have tried to reach a balance between building and buying.”

Advisor Group uses eQuipt asset management software and integrates it with the firm’s internal programs. It also integrates Morningstar Advisor Workstation, a web-based investment planning platform that has capabilities for research, portfolio analysis, goal planning and sales presentations.

Advisor Group recently launched two programs, MyCMO and My Succession Plan, to give advisors more access to digital marketing material, among other things, and succession planning software.

“The world is changing dramatically for the end client,” Obuchowksi says. “Advisor Group has a tremendous opportunity to deliver the right digital technology to clients, but that will not supplant the human relationship. Digitally, we will continue our advancements to reduce wasted time for advisors. The advisors who are doing well are the ones who evolve with the technology.”