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.”