LPL Financial
Technology was a major focus at the recently concluded LPL Financial Focus conference. Multiple LPL executives emphasized that the velocity of technology change is increasing. This creates disruptions, but it also creates opportunities for those who are prepared. LPL has been investing heavily in technology, and according to CEO and Chairman Mark Casady, the firm will continue to invest heavily in technology.
One pain point for LPL advisors in recent years has been client services. LPL has invested in technology to improve client service. For example, the company is leveraging technology to better manage the way it handles calls. A new request tracking tool allows advisors to track requests online to see where they are in the work flow. A new “move money” tool has automated the cashiering process, shortening processing time and delivering a superior client experience.
ClientWorks, LPL’s next generation advisor workstation, is now available to more than 11,000 advisors. Although it still lacks a few features necessary to allow LPL to retire BranchNet (the predecessor to ClientWorks), most functionality, with the exception of trading, is now available in the superior ClientWorks platform. This includes:
• Enhanced client management, with superior sorting and filtering capabilities
• A more robust alert and notification engine
• The request tracking tool
• The “move money” tool
• A resource center, the central information hub for market research, forms, production information news, business resources and more.
More enhancements are due for ClientWorks soon. These give advisors the ability to integrate Salesforce CRM and Redtail CRM into ClientWorks. Advisors will also have a new digital account opening process and a new practice management dashboard with impressive business analytics capabilities. For example, advisors will have access to a practice summary including data such as a service level summary, a list of top relationships, top accounts and other key metrics. Advisors will be able to set annual revenue and AUM goals for clients, then track progress toward those goals. They will be able to gauge their technology adoption to see how fully they are taking advantage of the technologies LPL offers.
LPL’s new digital advice solution, Guided Wealth Portfolios, powered by FutureAdvisor, garnered a great deal of advisor interest. The platform, now in the pilot stage, has a platform charge of 35 basis points. The proprietary risk assessment tool and model investment portfolios are created by LPL. According to LPL, the typical model portfolio, which employs low cost ETFs from three providers, should have underlying ETF investment fees of approximately 15 basis points.
The Guided Wealth Portfolios offer a number of attributes that should make them attractive to LPL advisors. These include:
• Compliance-approved marketing materials
• The ability to seamlessly transfer clients to another LPL investment program if their needs change
• Full integration with ClientWorks, the LPL advisor workstation
• Automated annual client check-ins that are captured and saved for compliance purposes
• The ability to accept ACATS transfers to fund accounts (most direct-to-consumer platforms only accept cash)
LPL is rolling out a new alternative investment platform. Currently, the processing for alternative investment applications is all manual. There is a nine-page LPL form that must be filled out, plus a sponsor document that can often be even longer. Given the length and complexity of these applications, approximately 40% are not in good order and LPL must reject these documents, frustrating advisors and clients alike.
The new platform is digital and validates the data as it is entered. It also automates what were previously manual calculations by the advisor, which often led to application problems. If data is missing or incorrect, the system will alert the advisor. It will not allow the advisor to print out the documents or process them until all the relevant information is supplied and validated. This should substantially reduce application problems and speed processing by LPL. The initial data indicates that the processing of alternative investment applications by LPL is being reduced from approximately 9.5 business days to 1.5.
Lincoln Financial Group
According to David Berkowitz, president of the Lincoln Financial Network at Lincoln Financial Group, his firm continues to execute on its multi-year “Advice Next” initiative. The initiative has two main goals: 1) to increase and drive productivity, and 2) in the latter stage, to drive collaboration. The Advice Next Gateway, Lincoln’s integrated advisor portal, leverages the cloud, bringing together 40 critical applications and tools. To cite just one example, Lincoln identified three CRM applications, Ebix, Redtail and Skience (a customized version of Salesforce). It then deeply integrated these three CRM applications into the advisor platform.
As previously announced, Lincoln is consolidating all its clearing business with National Financial, a Fidelity company. This will allow Lincoln to integrate its advisor platform with the National Financial platform.
Lincoln is enhancing its managed accounts platform in a meaningful way. It will offer an integrated and highly automated system that includes proposal generation, investment policy statements, a more effective method of communicating risk to clients, analysis, implementation and a more user-friendly client experience.
Rather than building, much of Lincoln’s technology strategy revolves around using its size and buying power to capitalize on the expertise of its providers. In the case of the managed account platform, it means Lincoln will negotiate with provider Envestnet to customize its platform to specifications and create a direct link between Lincoln and Envestnet rather than having to interface through the National Financial platform.
In 2015, Lincoln began deploying technology consultants into the field to visit advisors and help them optimize their use of technology. This effort has been significantly expanded in 2017.
In 2017, Lincoln plans to further leverage mobile technology. It also plans to enhance its planning tools. Today, the firm prides itself on its comprehensive approach to financial planning. Berkowitz emphasizes that his firm is very strong in the estate planning and retirement income distribution areas. Currently, the firm relies primarily on a proprietary tool, while some of the firm’s advisors use eMoney for financial planning. Although he was hesitant to provide details, Berkowitz says his firm plans to leverage its relationship with Fidelity and eMoney as part of the planning tool upgrade. We take this to mean that Fidelity and eMoney will be providing a customized, integrated version of Wealthscape and eMoney to Lincoln sometime in 2017.
It seems clear that all of the independent broker-dealers surveyed are committing significant resources to enhancing the technology that they provide to their advisors. Margin compression, operational inefficiencies within advisory firms and rising client expectations require more productive advisor tools and a better, more digital client experience. Luckily for advisors at these broker-dealers, the firms are working hard to deliver the tools they need.