Standing Out From The Crowd – How Technology Impacts A Firm’s Ability to Achieve Success

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Technology is proving to be one of the key differentiators among financial services firms – distinguishing those firms who excel from those which merely exist. The impact of technology is vast, and influences everything from advisor education and resource management, to client engagement, and successful investment management. Those firms on the rise within the industry recognize this dynamic and have willingly invested in both the research and the implementation of technological solutions which further the efficiency of their advisors and teams while simultaneously solidifying client relationships. Just as striking are those firms on the opposite end of the spectrum whose unwillingness to embrace or allocate resources to technological advancement is creating a glaring chasm between their operational capabilities today and their firm ability to thrive – or in fact survive – in the future.

Consider first the use of technology by a firm to support their advisors and teams. Robust technology interfaces which include dynamic platforms with the ability to cross-manage across multiple advisory tasks; including among them record keeping, marketing, compliance, and operations, afford advisors the ability to more efficiently allocate their time, lead their business, and oversee their client assets. Further, the most sophisticated among these platforms provide a wealth of education, offering business insights and resources to advisors that go beyond the basics of financial practice management and include tools to assist advisors in successfully branding, marketing, and growing their practice within the supportive construct of the overall firm culture.

One of the best industry examples of this type of thought-leadership when it comes to engaging and supporting advisors through technology can be seen in the technology solutions offered by Raymond James. As an active and vocal proponent of technology as an essential growth factor for operational success, Raymond James invests heavily in technology in order to provide cutting-edge solutions which streamline an advisor’s operational tasks while in tandem bolstering overall firm success through efficient client asset management. For instance, in 2017 alone Raymond James invested $250 million in their in-house technology solutions. Further, they have employed a team of more than 1,000 IT Solutions professionals whose responsibility is to insure the consistency and functionality of the Raymond James technology platforms while keeping an eye toward further innovation. The results of these efforts has paid off, as Raymond James Chairman and CEO Paul Reilly recently stated conveying the company’s technology has created a scalability through which it is poised to support its growing number of advisors and client assets.

Another firm with an eye toward technologic innovation is LPL Financial who ClientWorks platform has long been seen as the gold standard in robust advisory support and client relationship management efficiency. Just this week, LPL Financial progressed one step further and broke new technology ground when they announced their most recent ClientWorks innovation – an account opening and proposal generation tool which will make client prospecting and on-boarding a more streamlined and successful process for advisors within the LPL fold. Additionally, more technology advancements from LPL are on the way as the firm is working towards the automation of six primary advisory tasks – a process which the firm most recently reported is approximately 80% complete.

For every technology leader; however, there is a technology dinosaur and within the financial services industry the wirehouse space has proven to be the land of tomorrow when it comes to technology. Wirehouses have leveraged their growth on a by-gone era mentality where big bank names and collective assets under management are the triggers used to retain advisors and impress client prospects. With the downfall of many a wirehouse reputation in recent years, often due to disengagement between the C-Suite and advisors and the flat out mismanagement of client assets, it has become increasingly difficult for wirehouses to tout the same story line while ignoring technology and other drivers powering the financial services machine of today. Subsequently, in an effort to keep pace, some wirehouses are employing one of the oldest tricks in their playbook – the ‘if you can’t do it, buy it’ strategy.

The most recent example of a wirehouse attempting this growth through acquisition strategy can be seen in the $13 billion dollar Morgan Stanley purchase of E-trade. a topic which I discuss in detail in a special Hot Mic Episode of my podcast ‘Advisor Talk With Frank LaRosa’. While on the surface Morgan is using the deal as an illustration of its undying respect of the RIA space, most industry experts – myself included – can see through the looking glass to the real motivating factors. These include a strategic move by Morgan to go after the mass affluent, through what is essentially a purchase of client deposits, while shoring up any technology weakness as the E-trade acquisition will most certainly enhance Morgan’s digital capabilities and expand their e-brokerage business significantly.

There are turning points in all industries which prove to be a deciding factor in who the key players will be in the years to come. In financial services, we are on the edge of just such an ice-age now, where those firms who choose to hold on to the past ways of using technology within their operations will be frozen out of the growth potential the future affords. It will be those leaders who pivot, remain vigilant in their technological innovations, and use those advancements to foster even greater advisor and client engagement who will become the financial services firms of tomorrow and most certainly shape the destiny of our industry for decades to come.

Frank LaRosa
President/CEO
Senior Business and Transition Consultant
ELITE Consulting Partners
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