Executive Summary
Last week, the 9th annual Technology Tools for Today (T3) conference was underway at the Anaheim Hilton, at the doorstep of the Anaheim Convention Center and Disneyland. This year’s event was the largest ever, slightly edging out last year’s total with nearly 600 attendees, including both advisors themselves, and a wide range of advisor tech companies and their representatives.
As the conference continues to grow, T3 is increasingly the conference for advisor tech companies to be seen at; several players timed key announcements to the conference, from a big integration announcement by SEI, to Pershing’s new NetXInvestor platform, to a new account aggregation dashboard offering from MoneyGuidePro. In addition, numerous brand new advisor tech software companies revealed their software debuts at the conference, from a Personal Financial Management (PFM) tool, to a new simple web-based advisor CRM, and more. This year's T3 event also featured a new "FAStech Cup" advisor tech competition for up-and-coming tech-savvy financial planning students, a strategic shift that means in the future the T3 conference may not only be a location for advisor tech tools but also new hires who know how to use them!
Overall, the mood of the conference was very upbeat, notwithstanding some internet problems at the beginning and a looming east-coast snowstorm at the end that led many attendees to depart a few hours early. As virtually all major software tools have now transitioned to the cloud, and the number of integrations continues to proliferate, this year’s T3 conference seemed to mark a turning point where the challenge of advisor technology decisions is less and less about finding software at all, and increasingly about the difficulty of navigating a complex patchwork of integrations and choosing from an ever-wider array of potential solutions!
Attendees, New Initiatives And Speed Bumps
One of the notable things about the T3 conference is that it appeals not only vendor wholesalers who want to reach advisors, but also their leadership and key decision-makers (as many business partnership, integrations, and even mergers emerge from meetings that happen in-person at T3), and this year’s conference didn’t disappoint in its access to company CEOs and CTOs, in addition to the usual advisor crowd.
One new group on site at this year’s T3 conference were students, with the launch of the new “FAStech Cup”, a competition sponsored by several popular advisor technology platforms that put forth “challenges” for students to learn key advisor technology tools. Competition for the FAStech cup included showcasing a hypothetical financial plan (built using MoneyGuidePro software), and delivering it via recorded video conference, as well as building hypothetical advisory firm websites, along with a Quiz Bowl of financial planning knowledge. The winners included Texas Tech in 3rd place, San Diego State in 2nd, and the students from William Patterson University were the grand prize winner (which included a $5,000 gift to the student program). Conference organizers Joel Bruckenstein and Dave Drucker committed at the end of the conference to renewing and growing the FAStech cup in the future… which means it may not be long before T3 is also a conference where advisors looking to hire an especially “tech-savvy” young financial planner go to find the best talent!
Notably, this year’s conference did have a few speed bumps. Attendance waned badly in the final half-day of the conference, as many east-coasters left early to get home before the monster snowstorm that was rolling up the east coast (yours-truly stayed to the bitter end, and as a result got stuck in Los Angeles for 2 extra days as all flights to the east coast were cancelled!). And ironically, the conference stumbled a bit out of the gate as despite having negotiated significant bandwidth for the event, when all the vendors loaded up their software tools for the pre-conference session and the exhibit hall setup, the hotel routers were so overwhelmed they went offline altogether, forcing most of the exhibit hall time at the opening reception to be spent with advisors and their tech vendors actually talking to each other face to face without the assistance of computers (oh, the horror!). Fortunately, the internet was fully functional again by the 2nd morning (the actual conference kick-off), and notwithstanding the pre-conference internet snafu and the weather-challenged wrap-up, this year’s T3 conference was still a strong event as always.
New Software And Big Announcements
The T3 conference has increasingly become the place that technology companies serving advisors make their big announcements, and this year didn’t disappoint. A wide array of press releases went out throughout the conference and were announced from the podium, including a big 4-way SEI Advisor Network integration deal with Redtail, MoneyGuidePro, and ActiFi, along with Pershing launching the next generation of its online platform with NetXInvestor, a new version of Envestnet | Tamarac's Advisor Xi platform, and most notably an announcement by MoneyGuidePro CEO and founder Bob Curtis that the popular MGP financial planning software will be partnering with account aggregation provider Yodlee to offer an aggregation and client dashboard tool directly to advisors, delivered for an “at-cost” price point of only $495/year (discounted to $365 or $1/day for T3 attendees!) that seemed targeted directly at the popular-but-pricey eMoney Advisor financial planning software (notably, eMoney was conspicuously absent from the conference).
In addition to announcements of new features for several major technology players, this year’s T3 conference also included the launch announcements of several new companies that debuted their software to advisors for the first time ever at the conference. Notables included a new portfolio risk analytics tool called RiXtrema (a new competitor to Hidden Levers and Macro Risk Analytics), a new retirement planning software tool called RetireUp, an account aggregation and “personal financial management” (PFM) dashboard called WealthAccess (though their launch was somewhat overshadowed by the MoneyGuidePro announcement), and the new web-based “simple” advisor CRM offering WealthBox.
Advisor Technology Cloud Transition
One notable trend that was highly evident at this year’s T3 conference is that, truly, transitioning advisor software to the cloud is no longer of question of “if” it’s right to go to the cloud but simply a question of “which” web-based platform is the right one to choose.
At the conference, Advicent (formerly Zywave, owner of NaviPlan and Financial Profiles) showed off its new fully-cloud-based NaviPro tool, and MoneyTree software demoed its new Total Online software suite, which means all major financial planning software tools have now been fully transitioned to the cloud. Similarly, Junxure was there to show off its new cloud-based CRM offering (the last of the major advisor CRM tools to make the transition, though a few legacy providers like ACT are still operated via local server installations), and TD Ameritrade reiterated that its full web-based iRebal tool will be available in just a few more months.
Overall, advisors now have a wide range of web-based tools to run every aspect of their business. The largest ‘legacy’ tools still running on servers include portfolio management and reporting software Advent (though its users appear to slowly be transitioning to its Black Diamond option), and PortfolioCenter (though Schwab announced last fall is being rebuilt entirely on a web-based platform and is due out in 2015 as "Project PM"). On the other hand, for advisory firms that are more anxious to get out of the business of being responsible for this software altogether, sooner rather than later, integrated platforms from Envestnet’s Advisor Xi to Orion Advisor Services were also present in full force.
Other Notable Buzz
As virtually all the major advisor software tools are now online, the clear trend emerging from the T3 conference was that software providers and the investment custodians are now working hard to truly integrate and automate workflows more deeply, and make them more functional from mobile devices.
During the RIA custodian panel – which in recognition of the T3 conference’s clout notably included leaders from all four of the major platforms, Schwab, Fidelity, TD Ameritrade, and Pershing Advisor Solutions – the discussion focused on custodian efforts for everything from e-signatures and digital paperwork to mobile check deposit for advisors and their clients, and eventually “straight-through processing” (where an account might be fully opened and funded via a mobile device, with all the intermediate steps of paperwork and deposits/transfers handled digitally in a single-step process). On the other hand, in an increasingly virtual world, the custodians also fully acknowledged the rising challenge of identity theft and wire fraud, and noted that the major custodians are actually sharing information about identity theft attempts in an effort to maintain better security for all advisors. As Schwab Advisor Services' technology guru Neesha Hathi pointed out, “anti-fraud efforts are not something we want to differentiate on” and instead emphasized the importance of collaborative efforts to maintain investor trust of the financial services industry in the aggregate.
Another notable trend at T3 was the growing range of “middleware” providers were present at the T3 event as well. The middleware name is a label given to the software tools that are designed to sit in between or on top of existing software – most commonly a CRM tool – to help ensure that the tools work well together. This year’s offerings included several middleware providers for Salesforce in particular (including the Athene Group’s “Skience”, Concenter Services' XLR8, Orchestrate's Process Composer, and AppCrown) along with the debut of the Fox Planning Network’s “Genesis Smartware” workflow automation software.
Amusingly, while T3 is a (human) advisor technology conference, at one point during the opening general sessions as “robo-advisor” made an appearance, courtesy of MoneyGuidePro. Dressed in full robotic costume and with a robotic voice modulator, the “robo-advisor” expressed its intent to replace financial advisors, noting that "You can call me at 3AM. I am Robo Advisor. I never sleep. I will manage your money."
Bob Curtis introduces a real "live" robo-advisor at #T32014! pic.twitter.com/3VNlwNJADA
— MichaelKitces (@MichaelKitces) February 11, 2014
Mocking the narrow focus of robo-advisors, though, the robotic voice struggled to answer any of the more complex and nuanced questions that were thrown at it by MGP CEO Bob Curtis, instead falling back to repeating its “I am Robo Advisor. I never sleep. I will manage your money. You can call me at 3AM” mantra, and then being overshadowed by a second robo-advisor meant to signify IBM’s Watson, which is being deployed as a business intelligence tool to help financial advisors serve consumers better.
Overall, there seemed to be little concern regarding “robo-advisors” at the conference, and while the T3 conference draws an admittedly technology-optimistic group, an audience poll in the opening session found that approximately 98% of the attendees viewed the ongoing evolution of advisor technology to be an opportunity more than a threat.
Overall T3 Takeaways
In the end, the clear takeaway from the T3 conference is that there’s clearly growth underway in the tools coming available online to serve advisors. In fact, ironically the increasingly common technology challenge now appears to be less about finding software in the key functional areas (CRM, financial planning, and portfolio reporting) and more about figuring out which software to choose, navigating what is both a dizzying array of features for many of the largest providers, and also a proliferating (but not universal) number of integrations. Ultimately, the hope is that a series of consistent “data standards” will emerge that will make software integrations more consistent and universal; as was evident from the T3 conference, though, “integrations” are right now just a massive patchwork of “point-to-point” connections that each company builds with each other company one at a time. As the number of software providers grows, the number of integration combinations become exponentially (and eventually, unmanageably) large. For the time being, though, integrations are still happening one at a time, and though many of the “major” software tools have a wide list of integrations, and several middleware providers are further facilitating the process, advisors may have some trade-off decisions to make about how important it is for certain software to integrate with others.
In fact, in one session about growing an advisory firm that effectively leverages these technology tools, Abacus Wealth President J.D. Bruce suggested that the only real way to cut through the choices is to identify the 1-2 software tools that are “most” central to your practice and way of doing business, and then build around them. For instance, Bruce indicated that for his practice, the two core tools are Salesforce for CRM and iRebal for portfolio management, and as a result any portfolio reporting software would have to work with those; as a result, the decision became “easy” and Orion Advisor Services was the “clear” solution (as it integrates with both), but only because he’d already figured out which software would be a deal-killer if the new solution couldn’t work with them.
Overall, the broad theme of technology at the T3 conference was perhaps summarized best by Victor Fetter, Chief Information Officer for LPL, who delivered one of the conference’s keynote sessions about advisor technology trends. Fetter noted that ultimately, the four big tech trends are the cloud, mobile, social, and business intelligence (“big data”) solutions. At this year’s conference, the focus was primarily on the cloud with a touch of mobile and social (though notably, Advisor Websites was the only website provider present and there were no social media compliance tools represented!), but it’s clear that these themes will be guiding advisor technology in the coming year(s) as well (though no provider seems to have fully demonstrated where value will be created from “big data” business intelligence… yet?).
The bottom line, though, is that the T3 advisor tech conference continues to grow, both as a location for advisors to find technology solutions, for technology providers to connect (and integrate), and where the industry media gather to cover many of the biggest advisor technology announcements and company debuts. For this year, the T3 conference had already been on my list of the “Top Conferences for Financial Advisors”, and it will definitely be back on the list for 2015. If you’re interested, be certain to Save the Date now: February 12th – 14th at the Hilton Anatole in Dallas, Texas!
Mike,
Did you find it at all frustrating that the custodians seemed more intent on showing their altruism rather than competitive differences? I’d be more impressed if their public and private personae were in synch.
Brooke
Brooke,
Yeah, I was a little let down by the custodian panel. I was hoping for more articulation and clarity of differentiation. I’ll give Joel credit – he really did try to pull it out of them. They just didn’t want to budge much. :/
Not that it was a ‘bad’ panel, but yeah I was hoping for more. I still give Joel and Dave FULL credit for getting them there in the first place, and hopefully we’ll see them open up a little more in the future! 🙂
– Michael