Nerd's Eye View Articles On Technology & Advisor FinTech

The Latest In Financial #AdvisorTech (February 2024)

February 5, 2024 07:01 am 0 Comments CATEGORY: Technology & Advisor FinTech

Welcome to the February 2024 issue of the Latest News in Financial #AdvisorTech – where we look at the big news, announcements, and underlying trends and developments that are emerging in the world of technology solutions for financial advisors!

This month's edition kicks off with the news that financial planning software platform RightCapital has launched a workflow management tool called RightFlows to help advisors manage and assign steps in the financial planning process to team members and clients – which on the one hand capitalizes on advisor demand for workflow solutions tailored to the financial planning process without using a separate third-party tool, but on the other hand raises questions about how many different workflow support tools advisors will want to manage, given that many already use workflows within their CRM software (and other individual software tools may follow RightCapital's lead by offering their own embedded workflows).

From there, the latest highlights also feature a number of other interesting advisor technology announcements, including:

Dispatch (formerly OneAdvisory) recently raised $8 million in seed funding as it seeks to provide a centralized data warehousing solution for advisory firms and eliminate the need for point-to-point data integrations between individual software solutions – which although a relatively new category for AdvisorTech, seems poised to pick up steam as advisors increasingly seek better integration among their constantly-expanding tech stacks
Flourish has launched a new annuities platform, aiming to not only provide a marketplace of fee-based annuities for fiduciary RIAs but also to solve for the operational challenges of implementing annuities (and their notoriously burdensome paperwork) through streamlining and automation of the application process
Estate planning software provider Vanilla has announced a partnership with Vanguard's Ultra-High-Net-Worth (UHNW)-focused Personal Advisors Wealth Management, as Vanguard seeks to improve its estate planning offerings to better compete with other UHNW-focused firms and shows that the market for estate planning technology remains strong even as fewer and fewer people are actually subject to estate tax

Read the analysis about these announcements in this month's column, and a discussion of more trends in advisor technology, including:

Income Lab has released Life Hub, its holistic "financial dashboard" tool, as a standalone software offering where it will compete with Asset-Map – which underscores the growing popularity of tools that can clearly visualize a client's current financial situation, while highlighting how different software companies have approached the question of whether to split off popular features as their own standalone solutions or to leave them "bundled" with their other offerings
At the annual T3 Technology Conference, Artificial Intelligence (AI)-related vendors were present, but overall the tone towards AI was more measured than expected given the hype surrounding AI over the past year – suggesting that even though AI may prove transformative for AdvisorTech in the long run, it has a long road ahead for gaining trust and adoption in the advisory industry

And be certain to read to the end, where we have provided an update to our popular "Financial AdvisorTech Solutions Map" (and also added the changes to our AdvisorTech Directory) as well!

*And for #AdvisorTech companies who want to submit their tech announcements for consideration in future issues, please submit to [email protected]!

Advisors Are Becoming Better (Not “Faster”) With Advances In #AdvisorTech

January 29, 2024 07:04 am 0 Comments CATEGORY: Technology & Advisor FinTech

For financial advisors, the promise of technology has always been to help advisors better leverage their time to grow their business. One possible way to do this is to use the time savings of technology to serve a higher number of clients. However, another approach advisors can take is to use their technology to do more – and better – work for the same number of clients while earning higher fees for the higher-value services they provide.

In the last 10 years, coinciding with the rise of robo-advisor technology that makes it possible to streamline and automate much of the process of investment management, advisors have leveraged the decreasing amount of time it takes to manage client portfolios by providing more and deeper planning for their clients – highlighted by the fact that, while the number of clients served by each professional at an advisory firm has actually decreased over that time, revenue earned per client has actually increased by 72%, either due to advisors increasing their fee schedules or using the same AUM fee schedule but working with more affluent clients with larger account balances (and therefore pay higher fees).

In more recent years, however, entrepreneurial software providers have picked up on advisors' demand for tools that help them broaden and deepen their planning beyond even what traditional comprehensive planning software can do. And so there has been an explosion of new tools in the AdvisorTech landscape that are not about saving time on advisors’ existing processes, but instead are geared towards adding new functions that advisors don’t already do, such as providing more in-depth and specialized planning capabilities, and engaging clients more proactively throughout the year rather than centering around 1 or 2 review meetings.

As a result, there is now a plethora of tools to choose from for advisors who want to enhance the value they provide to their clients – so much so, in fact, that there are now more of these solutions than one advisor could possibly use. Which means the challenge for advisors is not necessarily in finding new ways to improve their planning services, but in deciding which approach will deliver the most value (and which of the ever-growing number of tools available will best support it) for the cost in time and dollars that it requires.

The key point is that by digging deep into how they want to provide value for their clients, advisors can choose how to get the most out of their technology. This is particularly important at a time when most advisors are bombarded with pitches for new tools that often promise the world in terms of the features they deliver. By viewing the decision through the lens of the client’s needs and wants, advisors can have an easier time deciding which tools can best enhance their work – because ultimately, each new solution on the market is just a tool to support the advisor's 'real' work of creating a great planning experience for their clients.

Designing “Custom GPTs” With Advanced ChatGPT Features To Enhance Advisor Capabilities With AI

January 17, 2024 07:02 am 0 Comments CATEGORY: Technology & Advisor FinTech

In late 2022, OpenAI launched ChatGPT, an Artificial Intelligence (AI) driven, natural-language processing tool that offered the public the ability to conduct seemingly human conversations with a chatbot and generate a seemingly endless array of sophisticated content, including essays, emails, computer code, meal plans, fictional stories, and song lyrics, to name just a few. ChatGPT's introduction set off a wide-ranging public debate around both the transformative power of AI as well as the potential (and largely unpredictable) threats it may pose. While it could be decades before we know those answers, at the moment, professionals across every industry, including financial advice, are working to learn how they can leverage this new and remarkable tool to make their practices more efficient.

In this guest post, David Ortiz, the Managing Partner at the Financial Chef, shares his personal journey around how he gained a practical understanding of some advanced ChatGPT features, how he customized it to generate responses specifically tailored to the needs of financial advisors, and how he's implemented those and other AI-driven tools in his business.

With a background as a software executive, David was drawn to the potential of ChatGPT, prompting him to learn how he could use it to enhance his capabilities as an advisor. After delving into instructional content on YouTube University, he decided that the ideal use for AI in his practice was to improve the processes around client meetings, including generating summaries, extracting pertinent data, creating action items, and staying compliant.

By learning to design "custom GPTs" to create individual bots that could perform specific tasks, David created (and has made publicly available) an advisor-focused tool he calls the "Client Meeting Summarizer", which processes advisor/client meeting transcripts to gather, summarize, and organize key information from any meeting or call through various AI prompts. One of his most used prompts processes discovery meeting transcripts and allows users to gather, summarize, and organize key information, including demographic data, topics discussed, key points, action items, and next steps. Another is designed to extract information from data gathering and financial planning meeting transcripts for easy entry into financial planning software and also to summarize key points and action steps. A 3rd prompt reviews annual review meeting transcripts, capturing client quotes from key review areas, which can then be fed to a CRM. Finally, a 4th prompt reviews transcripts from the perspective of a compliance officer to ensure that David and his team adhere to regulatory standards and their own internal policies.

Additionally, AI tools have allowed David to transform what were once monologue-based planning meetings into interactive, engaging dialogues. By using a mindmap plugin, David and his team create high-level visuals that give clients a clear understanding of how their financial plans were constructed, how their specific issues are being addressed, and the value that David is delivering on an ongoing basis.

Ultimately, David has found that integrating AI into his practice has not only helped him become more efficient, but has also allowed him to ask better questions, gain a deeper understanding of his clients' needs, and hone his own listening skills. The net result has been higher client satisfaction and engagement, better-tailored plans that address each client's unique goals, and greater overall efficiency in his team's planning process. For David, the real promise of AI is in allowing financial advicers to foster deeper and more meaningful relationships with their clients, helping them be better (and more successful) at their craft!

The Latest In Financial #AdvisorTech (January 2024)

January 1, 2024 07:03 am 0 Comments CATEGORY: Technology & Advisor FinTech

Welcome to the January 2024 issue of the Latest News in Financial #AdvisorTech – where we look at the big news, announcements, and underlying trends and developments that are emerging in the world of technology solutions for financial advisors!

This month's edition kicks off with the news that held-away asset management platform Pontera has raised $60 million in venture capital funding as advisors increasingly seek to directly manage clients' 401(k) and other outside assets – although claims by Washington state regulators that advisors' use of Pontera may violate state regulations on accessing data with client passwords, and/or employer retirement plans' terms of service, raises questions over whether Pontera (and the advisors who use it) can convince regulators that its underlying model doesn't violate client privacy.

From there, the latest highlights also feature a number of other interesting advisor technology announcements, including:

JPMorgan has announced plans to shut down its robo-advisor offering after just four years, highlighting broadly the challenges of robo-advisors to overcome the challenging economics of acquiring and serving small clients, and in particular showing that even a company like JPMorgan with a large customer base can struggle to distribute its offerings when those offerings don't match the needs or wants of its (largely banking-focused) customers
Envestnet is rumored to be exploring a sale of account aggregation provider Yodlee, which highlights the struggles that account aggregation has had in living up to its original promise to provide holistic insights into client data – in large part because it has been such a challenge to maintain the integrity of the data itself, leaving little capacity to figure out how to convert that data into meaningful insights for advisors
Income Lab has announced that it has chosen BridgeFT to provide it with API access to multi-custodian data for its retirement planning software, signaling more broadly the need for API hubs that can allow technology startups to access custodial data without the cumbersome process of building and maintaining connections with individual custodians – a need that BridgeFT has risen to fill with its WealthTech API solution.

Read the analysis about these announcements in this month's column, and a discussion of more trends in advisor technology, including:

Arch, a technology provider aiming to streamline the significant administrative and paperwork burden of managing multiple alternative investments, has completed a $20 million Series A funding round as advisors' interest in alternatives continues to grow (though it remains to be seen if investor interest in alternatives will stay as high in a higher interest rate environment)
The SEC has been soliciting feedback from RIAs on their use of AI technology as it seeks to finalize its proposed "Predictive Data Analytics" rule, which has been widely criticized as imposing an onerous compliance burden on firms surrounding the technology they use (even if that technology has little to do with AI to begin with)

And be certain to read to the end, where we have provided an update to our popular "Financial AdvisorTech Solutions Map" (and also added the changes to our AdvisorTech Directory) as well!

*And for #AdvisorTech companies who want to submit their tech announcements for consideration in future issues, please submit to [email protected]!

The Latest In Financial #AdvisorTech (December 2023)

December 4, 2023 07:04 am 0 Comments CATEGORY: Technology & Advisor FinTech

Welcome to the December 2023 issue of the Latest News in Financial #AdvisorTech – where we look at the big news, announcements, and underlying trends and developments that are emerging in the world of technology solutions for financial advisors!

This month's edition kicks off with the news that Black Diamond has announced the launch of its own CRM system, targeting advisors at mid-size firms who have data complexity and workflow needs greater than what more basic CRM options can accommodate, but who don't yet need (and don't want to pay for) the Salesforce-based options – like Black Diamond's existing Salentica CRM software – that offer the most customizability.

From there, the latest highlights also feature a number of other interesting advisor technology announcements, including:

Nitrogen CEO Aaron Klein and TIFIN President Jack Swift have announced their departure from their respective firms, the latest in a wave of founder/CEO departures from AdvisorTech firms after a 7+ year cycle of rapid PE-funded growth – raising questions about whether investor demands for growth and profitability in AdvisorTech firms is realistic (or whether it places an undue burden on firms' employees and leadership) given the reality that advisors tend to be slow to adopt new technology in the first place.
Envestnet has announced a partnership with Empower to offer a turnkey 401(k) plan management solution for advisors with small business owner clients – but it isn't clear whether making 401(k) plan management 'easier' will actually convince more advisors to manage 401(k) plans, given how advisors have largely been averse to 401(k) plan management when it isn't a core part of their business
Elements, the financial health-focused tool for engaging prospects and clients, has announced a new RIA partnership model to serve clients who don't have enough assets to meet an advisor's minimums – but given the struggles of previous attempts to expand access to smaller clients, it isn't clear how the program will bring in enough small clients to create sustainable revenue (especially given that advisors generally aren't marketing themselves to small clients to begin with)

Read the analysis about these announcements in this month's column, and a discussion of more trends in advisor technology, including:

Digital marketing platform FMG has announced a new premium website design service, responding to the desire of financial advisors for a unique advisor-specific website to stand out to prospective clients for less than the cost of a custom-built site
As technology providers have struggled to achieve wide distribution among advisors who remain reluctant to change out their technology, an increasing number have turned to "tech-facilitated marketplace" (where the technology facilitates connections between buyers and sellers, and is 'free' for the advisor while taking a cut of the transaction) and "tech-enabled services" (where a service is provided in a technology wrapper to be less costly than a standalone service ) – which on one hand, creates more options for advisors to find solutions to meet their needs, but on the other, can create confusion about what the advisor is actually paying for (and whether they really need it)

And be certain to read to the end, where we have provided an update to our popular "Financial AdvisorTech Solutions Map" (and also added the changes to our AdvisorTech Directory) as well!

*And for #AdvisorTech companies who want to submit their tech announcements for consideration in future issues, please submit to [email protected]!

Advice Engagement Tools For A More Dynamic VIP (Visualization, Interaction, and Process) Planning Experience

November 29, 2023 07:01 am 0 Comments CATEGORY: Technology & Advisor FinTech

The traditional way that most financial planning has been offered was for an advisor to create "The Plan": a comprehensive document outlining a client's financial strategy that was delivered either on a one-time basis or updated annually. However, as the industry has shifted towards an ongoing relationship model, advisors have felt compelled to demonstrate consistent value to their clients throughout the year. The problem, however, is that a typical client's big-picture financial situation doesn't tend to change much from year to year, and the process of updating "The Plan" entails intensive document review and time-consuming data entry. Which means that updating a client's financial plan more frequently would offer little additional value to the client and would be very inefficient for the advisor.

As a result, tools have emerged that are designed to keep clients engaged in the financial planning process throughout the year, addressing the inefficiency and time burden of frequently updating the full financial plan itself. Recent Kitces Research on Advisor Technology indicates that while these newer Advice Engagement tools are not yet widely adopted among advisors (likely due at least in part to the newness of the category overall), most advisors who do use advice engagement software tend to like it – which in turn suggests that as more advisors become familiar with advice engagement tools, the rate of adoption will increase as advisors see the potential for a more dynamic ongoing financial planning process.

Broadly, advice engagement tools incorporate 3 key elements that enhance the process of financial planning: First, they use visualization tools to simplify complex and abstract financial planning concepts for clients. Second, they facilitate clear and organized communication between the advisor and client to ensure that important information is effectively conveyed. And third, advice engagement tools help clients understand where they stand in the financial planning process itself – and, most importantly, what comes next – to provide a clear roadmap and prepare the client for what lies ahead. The current tools in the Advice Engagement category vary in their use of Visualization, Interaction, and Process (VIP) elements, offering advisors the option to tailor the technology to the client experience that they desire.

Which means that for advisors considering adopting advice engagement technology, the process starts with deciding which engagement elements can do the most to enhance the advisor's existing financial planning. For many advisors, tools that help to define and navigate the planning process for clients can be the most valuable starting point, with interaction fostering more dynamic communication and visualization delivering information in an impactful, meaningful way.

Ultimately, as financial advice continues to steer away from static plans and towards a more dynamic planning relationship with clients, advisors will increasingly benefit from tools that can help them not only analyze and project financial data, but also deliver information to clients more effectively. Because as the increasing adoption and high satisfaction of advice engagement tools show, giving clients a "VIP" experience really does increase their engagement not only with the advisor, creating a deeper client-advisor relationship, but also with the financial planning process itself, making both client and advisor more successful in the long run!

The Latest In Financial #AdvisorTech (November 2023)

November 6, 2023 07:02 am 0 Comments CATEGORY: Technology & Advisor FinTech

Welcome to the November 2023 issue of the Latest News in Financial #AdvisorTech – where we look at the big news, announcements, and underlying trends and developments that are emerging in the world of technology solutions for financial advisors!

This month's edition kicks off with the news that Practice Intel has launched a new "growth platform" centered around quantifying the quality of an advisor's client relationships with an all-in "Relationship Quality Index" (RQI) – which while potentially valuable in helping advisors understand and improve their client experience (and subsequently improve client retention and boost the lifetime value of each client), also raises questions about whether advisors will be willing to invest in tools to improve their client experience given their already-high average client retention rates, as well as what really is the 'best' metric for measuring satisfaction in the first place, since other platforms also purport to quantify customer satisfaction (some of which are notably less costly than Practice Intel's suite of practice management tools).

From there, the latest highlights also feature a number of other interesting advisor technology announcements, including:

FinanceHQ has launched as a new digital lead generation platform for financial advisors, which takes a more niche-focused approach to matching prospective clients with advisors – representing a bet that capturing prospects seeking help for specific problems (whom it can then refer to an advisor specializing in that problem) will reduce the costs of bringing on new clients and help it grow and scale among a crowded market for lead generation services
Technology-focused RIA startup Farther has announced a $31 million Series B funding round at a whopping $131 million valuation – which while reflective of its rapid growth in assets and revenue in recent years, also raises questions about whether its innovative technology offering will really create enough value to fulfill its investors' expectations, or if it will need to instead focus on simply bringing in more advisors to justify its valuation
Fidelity has stopped giving 'screen-scraping' data aggregators access to its client information, requiring them instead to go through its sanctioned direct data feed – which, while done in the name of ensuring more stable data connections and better account security, also highlights the business opportunity for data platforms and institutions that own and provide access to client data

Read the analysis about these announcements in this month's column, and a discussion of more trends in advisor technology, including:

2 new AI-driven compliance technology solutions, Avery and Hadrius, have launched – which, on the one hand could represent a significant step forward in automating and streamlining the time-consuming, repeatable processes of following compliance procedures; but on the other, raises questions about whether AI technology itself is really ready yet for the highly technical, low-margin-for-error domain of compliance
Morgan Stanley has introduced a new AI tool for its 16,000 wealth management advisors, which notably doesn't give financial advice – but does create the potential to streamline advisor processes from investment research to meeting follow-ups and even possibly generating potential planning ideas.

And be certain to read to the end, where we have provided an update to our popular "Financial AdvisorTech Solutions Map" (and also added the changes to our AdvisorTech Directory) as well!

*And for #AdvisorTech companies who want to submit their tech announcements for consideration in future issues, please submit to [email protected]!

The Latest In Financial #AdvisorTech (October 2023)

October 2, 2023 07:02 am 0 Comments CATEGORY: Technology & Advisor FinTech

Welcome to the October 2023 issue of the Latest News in Financial #AdvisorTech – where we look at the big news, announcements, and underlying trends and developments that are emerging in the world of technology solutions for financial advisors!

This month's edition kicks off with the news that custodial platform Altruist is eliminating the $1 per account monthly fee for its portfolio management and reporting technology for advisors on its platform, which on the one hand suggests that the economies of scale Altruist has achieved in the wake of its move to become a fully self-clearing custodian have been such that it can now afford to 'give away' its software, while on the other hand serves as an ominous sign for standalone portfolio management technology platforms that they could stand to be disrupted if more custodial platforms decide to compete on their technology offerings and eliminate the need for advisors to pay $5,000-$10,000 each year for a separate provider.

From there, the latest highlights also feature a number of other interesting advisor technology announcements, including:

Holistiplan, after achieving success with its tax planning and analysis software, has announced an investment from Lead Edge Capital, signaling that it may be ready to expand into other financial planning areas beyond tax – but with a slew of new 'Holistiplan for X' startups in the marketplace, it may have a harder time repeating the exponential growth of its early years and as it seeks to fulfill the original 'holistic' aspirations of its founders.
FMG Suite has acquired compliant texting solution MyRepChat to integrate into its full-service tech stack, underscoring the potential of text-based communication as a marketing tool – but also highlighting advisors' challenges with integrating texting into their marketing and client communications workflows, as well as the fine line between texting as an effective communication method and one that's disruptive and irritating to both the client and advisor.
Investment analytics platform YCharts has launched a new feature for building and generating proposals for prospective clients, becoming the 2nd most popular analytics and recommendation tool this year (after Nitrogen's rebranding earlier in 2023) to expand into the increasingly competitive category of sales enablement – underscoring the idea that as advisors use technology to provide more and more value for their clients, there's increasing demand for tools that help advisors sell that value as well.

Read the analysis about these announcements in this month's column, and a discussion of more trends in advisor technology, including:

Brand design consultancy firm Intention.ly has launched Advisor Brand Builder, a tech-enabled service solution that automates much of the process of designing a unique advisory firm brand at a lower cost than a full-service branding process – showing how, when a provider 'tech-ifies' a service by automating everything possible and applying human expertise only when it's needed most, the resulting product can often be spun off and sold on a standalone basis.
Testimonial IQ has launched the latest solution for advisors to gather and showcase client reviews and testimonials in the wake of the new SEC Marketing Rule – but it remains to be seen whether clients will let themselves be directed to a third-party site to leave a review, or if they'll instead naturally gravitate towards the general sites (like Google and Yelp) that they already use to search for other businesses.

And be certain to read to the end, where we have provided an update to our popular "Financial AdvisorTech Solutions Map" (and also added the changes to our AdvisorTech Directory) as well!

*And for #AdvisorTech companies who want to submit their tech announcements for consideration in future issues, please submit to [email protected]!

The Latest In Financial #AdvisorTech (September 2023)

September 4, 2023 07:02 am 0 Comments CATEGORY: Technology & Advisor FinTech

Welcome to the September 2023 issue of the Latest News in Financial #AdvisorTech – where we look at the big news, announcements, and underlying trends and developments that are emerging in the world of technology solutions for financial advisors!

This month's edition kicks off with the news that WiserAdvisor, one of the longest-running lead generation services in the industry, has acquired IndyFin, a startup advisor rating platform that had aspired to be the 'Yelp for Advisors' – which on the one hand provides WiserAdvisor with an opportunity to jump into the business of client reviews and ratings (which has garnered significant interest from multiple AdvisorTech startups hoping to promote such services in the wake of the SEC's new Marketing Rule allowing client testimonials), but on the other hand, raises questions about how much demand there really is for a standalone advisor rating tool, since few advisors are likely to accumulate enough ratings from current or former clients to actually draw in new clients (and advisors with enough clients to get a critical mass of reviews likely have enough clients that they can just rely on client referrals… or don't even need to add new clients anymore?).

From there, the latest highlights also feature a number of other interesting advisor technology announcements, including:

Former United Capital Partners founder/CEO Joe Duran is reportedly exploring the launch of a new RIA 4 years after selling his firm to Goldman Sachs, with a reported emphasis on providing lead generation opportunities for advisors on its platform – which if successful, could provide a new model for boosting organic growth without the high cost of outsourcing to a third-party lead generation service or relying on inorganic growth via mergers & acquisitions.
Onramp Invest, the platform that aimed to solve the challenges of cryptocurrency investing for financial advisors, was acquired by Securitize, a platform specializing in blockchain-based tokenization of private market investments, suggesting that advisors' interest in recommending digital assets for their clients – already limited during previous rallies in the price of Bitcoin and other cryptocurrencies – has declined further amid the price crash and ensuing scandals that have happened in the year-plus since
Wealthtender, a lead generation and advisor rating service, has announced a partnership with custodial account provider UNest to bring its find-an-advisor technology to UNest's customer base of parents opening investment accounts for their children – which, while expanding Wealthtender's footprint in the competitive lead generation market, raises questions about how large of a potential customer base UNest can provide (and whether Wealthtender will be able to secure any larger enterprise partnerships that can help it secure a spot as the "One and only" advisor rating service)

Read the analysis about these announcements in this month's column, and a discussion of more trends in advisor technology, including:

With AI technology proliferating in the financial services industry, regulators are increasingly concerned about possible conflicts of interest if the technology can be manipulated to recommend a company's products and solutions over others (despite being under a technological veneer of 'objectivity'), as highlighted most recently by the SEC issuing proposed regulations for RIAs for evaluating and eliminating conflicts of interest in their technology, and Massachusetts Secretary of State William Galvin sending a request for six companies from different areas of the industry to detail their use of AI in their business practices
Over the last 10–15 years, a number of AdvisorTech providers have gained the majority of market share in certain core categories like financial planning and CRM; but as the most recent Kitces Research on AdvisorTech has found, a new crop of tools has arisen in more recent years that has garnered higher satisfaction ratings than the incumbents, and have been steadily gaining market share – suggesting that the traditional advisor tech stack might eventually be upended and replaced by a new 'next-generation' tech stack that reflects the growing shift of advisors into deeper financial planning and non-AUM fee models

And be certain to read to the end, where we have provided an update to our popular "Financial AdvisorTech Solutions Map" (and also added the changes to our AdvisorTech Directory) as well!

*And for #AdvisorTech companies who want to submit their tech announcements for consideration in future issues, please submit to [email protected]!

The Latest In Financial #AdvisorTech (August 2023)

August 7, 2023 07:02 am 0 Comments CATEGORY: Technology & Advisor FinTech

Welcome to the August 2023 issue of the Latest News in Financial #AdvisorTech – where we look at the big news, announcements, underlying trends, and developments that are emerging in the world of technology solutions for financial advisors!

This month's edition kicks off with the news that estate planning platform Wealth.com has launched Ester, an AI-driven 'legal assistant' that uses machine learning to help advisors quickly review and extract the key information from clients' estate planning documents, as it joins FP Alpha in the competition to become 'Holistiplan for estate planning documents' – although given Wealth.com's core business as a document preparation service, Ester's success may be better measured by how many new clients it brings in to create new estate planning documents, than its overall market share as a standalone estate planning software tool for advisors?

From there, the latest highlights also feature a number of other interesting advisor technology announcements, including:

Wealth Management GPT has launched as one of the first standalone AI writing tools for financial advisors, distinguishing itself from other tools that are integrated within already-existing AdvisorTech tools (which raises questions about how Wealth Management GPT will fit within an advisor's tech stack, and whether its integration capabilities will make it attractive as a standalone tool that can fill in the gaps of advisors' non-AI-enabled tools)
The new Kitces Research AdvisorTech study is out, which along with giving an overview of the current trends in the AdvisorTech marketplace, highlights the depth and breadth of advisors' challenges around integrating the components of their tech stack (which, as the research data suggests, may not just be a problem with the integration capabilities themselves, but with the usability of the software – an issue that could be addressed by better understanding of how and what advisors use integration for)
A new crop of 'digitally native' RIA startups are promising to disrupt the industry by building advisory firms on top of custom-built, all-in-one proprietary technology platforms – which raises questions about whether, like robo-advisors who made similar avowals in the past, they may find that a seamless technology experience isn't enough to persuade advisors to pay a significant portion of their revenue for access to it (or even to attract any more clients than they would have by using standard third-party technology instead of building their own platforms)

Read the analysis about these announcements in this month's column, and a discussion of more trends in advisor technology, including:

With advisors often facing a choice between recommending clients use a trust administrator from a bank who will try to compete for their investment management business, or an accountant or attorney who will likely cost the client more in fees, 2 new technology-enabled trust administration solutions have emerged in Valur and Luminary that promise to keep the advisor at the center of the relationship while offering tech-enabled trust administration at a reduced cost (though it remains to be seen how much advisors really want to be at the center, rather than focusing on just focusing on their traditional role of managing trust assets)
With Twitter faltering and other competitors waiting in the wings to replace it, it's natural to wonder whether we may see a reshaping of the 'Big 3' of social media networks popular among financial advisors – however, for reasons ranging from a lack of options to archive content on newer platforms for compliance to the fact that the other 2 major networks already fulfill most of the functions that advisors need from social media, it seems more likely that the Big 3 will ultimately just turn into the Big 2.

And be certain to read to the end, where we have provided an update to our popular "Financial AdvisorTech Solutions Map" (and also added the changes to our AdvisorTech Directory) as well!

*And for #AdvisorTech companies who want to submit their tech announcements for consideration in future issues, please submit to [email protected]!