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Pace of Innovation Likely to Accelerate in 2018

Industry competition for clients and the growing popularity of low-cost robo-advisors are likely to continue increasing pressure on advisors to lower their fees.

In the process, advisors are likely to increasingly embrace innovative technology that can cut costs by boosting efficiency while enhancing services for clients. Marketing automation and account aggregation are just a few examples of technology that is likely to be increasingly embraced this year.

David Edmond is a financial planner in Santa Barbara who has been seeking news ways to use technology. He has been using marketing automation technology from Ontraport, reports Financial Planning.

The platform provides technology for SMS text messaging, customer relationship management system, color postcards, Facebook integration, and membership areas for clients. He maintains that it allows him to provide prospects with education and valuable content.

In the process, it allows him to build credibility with potential clients. Infusionsoft is another automation program that offers certain services that are similar to those offered by Ontraport.

A recent study by SEI underscores strong demand among advisors for technology that can make client prospecting more efficient. In a survey by the firm, 35% of advisors say new client prospecting and acquisition tools would be the most beneficial types of technology for 2018.

The study determined that many advisors struggle with generating referrals that are needed to meet their growth goals. In another question, 46% of advisors say CRM tools are the most helpful technology.

One cutting edge development that could start to gain traction is using artificial intelligence to enhance interactions with clients. ForwardLane is currently offering its AI-enabled platform, which uses natural language to track hundreds of data points, including recent news, reports Programmable Web. The platform’s Personalized Insights API analyzes profile data to develop tailored messages.

The company maintains that research that previously took hours to perform can now be done in milliseconds. In one example, it illustrates how an advisor uses the technology to quickly answer a question regarding the impact of volatility in China on a client’s portfolio.

Like other types of automation technology, ForwardLane seeks to help advisors streamline client servicing and make prospecting more efficient. By using metrics that are commonly applied to tech firms, the company may appear to be a neophyte, having raised only $1 million in funding. However, it counts Thomson Reuters among its investors.

Account aggregation technology is also likely to grow in popularity this year. The technology is already being used by many large brands, including Vanguard and Betterment. While Vanguard is well known as a low-cost fund provider for do-it-yourselfers, its account aggregation, which it offers through Envestnet Yodlee, was likely added to enhance the indexing giant’s robo-advisor service.

Other platforms have also embraced the technology. Earlier last year, Hanlon, which offers a wealth management platform, announced that it was adding account aggregation from Morningstar’s ByAllAccounts technology.

By offering account aggregation, advisors can more easily provide comprehensive investment planning because they can quickly view clients’ portfolios, including portfolios held at other firms. The process can simplify financial planning functions, such as calculating net worth and annual investment returns.

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