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The 2024 Technology Tools for Today (T3) Advisor Conference, held last month in Las Vegas, Nevada, featured a large gathering of financial advisors and representatives from across the fintech industry. Hosted by Joel Bruckenstein and his team from T3 Consulting, the conference focused heavily on the relationship between financial advice and its accompanying fintech, covering everything from how AI and other tech developments are changing the advisor landscape in unprecedented ways to the importance of stringent cybersecurity measures, tech-stack integrations that actually work together cohesively and seamlessly, and the value of retaining the human essence in a wealth management landscape that is constantly moving forward.
In this guest post, Craig Iskowitz – CEO and founder of Ezra Group, a financial technology consulting firm – highlights this year's conference with his signature Twitter-driven recap, featuring presentations on the compelling paradox of AI; as while AI has become increasingly associated with overcoming human limitations with its efficiency, accuracy, and convenience, its weakness actually lies in its lack of humanity and inability to establish human connections. For example, Snappy Kraken emphasized how delegating tasks to AI tools can increase efficiency beyond what advisors can do on their own, and TradePMR shared their own (surprising) experience that their highly skilled personal concierges were actually AI bots; however, both companies conceded that technology can only go so far without a human relationship acting as the 'engine' for all of these (automated) pieces.
A continual thread through the conference was the ongoing effort to build a truly cohesive tech stack. In the wake of an AdvisorTech boom over the last decade, many advisors have all the tools they need to build truly comprehensive solutions for their clients. However, as Pershing Wove's Ainslie Simmonds points out, 65% of affluent investors are willing to leave their advisors if they do not offer an integrated tech experience – and in fact, having interoperable tech was a key component to growth.
Other major highlights from the T3 Advisor Technology Conference included:
Finally, the annual T3/Inside Information Software Survey, which assesses the software programs used by financial advisors, found that tax planning tools are on the rise – with adoption rates jumping from 30% to 43%. Likewise, while CRM usage has slipped by about 5%, the overall number of advisors who use a CRM still remains at a dominant 92%. And lastly, as data becomes more comprehensive in today's digital landscape, cybersecurity rises in importance – and cybersecurity tool adoption remains on a slow, but steady, rise.
Ultimately, the 2024 T3 Advisor Conference brought together advisors, leaders, vendors, and students from all across the financial advice industry to share insights on threats, changes, observations – and, of course, to examine new opportunities in a constantly shifting fintech landscape. As software providers grow in number and their offerings expand in complexity, automation and cybersecurity will be central themes as client preferences continue to change. Which means that there is plenty of space – and demand – for technology to evolve, continually helping more advisors to be better, and more successful, and also allowing for the definitions of 'better' and 'successful' to grow as our technology options do as well!
Welcome back to the 362nd episode of the Financial Advisor Success Podcast!
My guest on today's podcast is Jeff Brown. Jeff is the President of Stratos Private Wealth, an RIA based in San Diego, California, that oversees almost $1.5 billion in assets under management for just over 350 client households.
What's unique about Jeff, though, is how his firm has developed associate advisor compensation plans and career tracks, with well-defined Level 1, Level 2, and Level 3 performance indicators of exactly what those advisors should be able to accomplish at each stage of their career progression towards becoming a lead advisor (which is allowing the firm to train and develop its future senior advisors from the ground up).
In this episode, we talk in-depth about why Jeff decided on a growth strategy of having the firm generate prospects for its lead advisors and how it allowed them to hire and develop advisors that better connect with and serve (and retain) clients instead, the unique performance review plan and scoring system that Jeff implemented to both highlight when his associate advisors were ready for a promotion and is used to calculate their bonuses, and how the firm has leveraged client referrals, content creation, social media, and M&A to bring in clients for its advisors on the way to growing to nearly $1.5 billion of AUM (and is now increasing the firm's marketing budget and hiring a dedicated marketing professional to help further expand his firm's reach).
We also talk about how Jeff transitioned from the wirehouse world to start his own RIA and how, after feeling initially overwhelmed by everything from selecting technology to leasing office space, he chose the supported independence model offered by Stratos Wealth Partners, the mental shift from focusing on income to enterprise value that led Jeff to sell a minority stake, and subsequently a majority of his firm to Stratos, and how becoming an employee of the firm Jeff previously owned has actually been energizing for him as he works to expand the opportunity beyond his own firm and build out an entire unified private wealth platform under the Stratos umbrella.
And be certain to listen to the end, where Jeff shares how a bad partnership breakup earlier in his career has changed the way he views and creates partnership and operating agreements today, why Jeff wishes he had set bigger goals for himself earlier in his career and revels in how many different ways there are to build a successful advisory business (despite naysayers who say "you can't do it that way"), and why Jeff recommends that young advisors decide early on in their careers whether they want to pursue an employee advisor path or build a firm of their own as they evaluate their own career risk and return preferences.
So, whether you're interested in learning about how to build associate advisor compensation plans and career tracks, how to leverage a multi-faceted marketing approach to generate client leads, or what it looks like to roll up into a larger RIA, then we hope you enjoy this episode of the Financial Advisor Success podcast, with Jeff Brown.
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:
Read the analysis about these announcements in this month's column, and a discussion of more trends in advisor technology, including:
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]!
Consumers have a wide range of options when it comes to choosing a provider of financial advice, from larger wirehouses and asset managers to smaller Registered Investment Advisers (RIAs). Given that larger firms tend to have more substantial marketing budgets to attract clients, smaller firms and their advisors have had to look for alternative ways to differentiate themselves from the competition. Which led many firms to market all the ways they were 'better' than other sources of financial advice by highlighting their status as fiduciaries, fee-only advisors, or by offering (more) comprehensive financial planning services beyond investment management, as just a few examples.
However, while these attributes remain valuable for clients (and are worth highlighting), their value to smaller advisory firms as differentiators has eroded over time as what may have once been unique characteristics for these firms are now either increasingly common or have become harder to parse for consumers. For instance, even though RIAs are bound by a more stringent fiduciary standard, consumers might be unaware of the nuanced differences between that obligation and the seemingly similar requirements of broker-dealers under Regulation Best Interest. Similarly, consumers may struggle to understand the difference between a “financial plan” and a “more comprehensive financial plan” if they’ve never been through the financial planning process in the first place.
In this environment, another option for smaller firms to compete is to focus on how they are different, instead of marketing how they might be better than their competitors. And by using their website and other marketing materials to position themselves as different, smaller firms can demonstrate to their ideal target clients why they are the right choice for their financial planning needs.
Because the largest firms typically cast a very wide net when it comes to attracting prospective clients (whether in terms of age, profession, planning needs, or other factors), serving a client base with a narrower set of characteristics can help a firm stand out. Which means that if an advisor can demonstrate that they recognize (and can help solve) their ideal client's unique pain points, such prospects are likely to feel a stronger connection to the smaller, more targeted firm, and to believe that that small firm will be better understood by their advisor compared to a more generalist large firm with a bigger marketing budget.
Another way advisors can demonstrate how they are different is by explaining how, exactly, they do financial planning, and what specific services they provide for their ideal clients as a way to communicate their value. Because when a firm has an ideal client type, they often are able to go deeper into their clients' specific needs, and can communicate exactly how the process works to address those needs. This lets prospective clients know what to expect (and helps them understand the value they will be receiving in exchange for their fees!). This service specificity can be a differentiator for firms with ideal client types, as a firm that works with a broader client base will likely need to be more generic in its marketing, given that the planning needs of its clients will be significantly broader.
Ultimately, the key point is that while it has gotten more difficult for financial planning firms to show how they are better based on traditional characteristics such as being a fiduciary or providing comprehensive planning services, firms can shift their focus to emphasize how they are different and can meet the specific needs of their ideal target client as a way to adjust their marketing efforts. Which helps these firms attract more clients, and continue to thrive amidst competition from larger counterparts!
Enjoy the current installment of "Weekend Reading For Financial Planners" - this week's edition kicks off with the news that a recent CFP Board survey indicates that consumers do not expect AI tools to replace human financial advisors, but rather supplement advisors' work. Further, 87% of respondents said they would trust advice from human advisors, more than any other source of advice surveyed, and well above the 37% who said they trust generative AI tools.
Also in industry news this week:
From there, we have several articles on retirement planning:
We also have a number of articles on investment planning:
We wrap up with 3 final articles, all about remote and hybrid work:
Enjoy the 'light' reading!
Welcome to the June 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 Riskalyze has completed its previously-announced rebranding, and will now be known as “Nitrogen”, a ”growth platform” for advisory firms – which represents less of a shift in the platform’s core function (given that Riskalyze’s risk tolerance tool was always more about providing a clear way for advisors to generate a proposal that demonstrates their value to prospective clients and facilitating their conversion into paid customers, than it was ‘just’ about quantifying risk tolerance for compliance purposes), and more of an acknowledgment of its true value proposition as a ‘sales enablement’ tool which has allowed it to achieve dominant market share (despite spawning numerous low-cost risk tolerance assessment competitors).
From there, the latest highlights also feature a number of other interesting advisor technology announcements, including:
Read the analysis about these announcements in this month’s column, and a discussion of more trends in advisor technology, including:
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 them to [email protected]!
Enjoy the current installment of “Weekend Reading For Financial Planners” - this week’s edition kicks off with the news of a recent survey indicating that investors overwhelmingly believe that Artificial Intelligence (AI) will help financial advisors better serve their clients and would like to work with an advisor who leverages AI tools. And despite some industry observers’ concerns that AI tools could eventually replace human advisors, a strong majority of those surveyed said they do not expect AI to replace advice from humans. And amid this backdrop, several AdvisorTech tools have added AI capabilities that could further streamline advisory firms’ middle- and back-office tasks and processes.
Also in industry news this week:
From there, we have several articles on practice management:
We also have a number of articles on cash flow and wealth:
We wrap up with 3 final articles, all about gender and money:
Enjoy the ‘light’ reading!
Enjoy the current installment of “Weekend Reading For Financial Planners” - this week’s edition kicks off with the news that a recent study found that clients of advisors providing comprehensive planning services are significantly more satisfied than those receiving a lower tier of service. The study also highlighted the importance of advisors taking the time to build trust with clients and to understand a client’s goals and needs, as this can not only differentiate an advisor from those providing purely transactional investment advice, but also could promote client retention, even in years of poor market performance.
Also in industry news this week:
From there, we have several articles on cash flow:
We also have a number of articles on practice management:
We wrap up with 3 final articles, all about health and wellness:
Enjoy the ‘light’ reading!
Enjoy the current installment of “Weekend Reading For Financial Planners” - this week’s edition kicks off with the news that the passage of “SECURE Act 2.0” has brought a wide range of changes to the world of retirement planning. And given the variety of planning opportunities created by the legislation – from the raising of the beginning age for RMDs to the ability to transfer funds from 529 plans to Roth IRAs – advisors have a significant opportunity to demonstrate value for their clients!
Also in industry news this week:
From there, we have several articles on advisor technology:
We also have a number of articles on investments:
We wrap up with three final articles, all about self-improvement:
Enjoy the ‘light’ reading!
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