04.22.20
Innovator Spotlight: ATA RiskStation
by: Rich Blake
Earlier this year, a select group of technology developers exhibited their solutions as part of the Technology Innovation Lab at BISA’s Annual Convention. In the weeks ahead, you’ll meet some of these companies and learn how they are tackling some vexing problems and challenges that are unfolding at a pivotal moment for financial institutions.
Company Name: ATA RiskStation
HQ: Dallas
Founded: 2012
Platform: ATA RiskStation Essentials
What it is: This three-pronged, cloud-based enterprise platform supports risk, compliance and client engagement, serving all key stakeholders in the wealth management vertical, including advisors, investors, branch managers, compliance officers and senior leaders. Specifically targeting broker-dealers and RIAs, the RiskStation empowers firms and their advisors to monitor key risk metrics through a structured, automated, daily process that gives clients a more complete risk picture as well as actionable insights.Meanwhile, the RiskStation’s Enterprise Compliance Dashboard allows key constituents – advisors, management and the compliance team – a shared, crucially redundant ability to make sure clients’ investments remain within pre-established risk-tolerance level all while documenting engagement resulting in a complete historical audit trail.
Challenge Addressed: The broker-dealer business model is under siege. Revenue is under pressure and margins are compressing, due to lower net interest spreads, reduced management and transaction fees and rising advisor payouts. Add to this a rapidly expanding regulatory landscape – the SEC’s “Reg BI” rules take effect June 30 – bringing increased compliance and operating costs.
Wealth management firms seeking to attract and retain both advisors and clients, in all market environments, will need a compelling value-proposition. Clients and advisors have rising expectations when it comes to game-changing technology across a wide scope of services. Exceeding these expectations, the RiskStation platformdelivers cutting edge tools to successfully navigate the end of the bull market and grapple with increasing volatility.Meanwhile, with that June 30 Reg BI compliance deadline closing in, most firms have data models and processes that just are not configured to be able to seamlessly demonstrate the required oversight and audit trail. The RiskStation’s compliance dashboard corrects any such blind spots.
How it’s Different: Because client portfolios and market environments are not static, the RiskStation harvests fresh client holdings data and processes it daily. Abstracting client risk questions into single number, as is the case with most risk-assessment tools, requires too many concurrent leaps of faith. Instead, theRiskStation's operating model computes and saves exhaustive post-processing granular client data at multiple levels:account; position; scenario and every associated parameter, creating a store of client data that is comprehensive and cumulative.
Binding together all elements of a wealth management enterprise, the product (via the compliance dashboard) supports the overall business and activities related to complying with new regulations. By drilling down to risk drivers at the account and instrument levels, the platform supports highly intuitive, day-to-day risk analytics which, in turn, facilitates client engagement, helping firms to add value and create new recurring revenue streams.
Core Beliefs: Driving better outcomes for advisors and clients is ultimately the best way to drive firm success. The keys to driving better outcomes: delivering a user experience that enables intuitive, transparent and actionable risk conversations between advisors and clients.
Elevator Pitch: Wealth managers need to two things: establish the most accurate view of a client’s risk tolerance and gain their confidence. How to do this?It requires having more proactive risk conversations with clients. ATA RiskStation facilitates these conversations. And on top of that, it automatically alignsportfolio risk with client tolerance. Additionally, the advisory firms can leverage the daily datato support compliance.
Why Now: Broker dealers are facing a perfect storm. Until COVID-19 arrived, firms were focusing on Reg BI. Now the focus is more on remaining relevant while mapping a path to continuing financial viability.
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