10.11.18

The Future of Wealth Management Platforms Has Arrived

by: Rich Blake

Each year, the BISA Technology Innovation Award recognizes the vast amount of technological innovation shaping the financial services industry's products, services and platforms. Looking back at the submissions of the award recipients and runners up is a fascinating walk along the cutting edge. In the weeks ahead, we'll examine some of the more noteworthy trends and advancements. This week’s focus: wealth management platforms.

From once unfathomable automated solutions to long-sought breakthroughs in data aggregation, you could argue tomorrow's wealth management platforms are in use today. New models, tools, approaches and "robo" developments are reshaping how clients receive and experience financial services.

Here's a look back at some of the most interesting platform innovations in recent history.

Robos on the Rise

VestmarkONE Robo Solution was designed to “empower digitally augmented advisors.” Already serving as the engine behind one of the industry’s largest robo platforms, VestmarkONE is now available as a turn-key offering for broker/dealers (B/Ds), RIAs, asset managers, banks and bank trust departments, a company spokesperson said. Many of today’s robo offerings are viewed as technology islands — that is, bolted-on, digital-only advice delivery mechanisms that are disconnected from existing middle- and back-office infrastructure. This leads to inconsistencies in the advice that firms provide and inefficiencies across the organization. For example, the home-office struggles with yet another technology ecosystem, advisors are unable to add value and investors suffer from a disjointed client experience.

Looking to overcome these shortcomings, VestmarkONE offers a comprehensive platform with a configurable blend of human and automated advice delivery — enabling wealth management organizations to leverage aspects of each. Firms can manage the platform alongside mutual fund advisory, ETF advisory, SMAs, UMAs, and Rep discretionary programs, as well as tailor how investors assess their investment needs while automatically generating a recommended portfolio.

Meanwhile, last summer, LPL Financial unveiled its advisor-enhanced digital advice solution, the Guided Wealth Portfolios platform (GWP), a centrally managed, algorithm-based investment program. GWP uses proprietary automated computer algorithms to generate investment recommendations (based upon LPL-built model portfolios). Since its launch one year ago, GWP has seen more than 1,500 advisors use it as of July, the company said.

Although the robo-investing space is a fast-growing category, such automation need not exist on a proverbial island cordoned off from actual human financial advisors. LPL looked to create the first “robo-advisor” style platform in the independent B/D space that combines a digital investment experience with a personal financial advisor. An advisor-enhanced digital advice solution, the platform enables institutions to offer financial advice to clients of all sizes and provide immediate account access, in a manner that’s highly scalable and branded by the institution.

GWP is a hybrid of existing technology combined with new wrinkles. Whereas robo offerings combined with call center-based advisors have existed for several years, the GWP platform was specifically created for financial advisors to use with and grow their client base. GWP puts the control into the hands of advisors and institutions. Instead of reaching an impersonal advisor, clients can get an individual advisor or advisor team at their institution.

Unlike straight-to-consumer robo platforms, GWP is not just an algorithm; it provides a digital investing experience combined with a human advisor. By keeping a human advisor in the relationship, investors can choose when they want personalized advice from an individual advisor, while at the same time having 24/7 access to a customized financial plan and their portfolio.

All About Aggregation

St. Cloud, Minnesota-based Cetera Financial Institutions, a Cetera Financial Group-affiliated firm focused exclusively on banks and credit unions, took home two 2017 BISA Technology Innovation awards. One of them was for Cetera Fastpath, technology that allows clients to connect with other financial platforms. The consolidated integration creates an enhanced experience for the financial institution client to access a variety of tools directly from the financial institution website.

“Our goal is to continuously expand on our vision of providing a holistic ecosystem of tools and services to help bank advisors build and strengthen their practices for the long term,” said Sean Casey, executive vice president and director of business development for Cetera Financial Institutions.  

Envestnet's integrated investment management platform, One Wealth, aims to provide a single, integrated technology platform across bank brokerage, bank trust and RIA business units. One Wealth combines traditional and digital advice technologies into a single infrastructure in a multi-custody, open architecture framework. One Wealth connects key stakeholders with portals for investment professionals, end investors, home office management and portfolio managers.

One Wealth allows users to:

• Aggregate and standardize custody, trust, accounting and trading data
• Create a hybrid investment architecture solution encompassing proprietary and third-party solutions
• Create a centralized “best thinking” portfolio
• Drive scalable advice delivery leveraging state-of-the-art sleeve-based, unified managed-account solutions.

LPL Financial developed a new state-of-the-art digital wealth management platform called ClientWorks. The goal of the enhanced platform is to deliver a digital office that enhances client productivity. The platform drives efficiencies by reducing back office work through automation, while enhancing the service experience and ultimately enabling clients to create scale in their businesses.

Deployed to all 30,000 users, ClientWorks is a secure digital platform that enables a diverse set of financial advisors to spend less time tethered to technology and more time interacting with clients and prospects.

ClientWorks provides advisors and their staff with an end-to-end integrated advisor workstation that enables them to optimize how they deliver financial advice and manage their practices from desktop and tablet.

The platform delivers value in the breadth and depth of all the crucial business capabilities required to effectively manage a practice. From client and account management to reporting, compliance oversight and analytics, ClientWorks puts the power of technology in the hands of the advisor to deliver sound financial advice. It also provides access to the tools and insights for advisors to manage, understand, grow and scale their practice.

CUSO Financial Services, LP and Sorrento Pacific Financial, LLC co-created fundVISION aimed at small- to mid-sized investors who have only mutual funds for their investments. It allows the client to have a single point of contact servicing all their funds.

Many advisors serve a range of clients, from emerging to high-net-worth, with a range of needs. Pershing’s enhanced managed-investments platform makes it easier for advisors to serve different types of investors. Advisors can manage investors’ needs from proposal to performance and perform core functions and access crucial information without toggling between multiple platforms, allowing for greater productivity and increased operational efficiencies.

Components include: proposal generation, account opening and maintenance, portfolio analytics, model management, business intelligence, research center, block trading and rebalancing and wealth reporting.

BNY Mellon's Albridge offers yet another comprehensive, holistic reporting application — Albridge Wealth Reporting — that allows an advisor to better collaborate with clients (i.e., share charts and graphs that illustrate progress toward goals).

Through Albridge Wealth Reporting, advisors can provide a more holistic view of client assets, through access to consolidated and aggregated client account data from hundreds of diverse sources, including proprietary feeds, banking, brokerage, insurance, retirement, managed accounts, alternatives and trusts.

Data entry is automated, which improves data quality and reduces the potential for human error. It also reduces the time spent preparing for client review meetings.

Back to Front

One of the challenges that institutions routinely face is an inability to connect the front-end systems (where data is created) with the back-end systems (where data is stored).

Enter GigaSpaces, a provider of in-memory computing (IMC) technologies that unify fast-data analytics, artificial intelligence (AI) and real-time applications on a single-software platform. In March 2018, GigaSpaces revealed major upgrades to its InsightEdge Platform. These enhancements give users the agility required to transform businesses into insight-driven organizations.

“The traditional batch-oriented cycle of business intelligence insight is giving way to new deployment architectures delivering real-time access to data and the expected insights that it will provide,” said Gartner analysts Adam Ronthal and Roxane Edjlali in an April 2017 report, Delivering Digital Business Value Using Practical Hybrid Transactional/Analytics. “In-memory computing provides performance that removes the need for competing operational and analytical strategies for accessing data. When all the data can fit in active memory, complicated aggregations, summaries and even predictive modeling can now be performed virtually, with no requirement to update and build the supporting structures that previously required dedicated platforms to accomplish.”

Enterprises are constantly seeking more efficient ways to process and analyze burgeoning data volumes within their organizations. GigaSpaces overcomes the complexities of big data and analytics processes, making it possible to gain actionable insight the instant data is available. The latest release introduces a multi-tiered data storage approach to the MemoryXtend module. It allows customized preferences for data prioritization.

Want to be considered for a 2019 Technology Innovation Award? Click here to apply before the Nov. 2 deadline.