At long last, financial adviser technology is inching closer toward meaningful integration.
Vendors, most of whom are competitors, increasingly are embracing integration, allowing advisers to move easily between platforms and, in some cases, to share relevant data.
The push toward compatibility was no more evident than last week at Technology Tools for Today, a three-day gathering of advisers and technology vendors in Dallas.
Announcements for a variety of companies were made throughout the gathering: Riskalyze and CLS Investments
joined forces to offer an adviser-exclusive robo, RiXtrema and Finametrica struck a relationship to pair a risk questionnaire with risk portfolios, and eMoney CEO Edmond Walters presented
the firm's new platform emX Select that will integrate 28 systems by September.
Financial advisers, for their part, say the long overdue move toward integration is making their lives much easier.
“The fact that we're seeing two-way integration finally be set up is a huge push forward for the industry,” Thom Hall, a financial adviser in Utah, said. “From a planning perspective, all data lives in all places and being consistently synched up on all different platforms is huge."
Prior to integrated systems, advisers had to choose programs that worked together, not necessarily those they liked best. But companies are starting to work together to allow an open-ended structure, giving the end-user the ability to mix and match whatever they want.
“It's all about collaboration,” said Joel Bruckenstein, co-chair of the conference.
Even companies considered competitors are coming together, leaving it up to advisers to decide what system they want to use. eMoney's new platform, for example, will showcase the need to stand out as advisers will be able to choose the program they like best among 28 options, including Redtail and Orion.
“eMoney and MoneyGuidePro are competitors and should be arch enemies,” Mr. Hall said. “But they decided to work together.”
“It's a risky move,” Mr. Hall added. “They're saying we're confident enough in the product that we're making it really easy for you to leave us.”
To be sure, full-scale integration still remains a long way off. In
a 2015 InvestmentNews study, 53% of advisers said some of their systems are integrated and others are not. And 58% of advisers said these interfaces were integrated by a third-party vendor, which suggests advisers may need to explore options easily accessible and user-friendly.
There is a clear desire by advisers to include integration into their practice, however. Of a list of responses, 91% of advisers said one of the top three benefits of pursuing integration was improving the firm's efficiency and scalability, followed closely behind with 82% who said improving workflows and productivity.
“Advisers want to live in one place as much as possible,” Robert DeFrancis, director of sales for Junxture, said. “There is more of making it so you don't have to think about doing it.”
“It's the idea of best in breed,” Barry Mulholland, assistant professor at Texas Tech University Department of Personal Financial Planning, said.
In the future, advisers will choose what platforms they think mix well together — and more importantly, which ones match their clients' needs — or they may choose to try them all to find the answer.
“At the end of the day, all of this ties back to the client experience,” Mr. Bruckenstein said. “For many years, the adviser dictated the experience to the client. Now everything is flipping 180 degrees. This technology is being built to facilitate that.”
