Pershing
"The right balance of the personal touch and empowering clients to be a part of the process is increasingly important."
Marc Butler
Managing Director
iNautix (USA) LLC
How do you think technology has changed how investment professionals work?
I think it’s changed in a couple of ways. Technology has given them opportunities to become more efficient in what they do. The bigger change, though, is probably in how they work with and serve their clients.
Which leads to the next question, how has technology changed the investment professional-client relationship model?
I think that the relationship has become far more collaborative, and the available technology has certainly enabled this collaboration. Today, clients have access to more information, to their accounts, to research, to modify their financial plans, etc. The right balance of the personal touch and empowering clients to be a part of the process is increasingly important. It also helps make the investment professional’s business more scalable to be able to serve more clients or serve the existing ones better.
Why do you think investment professionals keep technology at 'arms-length?'
In a lot of cases, it’s a fear of the unknown. Investment professionals are not in the technology business and shouldn’t have to be. Technology and service providers have done significant work in the areas of making applications more usable, better integrated, and in offering lots of opportunities for training. Despite all of this, adoption and use of technology solutions is generally low. It’s not as easy as just offering an investment professional an hour-long web or in-person training session and then sending them back to their job to use a solution.
We need to think about more of a 'hands-on' approach, in which a provider is sitting with an investment professional in their work setting. Then, there is the opportunity for those “If you are doing that, well, hold on a second—here’s what you can use on the platform to do it more easily” moments. It’s a chance for them to really see how the solution relates to their practice and day-to-day workflow. The unknown becomes known, the advantages to them become clear, and the comfort level increases. This clearly involves an investment in time and resources, but if we want to realize the full promise of technology usage amongst investment professionals and ultimately drive higher utilization, then we’re going to need to do something different.
With that being said, what would you say are the top technological challenges facing investment professionals?
I think that integration is a huge challenge: how do you get different applications to talk with one another? If you walk into a typical investment professional’s office, you will find that there are seven or eight different applications in use on a frequent basis; and, only in rare instances are they ‘talking’ to each other or sharing the same data. It’s a huge challenge to becoming efficient if you have to re-key the same data into two systems because they don’t communicate. And, in many cases, the investment professional doesn’t have a choice as to which system they can use: these are the applications mandated by the firm with which they work. However, if you were able to show them a more integrated model, a more integrated platform, the likelihood of higher adoption would be greater.
What is Pershing doing to help overcome these and other challenges they are facing?
One of our biggest firm-wide initiatives is delivering the next generation of our NetExchange® platform. Investment professionals will have a platform with all of the components an investment professional requires to be efficient in conducting their business. Ultimately, it all comes back to integration and enabling investment professionals to maximize their efficiency.
In a broader sense, what can investment professionals do to better integrate technology into their business?
First, document management systems can help to reduce the amount of paper they have to deal with. Then there are customer relationship management systems (CRM), which are great for helping them keep in touch with clients and maintaining updates on their lives, which is essential to deepening relationships. Financial planning systems are another useful tool that can help ease what is typically a very intense process. Those are some of the obvious ones. Another less obvious, but certainly recommended, technique is to leverage off of the “free” consulting that technology solution providers make available. Talking with the providers themselves helps to find out how others are using the system and can uncover hidden efficiencies.
Can you look at what is happening today and project what will have the most impact on tomorrow?
The broker-dealers and custodians that are driving greater efficiencies for investment professionals are going to be the winners. Technology is going to become a greater measure of success for broker-dealers than it ever has in the past, affecting both their recruiting and their perception in the marketplace. Younger investment professionals coming up through the ranks and their clients have grown up in a technology-driven world and that’s how they’re used to working. While many firms are putting off investments in making themselves and their investment professionals more efficient because of the economy, those that are will be well positioned when the climate improves. We will also continue to see more ‘coopetition’ between solution providers who sometimes compete with one another, in the interest of integration and serving their mutual customers.
To learn more about how to better integrate technology into your business, please contact your home office.
