There are hundreds of technology offerings in the advisor tech ecosystem geared to help advisors streamline their workflows and have more time for revenue-generating activities. While most tech claims to be efficient, that isn’t the case if the interoperability is poor.
Interoperability for wealthtech is the ability of software solutions to exchange and make use of information. It brings together the data from disparate systems such as CRMs, financial planning, risk analytics, and custodian data, marrying them to provide a comprehensive view of an investor’s financial life. This is crucial for the advisor and the investor alike. For the investor, having the information all in one application allows them to understand their wealth outlook and gives them the data points to work with their Advisor to guide them to financial wellness. For the Advisor, it not only gives them a deep understanding of their client’s financial situations and goals but also allows for efficiency and provides a means to scale while still providing personalized services.
So how do you identify the wealthtech solutions with high interoperability?
Easy to use – A wealth management solution with high interoperability is easy for advisors and brings together the tech solutions relevant to the advisor’s needs. Advisors don’t have time to be thinking about technology or trying to make it work- they need it to work seamlessly with all of their technology.
Collaborative and consultative – The tech partner takes a consultative approach before the sale. They want to understand the advisor’s pain points and help the advisor customize the solution, and provide options that work for their specific business goals. They listen to what the advisor wants and deliver the solutions they need.
Innovative – Often, the tech partner assists the advisor with ‘putting the puzzle pieces together’ to fit the advisor’s goals best today and in the future. The tech partner continuously innovates as the industry innovates, ensuring the advisor who is already a customer receives the best technology to keep them ahead of their competitors.
Changes with the industry/advisor – Technology with high interoperability changes as advisors’ roles change. Trends such as fee compression, a focus on ‘financial wellness,’ and the emergence of efficient models have changed advisors from ‘stock picker/alpha generator’ to financial guide. Advisor success is now based on relationships and guidance more than investment performance and advisor technology needs to assist advisors in building those relationships.
Changes with investors’ needs – The Great Wealth Transfer, the Pandemic, the Great Awakening, and the Great Resignation have driven investors to assess what is important. These events have also redefined financial wellness, progress, success, and retirement. The way for advisors to address this is through technology that delivers touchpoints to investors where they are: face to face, phone, web, and through wealth management apps with high interoperability.
Sarah Rasmuss is Chief Product Officer for CircleBlack, a unified best-of-breed wealth management platform that consolidates data from multiple custodians and allows advisors to choose the best solutions to fit their tech stack.