advisor client technology / Blackred

This article appears in the March 2021 issue of Investment ExecutiveSubscribe to the print edition, read the digital edition or read the articles online.

Technological innovation within the financial services industry continues to accelerate. According to a December 2020 report from Accenture, 60% of North American wealth-management firms are deploying new tech tools to compete in a “virtual-first” world.

Toronto-based Nest Wealth Asset Management Inc. offers Nest Wealth Plus, a wealth-management platform designed to reduce the time financial advisors spend on administrative tasks.

Nest Wealth Plus digitizes the onboarding process and removes “much of the back and forth that was part of traditional know-your-client updates,” said Randy Cass, founder and CEO of Nest Wealth. “The most popular usage of our platform is helping remove costs for businesses that haven’t updated their processes in a long, long time.”

Nest Wealth also trains wealth-management firms and individual financial advisors on how to leverage basic technology. Clients, Cass said, still value the human touch when it comes to receiving financial advice: “What’s happened over the past four to five years is recognition that the ultimate [client] solution is the combination of technology and the advisor.”

In May 2019, Nest Wealth acquired Edmonton-based Razor Logic Systems, a developer of financial planning software, to complement its wealth-management products. M&A activity in the wealthtech space is becoming more common as firms aim to expand their offerings to clients, said Scott Reddel, managing director of capital markets and wealth management with Accenture in New York.

“The key [is] engaging clients in a much richer, more flexible way,” Reddel said, noting that some clients may want to see their investment, financial and estate plans all in one place, for example.

In January 2020, Toronto-based Guardian Capital Group Ltd. acquired a majority interest in Vancouver-based robo-advisor ModernAdvisor Canada Inc. Guardian Capital’s Markham, Ont.-based subsidiary Worldsource Wealth Management Inc. is now integrating ModernAdvisor’s platform into its systems.

Doce Tomic, head of wealth management at Guardian Capital, said he expects the ModernAdvisor platform will help Worldsource advisors efficiently go through discovery and portfolio-modelling processes with clients — either on a desktop or through an online dashboard.

“Both the consumer and advisor want access to tools, and they want [their portfolio] information to be shared very easily for the whole picture,” Tomic said.

The pandemic, Tomic added, has made digital planning tools more of a necessity, which has helped advisors realize how wealthtech can enhance their practices. Covid-19 has led to higher adoption rates for digital tools and processes and a deeper understanding of how technology can “support a good, open relationship for advice,” Tomic said.

Dave Kelly, senior vice-president and head of TD Wealth Private Wealth Management and TD Wealth Financial Planning with Toronto-Dominion Bank, said that leveraging technology is all about satisfying “the increase in demand from clients for both individualized and holistic advice.”

Last fall, the bank launched TD GoalAssist, which helps direct-investing clients build their own portfolios and access specialists. While some investors prefer to go it alone, “there’s a large part of the population where the human connection really, really matters,” Kelly said.

This is especially true in light of Covid-19, which has many clients thinking more about their savings, retirement and emergency plans. “Advice expectations are changing,” Kelly noted, and many clients want a “human plus digital” experience that offers access to the same information and tools as their advisors have.

Kelly said TD aims to create “a collaboration space” for advisors and their clients in addition to launching tools that make digital prospecting easier for advisors.

Peter Lee, executive vice-president of banking centres at CIBC, said serving clients nowadays is all about finding the balance between “high-touch and high-tech.” Digital tools for clients are “complementary” to what an advisor offers, and clients with complex situations “will require that human interaction,” Lee said.

CIBC’s GoalPlanner connects the bank’s clients to advisors through a customer’s online banking dashboard. The bank also introduced direct-to-client technology, such as mobile-based alerts and insight tools.

“Clients find these things important,” Lee said. “The technology component allows us to inform, advise and make sure clients are always up to date” instead of them relying solely on phone calls and meetings with advisors.

“Advice can’t and shouldn’t be completely digitized,” Lee said. “Clients still want that counsel and human touch when it comes to making critical decisions.”