Dozens of vendors and hundreds of attendees gathered for the T3 Advisor Conference in Garden Grove, California, last week. Their mission: to share and gain knowledge on the technologies available to wealth management firms today and what the future could bring, in terms of increased competition and costs, for those who don’t proactively embrace innovation as a strategy for tackling the industry’s current challenges. This objective is particularly pertinent and vital for the small-to-medium-sized firms that made up the vast majority of the conference’s attendees.
While we did not spend an afternoon at Disneyland, it was nonetheless an energetic and enjoyable conference full of panelists and presenters with various backgrounds from around the country, covering topics like digital adoption, the client experience, regulatory compliance, the fiduciary era and blockchain. Here are three points of saliency from the event:
- Tech adoption is essential to growth, and survival: Granted this could be taken as the marketing theme for the conference itself, but even still, vendors and thought leaders, citing increased budgetary constraints and evolving client behaviors and expectations, stressed this point more often than not. George Fischer of Advicent cited Accenture research showing that of the $30T in wealth expected to be transferred from one generation to another in the near future, traditional advisors will probably retain only 20 percent. Younger investors are looking for stronger relationships, contextually richer experiences and more transparent practices from wealth managers. In order to deliver this higher value proposition and strengthen margins, advisors must turn to technologies that streamline operations and improve service. Wealth Access, which aggregates accounts, found that their customers had converted 65 percent of the $4.8B in assets the platform had aggregated, and, perhaps most importantly, end clients were quite happy with the experience.
- The advisory firm will look necessarily different 10 years from now: During a panel featuring Andy Putterman of 1812 Park, LLC, and Ian Sheridan of Vestigo Ventures, a great deal of attention was paid to the fact that wealth management firms, at least those who exercise a high level of intellectual curiosity and wish to seize all available opportunities, are evolving. The reasons for this transformation involve market forces and the fact that the profile of an advisory firm is no longer what it once was. Putterman opened the session by describing in great detail the multifaceted composition of a 21st century financial services firm. He asked attendees for the business’ name, and it turned out to be none other than Alibaba’s Ant. Sheridon expanded on this by talking about the disruptive model of Acorns and how, despite its purely digital interface, it is building a relationship with Millennials that could prove incredibly costly for firms that do not evolve. Additionally, and using the analogies of shopping online, talking to Alexa or using social media, the notion of privacy being generational no longer holds water, as individuals of all ages are surrendering segments of their lives and personal data to technology in return for a more tailored and user-friendly experience regardless of the service they are seeking. Both Putterman and Sheridan believe that by 2025 advisory firms will either employ this same multi-dimensional, omnichannel strategy, or no longer exist.
- Blockchain will rapidly and profoundly impact financial services: According to Magdalena Ramada, Senior Economist with Willis Towers Watson, blockchain, in conjunction with the Internet of Things and machine learning, will fundamentally change the way vendors and firms operate, and the beginning of this manifestation is set for 2017. Why? Blockchain, the centralized yet decentralized, digitally distributed ledger technology, accounted for $1.4B in startup investment in 2016, and 9 out of 10 major North American and European banks are currently exploring the innovation. As it is predicted to deliver 70 percent in financial reporting savings and 50 percent in compliance and operations savings, according to data from Ramada, it’s no wonder the time for blockchain is now.
For those C-suite executives looking for an event that caters to large firms, the T3 Technology Tools for Today Enterprise Conference will take place in Las Vegas next fall, and the perspectives garnered there should complement those from last week, remaining consistent with the overarching trends Seismic has been observing for quite a while.