Selecting the Right Platforms for a Successful Practice

PLANADVISER recently spoke with Kyle Wiggs, co-founder and CEO of UX Wealth Partners LLC, a platforms for registered investment advisers with a focus on artificial intelligence and machine learning investment technologies.

Wiggs discussed how RIAs can navigate an ever-crowded market for back-office support.

PLANADVISER: When it comes to the fintech space, I am reminded of the behavioral finance learning that too much choice means a lack of decisionmaking. For advisers looking to change their current back office or maybe just enhance their practice, there are now so many options from which to choose. How do they make sense of them all?

Kyle Wiggs: I talk to advisers all the time, and they agree that it’s overwhelming and there’s so much technology and they don’t know where to begin. It’s almost like they take the path of least resistance.

It seems daunting. I think it’s actually not as bad as people think, and technology has come so far. But for some advisers, it’s almost paralyzing.

I think what the advisers have to do is to ask themselves the question: What are the current things that I like about my situation and what are the things that I would change?

For example, maybe they’re at an older custodian. Do they like the account-opening process? I think they need to literally have almost that T chart of: here’s what’s working, here’s what’s not, and they need to start with that. The foundation has to be, in my opinion, the focus.

I think you have to have a digital custodian. We do a ton of business with the Schwabs of the world, the Fidelitys of the world, and they’re not going anywhere. But man, if you look at like an Apex and how that account opening flows, you just have so many more options.

So the first place advisers have to start is with that list and then ask themselves the question: Where am I in the life cycle of my business? Because if they don’t start with the end in mind, I think they get in trouble.

PLANADVISER: How can advisers think about the variety of ancillary services and technologies available?

Wiggs: When advisers are set on their custodian or home office, then I think about workflow, and that’s almost like a hub and spoke. I approach it from two perspectives. First is: What is the adviser experience? Second, how do they interact with other technologies?

What are companies that have the cleanest APIs to integrate? Because there isn’t one system that does everything perfectly, and some things play well with others, and others don’t.

PLANADVISER: Does this apply whether you are at a broker/dealer or at an RIA?

Wiggs: Especially on the broker/dealer side, it’s still, in my opinion, largely driven by economics and relationships. Then they find themselves in this ecosystem asking to do things. … Whereas I think, on the RIA side, yes, there’s a lot more flexibility, but they need to understand who owns their data.

One of the issues that our industry doesn’t talk enough about is … advisers don’t largely own their data. The other thing they don’t realize is that the custodians only maintain, typically, on average, 18 months of history. For many advisers, [data] will be the largest asset that they have ever built.

What happens if I’m going to go sell my business in 10 years? What are the decisions I need to make today to set myself up for maximum valuation? Well, No. 1, they need to partner with a custodian and a platform that allow that data ownership.

More on this topic:

	Tackling Succession Misalignment in Advisory Firms
	Deepfaked Fiduciary: The Real AI Threat Nobody’s Talking About