Good Luck Beating Technology Providers at Their Own Game

Enterprise-level adviser technology providers are just fine with winning new business behind the scenes; two industry executives explain why “traditional advisory firms” should embrace them. 

Advicent is one of those companies fulfilling a role in the financial services industry that can be hard to explain to someone who hasn’t worked in or around the space.

Among other offerings, Advicent is known for providing the technology backbone underlying the client-facing technology solutions brought to market by many big-name financial services firms and smaller advice shops alike. A great deal of the time the digital tools and platforms are white-labeled, meaning the end-user (i.e., the client) only interacts with Advicent systems via an intermediary, whether that is an institutional financial adviser, a wealth adviser, a private bank, etc.

According to Tony Stich, director, global marketing at Advicent, and Cory Olson, global product director, this “enterprise solutions” portion of the business has been a major point of focus and success for the firm in recent years, with no expectation of a slow down. Both suggest new collaborations with advisers have benefitted not just Advicent, but also the performance of partnering firms and their clients on the ground. They rattled off an impressive list of existing enterprise clients and promised they would be revealing several big new deals soon. 

“We have been around since 1969, which is not something you would usually brag about as a software and solutions provider,” Stich tells PLANADVISER. “But in our case, operating in a more tradition-focused industry, it is helpful to be able to point to that history and learn from it.”

As Stich and Olson tell it, the first traces of what is now Advicent Solutions began in 1969 when Gus Hansch led the development of a software program that would eventually become Financial Profiles. Nearly four decades of development later, Emerging Information Systems Inc. (EMISI) purchased Financial Profiles to complement NaviPlan, its own software solution for financial planners, advisers and enterprises. In 2011, EISI was acquired by Zywave, a provider of software-as-a-service (SaaS) technology solutions for the insurance industry. In 2013, Zywave Financial renamed itself as Advicent Solutions and divested its insurance division, solidifying its exclusive focus on the financial services industry. Finally, in 2014, Advicent acquired the Dutch financial services provider, Figlo, to expand its interactive, client-facing technology to strengthen the adviser-client relationship.

Stich and Olson offer that potted history alongside a pretty frank warning for advisers: Don’t try to beat technology providers at their own game. Firms like Advicent and others are steeped in the history, processes and culture of creating innovative digital technology—not to mention the simple fact that it’s going to be a big challenge for any individual advisory firm to match the investment of a large-scale enterprise solutions provider. And besides, technology providers for the most part don’t want to edge out advisers, anyway. The conclusion is that advisers have a lot more to gain from firms like Advicent than they might have to lose, the pair says. 

“We want to be viewed as a partnering organization that can elevate the performance of an adviser,” Olson adds. “The adviser remains front and center and remains in control of the client relationship. We are simply here to help create new levels of efficiency and scalability across the adviser’s business.”

NEXT: Understanding emerging technology solutions 

Many financial services firms and FinTech consultants agree that personalized technology is now the key to supporting consumers in the ongoing digital revolution, Stich and Olson argue.

“It is not enough to have a website, and not enough to integrate with a CRM,” Olson says. “It is also not enough to do only goal-based planning, nor is it enough to do only cash-flow planning. Consumers today, no matter what age, want access to deep information 24 hours a day, seven days a week, 365 days a year. In addition, they want to use their device of choice to access the information, and at times speak to a human to validate.”

To meet these demands, firms like Advicent and many others are accelerating their technology investment every quarter, the pair explains.

“Digitally enabled firms will undoubtedly win out because consumers are already demanding that technology play a role in adviser-client relationships,” Stich says. “Even better, digital firms will drive revenue and retention because they are focused on giving their clients a better experience, allowing them to share that experience, and ultimately focus on providing the most value to their clients.”

Stich and Olson suggest that “success is not going to be about utilizing every tool you have with every single client.” Instead, success is going to be about “having all of the tools available when necessary to meet different client needs as they arise.”

“Technology that can quickly be modified to meet the changing business needs which are driven by the market, compliance, and clients is crucial,” Stich notes. “In addition to quick modification, it must be very cost-efficient to change and deploy. The key here is the difference between custom-built and configurable technology.”

According to Stich and Olson, in-house custom-built technology typically takes a 12- to 24-month roadmap to design, develop, and deploy. Considerable staff time and resources go into the development of even a single application, and even more time goes into the ongoing maintenance and update of the tools. The upside, of course, is that the tool, technology or software is completely unique to the organization.

“The alternative is configurable technology,” Olson explains. “This allows many different customers [i.e., advisers] to efficiently leverage elements of the tools that are going to be used in exactly the same way across their industry. Usually this is the core intellectual property of the technology vendor and their area of expertise. This way, each customer can lower the cost and development time of the core functionality, but still design the unique elements and conduct their own branding to allow differentiation from competitors. “

The automotive industry does this very well, the pair explains. Car chassis, air filters, oil filters, seats, and batteries are standard across many models from the same maker. “This lowers the cost of all vehicles. However, each model is configured with unique looks and features that allow for differentiation across a product line,” they conclude.