Despite the emergence of fintech, a dominant portion of financial advisors and wealth managers’ time is still spent on administrating clients, rather than serving them.
An estimated 70 percent of time is spent by advisors on administrative duties with limited improvements in accelerating workflow processes, according to Saxo Market’s APAC CEO Adam Reynolds.
So much time is spent trying to get approvals from clients for a switch, rebalance portfolios or setting up meetings,» he said. «Spending 70 percent of your time doing admin is never a win.»
«At the end of the day, every advisor is trying to the same thing: be the trusted advisor,» added Quantifeed’s chief commercial officer John Robson. «This can only be done by communicating with clients about how ongoing events are relevant to their portfolio and deliver key information about risks and opportunities.»
In-house Versus Vendors
Saxo and Quantified recently announced their intention to launch a platform-based solution to address such operational issues, targeting independent financial advisors primarily due to their lack of budget and viable alternatives in the market. Reynolds notes that whilst there are providers that tackle individual or groups of processes, there are few that have an integrated platform with a tech set enabling execution, custody, settlement and customized digital experiences.
But even for large banks with budget and desire to develop in-house solutions, there are challenges such as hiring for top talent, who are more likely to join tech rather than finance leaders, and cultivating internal innovation. Some have begun to realize that limitations can extend beyond just financial and are increasingly open to outsourcing.
«This is not the first time we’ve observed such trends. If you recall, there were global firms that used to build even their own e-mail systems,» Robson explained. «Of course, this is now rarely the case. A lot of big organizations are more and more comfortable with embracing vendors.»
Squeezed in the Middle
Independent financial advisors (IFA) are being squeezed in the middle: from the top, by large banks and asset managers with breadth and depth of human expertise that is hard to match without scale; and from the bottom, by fintech firms that can survive on razor-thin margins due to low costs.
For IFAs to remain sustainable, optimization is necessary at all levels, especially for menial, low value tasks that do not involve client interaction. Just to execute a trade, for example, Reynold has anecdotally heard of advisors use one client relationship management system to view the account; transition to another system to review recommended investments; take a print out of said data; and input into a trading system.
«For goodness sake, we have got to make that easier,» Reynolds said. «And if we can’t do that, we are useless.»
