Embracing mobile technology: the next game changer for financial advisors

Transcription

1 Embracing Mobile Technology Spring 2013 Embracing mobile technology: the next game changer for financial advisors We are witnessing a massive change in the way we access and consume information. The world of mobile technology is upon us and is dramatically altering how we work and play when we are on the go. With increased Internet speeds and slick smartphones and tablets, we can send messages, take pictures, play videos, and perform many business functions quickly and efficiently outside our homes and offices. In fact, a recent study by Microsoft Tag 1 predicts that cell phone usage will actually eclipse time spent with desktop and laptop computers by To understand how mobile technology is affecting financial advisors, we interviewed four senior executives at the home offices of independent broker-dealer firms (IBDs), and three advisors associated with independent registered investment advisor (RIA) firms. We also spoke with well-known technology consultants who work with IBDs and RIAs. 3 This paper summarizes these discussions. Inside Mobile Usage Explodes 2 Advisors Show Growing Interest in New Apps 3 Mobile Empowers Advisors and Engages Clients 3 Where Do We Go from Here? 5 Considerations when Going Mobile 6 The Future Is Now 7 Interviewees 8 Highlights Mobile technology is enabling financial advisors to work any place at virtually any time* and to stay highly connected with their clients. The use of smartphones and tablets among advisors is much higher than the national average. 4 From placing trades on the go to reviewing client accounts and preparing financial plans, advisors are using a range of apps to enhance their workflow when off site. Yet we are still in the early stages of mobile use in the financial world and will likely see many new developments on the horizon from new devices to more robust and integrated apps. You may want to consider the independent perspectives outlined in this paper when preparing to capitalize on the mobile opportunity. *System availability and response times may be subject to the mobile phone network being used and to market conditions. 1 Microsoft and Windows are either registered trademarks or trademarks of Microsoft Corporation in the United States and/or other countries. 2 Mobile Reshapes the Future, MediaPost magazine, September 28, 2012, 3 The IBDs mentioned are clients of National Financial, and the RIA firms are clients of Fidelity Institutional Wealth Services. Their experiences may not be representative of your experience. 4 Pew Internet: Mobile, Pew Internet, January 31, 2013, Commentary/2012/February/Pew-Internet-Mobile.aspx.

2 Mobile usage explodes Apple began to transform the mobile market back in 2008 when it unveiled its iphone 3G. Today, given the vast number of multimedia devices and mobile apps that are available, millions of users have turned to smartphones and tablets. As of December 2012, 85% of American adults had a cell phone, 45% had a smartphone, and 31% started 2013 owning a tablet. 4 The rate of adoption has been even higher with financial advisors, according to the 2012 Financial Planning Tech Survey, 5 with 80% of respondents owning a smartphone and 50% owning a tablet. Our interviewees confirmed these high usage rates at their firms. When we held our national event three years ago, very few advisors had mobile devices like an ipad, recalls David C. Knoch, president and COO at 1st Global. Two years ago, there may have been a 30% adoption rate. This past year it was 95%. It s just the way of doing business now and instead of handing out binders of information at our conferences, we simply provide access to a mobile app. The RIA firms we spoke with agree the use of mobile is taking off. Our interviewees at both IBDs and RIA firms have a bring your own device (BYOD) policy in place. We let our reps get their own devices, says Alan McAulay, senior vice president of information technology at Williams Financial Group. They pay for the devices, but if they need help setting them up, we provide assistance. As shown in Figures 1 and 2, the iphone and ipad are the top choice for most advisors. 6 While Apple dominates, especially with independent RIAs, 5 the market is moving quickly. Looking down the road, hybrid devices that combine the performance of a laptop with tablet-like features may change the landscape. While not popular at the moment with advisors, I have them on my radar screen, says Bill Winterberg, a technology consultant with FPPad.com. There is appeal to having a fully functioning laptop that looks and acts like an ipad. Figure 1: WHICH SMARTPHONE do you use for business?* iphone 46% Android TM 29% None 20% BlackBerry 13% Windows Mobile 2% Other 1% Palm TM 0% *2012 Financial Planning Tech Survey, Financial Planning magazine. Android is a trademark of Google Inc. Microsoft and Windows are either registered trademarks or trademarks of Microsoft Corporation in the United States and/or other countries. Figure 2: Among tablet owners, which tablet do you use?* ipad 80% Android 15% Windows Tablet 7% Other 3% *2012 Financial Planning Tech Survey, Financial Planning magazine. Doreen Griffith, executive vice president and chief information officer at Securities America, feels there could be other changes on the horizon with Windows 8. Imagine a world of Windows sites where you can go from your PC to your tablet to your phone and not have to worry if your Word document has all the proper formatting, she says. Advisors show growing interest in new apps According to a 2011 study by Aite Group, 7 when advisors are working remotely they spend 59% of their time managing existing clients, 37% prospecting for new clients, and 4% on other 5 Financial Planning 2012 Tech Survey, Financial Planning magazine, December 1, 2012, technology-survey-financial-planners html?zkprintable=1&nopagination=1. 6 This is based on a survey with the number of responses being the same as major national surveys, but with accuracy far superior at +/ 2.7%. 7 Efficiency in Wealth Management: Mobile at the Gates, Aite Group, October

3 activities. Given this, a broad set of business applications are needed to help them work efficiently off site. When Aite asked advisors what mobile capabilities would be of interest, the number-one choice was a customer relationship management (CRM) system (Figure 3). Tied for second choice were a broker workstation and an advisor dashboard to look at a book of business and receive alerts. More than half of respondents were also interested in market data and news, financial planning tools, and account aggregation capabilities. While our interviewees feel mobile technology is still at an early stage in the financial advisor arena, great strides have been made. Just two years after this Aite survey was completed, many of the mobile capabilities mentioned are available, and advisors are reaping the benefits from creating efficiencies in their daily workflow to staying connected to clients and addressing their needs from any location. We re looking at what s pertinent to conduct business on the go and are making sure mobile capabilities are in place. Chris Maryanopolis, President, Signator Investors, Inc. Mobile empowers advisors and engages clients Our interviewees discussed some of the major benefits they are seeing with the use of mobile devices and apps: Increased flexibility for advisors New mobile capabilities are being released daily that free advisors from an office environment and enable them to perform many functions from any location they choose and at virtually any time of the day. 8 Our advisors say they may be off site, but it doesn t mean they can t take care of business, observes Griffith. In 2011, Securities America released an application that gave their advisors mobile access to their business enterprise systems using smartphone or tablet technology, and more mobile functionality has been added since then. This includes Figure 3: Desire for mobile access Percentage of Financial Advisors Interested in Having Mobile Access to Specific Business Applications (N = 402) Customer relationship management (CRM) Broker workstation Advisor dashboard (book overview, alerts, etc.) Research system delivering market data and news Financial planning Account aggregation (i.e., direct funds and annuities, checking, discount brokerage, 401(k)) Proposal generation Trade blotter Portfolio management system (including portfolio rebalancing) Portfolio construction and analytics % 55% 55% 54% 52% a phone app that enables advisors to operate CRM programs and apprise clients about their accounts. We feel the effective use of mobile technology will grow and retain business for our advisors, she added. We have heard many success stories from our offices that use mobile devices to conduct business, work with prospects, and offer the highest possible level of service to their clients. Doreen Griffith, Executive Vice President and Chief Information Officer, Securities America Enhanced productivity Advisors are now able to handle many tasks immediately rather than waiting to go into the office. Efficiencies come in other forms as well. I use a cloud-based program, says Thomas Hart, president at Hart Investment Management. When I put a meeting into one of my devices, it automatically uploads it to all three of the Apple products I use a small thing, but very convenient. In addition, when I meet with a client at their home or office, I can easily open all their relevant information on my ipad without ever needing to print hard copies again, a real timesaver. After discussing a plan with my client, if their printer is configured properly, I can also air print information directly from my ipad to their machine. All these individual capabilities have a big impact in the aggregate. 51% 49% 48% 48% 47% Source: Aite Group survey of 402 financial advisors, March System availability and response times may be subject to the mobile phone network being used and to market conditions. 3

4 Apps that provide access to client information and help advisors get closer to their investors are being adopted today. David C. Knoch, President & COO, 1st Global Like others, Signator Investors continues to look for new ways to enhance productivity with mobile technology. We do a lot of fact finding on our clients when we first meet with them, notes Chris Maryanopolis, president of the firm. At the moment it is paper based and pretty arduous. We will be building an app that a rep can give to his or her client to prefill some of the basic data. The rep can then have a discussion with the client to complete the more detailed areas. This will really streamline the process and the data can go anywhere the advisor chooses, like into a CRM system or financial planning software. Better collaboration with clients Walking through material on a tablet with touch-screen capabilities can help draw clients into the discussion and can make the experience more interesting and interactive. We have developed a retirement planning tool with an ipad app, explains Maryanopolis. It enables an advisor to really engage their clients and show different scenarios in real time that can help them meet their long-term financial and lifestyle goals. In addition, being able to look at accounts and make trades on the spot creates a much more dynamic meeting. Always on top of market developments The ability to stay on top of market activity and make trades on the go can help ensure that opportunities aren t missed. I travel a great deal because most of my clients are out of state, says Robert Torba, vice president of investments at Avant-Garde Advisors. Staying on top of the market and trading with my mobile device is crucial for me. He can access client account balances, holdings, and transaction activity and place domestic equity, ETF, and mutual fund orders. I also do some research on my mobile device, he adds, and this capability is getting better every day. Superior client service Clients can really benefit from an advisor s ability to respond quickly to different requests using their mobile devices. I work from Florida part of the time, says Mark Sheptoff, managing member at Mark Sheptoff Financial Planning. With my iphone, ipad, access to the functionality available within the Fidelity WealthCentral app, and a capability that enables me to tap into my desktop computer remotely, I am fully functional and can respond to client requests as they come in. Even though I m off site, I think my level of service is even greater as we can stay in contact with clients continuously in today s mobile world. An enhanced image The use of smartphones and tablets can demonstrate to clients that you can embrace new innovations to help serve them well. I think this is especially important for younger clients, observes Sheptoff. They want to know you are on top of things and can deal with them on their level. A recent Fidelity study 9 confirmed this. Looking at what creates a valued advisor in the eyes of those investors surveyed, technology was a key component especially for Gen X/Y investors 21 to 47 years old. A full 81% of this segment who worked with a valued advisor said technology helped them collaborate more effectively. A secure environment With data in the cloud, confidential information can be reviewed without being downloaded to a device important should a device be lost or stolen. Securities America has encouraged a paperless office for many years. Now using a mobile app, any images scanned by the home office or uploaded by advisors can be securely retrieved on mobile devices from almost anywhere. I believe extending these paperless options through mobile devices increases efficiency and provides on-demand access, says Griffith. A big component of the decision for this mobile solution was the fact that no data is transferred directly onto the device, so we have confidence that client data will not be at risk through use of the application. 9 Proving Your Worth: Uncovering the Traits of a Valued Advisor, Fidelity Investments, December Findings were based on two surveys: (1) The 2012 Fidelity Millionaire Outlook that was fielded through an online survey during the period of March 15 29, Participants included 1,520 financial decision makers, including 1,020 millionaire households; and (2) The 2012 Fidelity Broker and Advisor Sentiment Index that was fielded through an online survey during the same period. Participants included 1,207 advisors from across multiple firm types who work primarily with individual investors and manage a minimum of $10M in individual or household investable assets. Both studies were conducted by Bellomy Research, an independent third-party research firm not affiliated with Fidelity Investments. The data reflect a margin of error of +/ 3%. 4

5 A business contingency plan We ve seen many storms and power outages over the past year. If something happens to our building, I have my ipad and a range of functionality from the Fidelity Streetscape mobile app, so I can go to another location and continue to do business, says Maryanopolis. A competitive advantage According to a study by Aite Group, 10 65% of advisors said technology was important or very important when deciding to work with a firm. Mobile is the way the world is going and it s important to show you are keeping up on the tech front to attract potential new reps, notes McAulay. Of course, it depends on the type of firm you are recruiting. Traditional brokers may not care as much because they do a lot of work at their desk, but a financial planner may be much more excited by the possibilities. Our business spans traditional transactional stockbrokers to full-fledged financial planners. Today there are mobile capabilities available for each business model. Alan McAulay, Senior Vice President of Information Technology, Williams Financial The future is now Without question, mobile is one of the fastest evolving sectors in the technology world and we are witnessing another phenomenal change in how we work, communicate, and collaborate. We now hear of even faster data speeds, a range of new apps being developed, and mobile devices that know where you are and what you re doing. It is clear that home offices, advisory firms, and advisors will need to keep a close watch on the developments coming to market to benefit from the many advantages that mobile technology has to offer for their businesses and for the client experience. Where do we go from here? Things are moving fast and our interviewees see potential changes on the horizon. As we look to the future, I see more things becoming mobile, but not being a complete replica of the Web, observes Maryanopolis. I may not get all the functionality on a mobile device that I currently have through a Web site, but I may get things I never had before or even imagined being possible. One example is remote deposit of a check where you take a picture, deposit it, and shred it. Many of the respondents to a recent survey by Bill.com 11 said the ability to process mobile transactions like this is a requirement in today s world in order to help increase efficiency, effectiveness, and competitiveness. Integration is another issue just as relevant for mobile as it is for desktop applications, says McAulay. You need to be able to do complete tasks from a mobile device for it to really work. It doesn t really help if you can do only bits and pieces. Our various service providers have all adopted that philosophy. I think the next level of growth will be in the way mobile applications integrate with each other to increase efficiency. I don t know what the various manufacturers have in store as far as advances are concerned, says Griffith, and whether or not we will ever get to a browser type of app where you don t have to close an app to get to another one. I would hope we could see some improvement there sooner rather than later. We expect to see a lot of innovation continue in the smartphone and tablet space, notes Hadley Stern, vice president at Fidelity Center for Applied Technology. 12 This will include more device-to-device interaction, like iphone-to-ipad sharing of screens and actions. At the same time, we expect to see other devices coming along in the next couple of years. For example, wearable computing, like glasses and watch-like devices that can deliver alerts and notifications. While this may seem a little out there, we are already working on this and coming up with use cases and applications for financial services. 10 Efficiency in Wealth Management: Mobile at the Gates, Aite Group, October Finance Professionals are Embracing Mobile Cash Flow Management, CPA Practice Advisor, April 3, 2013, news/ /finance-professionals-are-embracing-mobile-cash-flow-management-finds-billcom-survey. 12 Fidelity Center for Applied Technology develops innovative ideas and products for a variety of affiliated Fidelity Investment companies and beyond. 5

6 Considerations when going mobile If you are ready to embrace a mobile strategy, there are a number of things you may want to consider. Issues for Home Offices and Advisory Firms Think about a mobile CRM platform A CRM system is the hub of an advisor s practice, providing a centralized repository for client, prospect, and partner data. Being able to access this information from any location is central to a robust mobile initiative. We are redoing our entire CRM infrastructure, explains Knoch. Once that is completed, it becomes foundational and will enable us to put that data at the fingertips of our advisors through a variety of mobile capabilities. Take steps to go paperless It takes an investment of time and money to create a paperless environment, according to Winterberg, but many of those who have done so are able to access the data efficiently and securely through mobile devices a significant advantage. Of course, taking steps to protect information from hackers and ensuring backup will be especially important in a paperless office. You may want to evaluate software programs that are available to address computer security issues, electronic file storage, and security procedures. In addition, you may want to determine if specific documents should also be kept in hardcopy form depending on the nature of the information they contain. Look into e-signature software Enabling advisors to capture signatures electronically is a major convenience for advisors and their clients. It eliminates the need for advisors to send documents through the mail or have clients physically come into their office to sign paperwork. Protect your devices While information is cloud based and there is not a lot of data on the device itself, advisors still need to make sure the device is secure, says Knoch. At a minimum, you may want to password protect mobile devices in case they are lost or stolen. Some devices also allow you to set a unique picture on the lock screen, along with contact details, so it can be returned if found by an honest person. In addition, there are a growing number of mobile device management (MDM) solutions available for assistance in securing and managing disparate devices that may be used, according to Knoch. They typically start by enrolling devices into the MDM system. After this, an administrator at a home office or an advisory firm can easily handle a number of functions, such as changing the configuration profile on a device or remotely wiping it clean of all data. Create a clear policy for mobile usage Even with BYOD policies, it is advisable to have a clear set of guidelines in place. This might cover the level of security required and how the home office or advisory firm will support different devices. It might also cover bring your own cloud (BYOC) issues to educate advisors on the security risks of using personal cloud storage services for confidential information. Go mobile on your Web site Given the growth of mobile devices used by American adults, it may be important for both home offices and advisors 6

7 to consider having mobile-friendly Web sites. This may involve making an existing site compatible for viewing with a mobile device, or developing a completely new mobile version that includes a brief amount of information on the firm along with contact details. Another trend is responsive design, whereby sites are developed for an optimal viewing experience, no matter what device a person is using from mobile phones to desktop computers. A responsive Web design uses media queries to figure out what device is being used and then correctly sizes to fit the screen. Adaptive design is also emerging that detects the type of device being used and changes the site s behavior accordingly, such as enabling swiping between columns when there is a touch capability. Offer training Home offices and larger RIA firms can provide a value-add to their advisors by educating them on the possibilities that these devices offer, and being very clear about the practices that are permitted and acceptable and the ones that should be avoided. At the outset, I also think it is important for advisors to determine why they want to go mobile is it really to help improve efficiency and push the business forward, or is it more for optics? advises McAulay. If they don t know what they are trying to accomplish, it s difficult to help them determine what route to take. Issues for Advisors Look at what s best suited for mobile Don t try to do everything on a mobile device. While I actively trade and do some research on my mobile device, says Torba, I do deeper research and rebalancing when I m back in the office. Some tasks are just better suited for working at a desktop computer. Don t overcomplicate things There are so many apps out there, it can be difficult to determine which ones to use. I suggest advisors keep it simple, says Sheptoff. They should start with what is being offered by their clearing firm or custodian, plus a capability that enables them to access their desktop computer remotely. In the end, that may be enough. Take advantage of the medium Presentations using tablets can have a significant wow factor for clients and prospects, so be sure to take advantage of capabilities that are available for creating polished presentations, including transitions and animations. Match tech options to different client needs Many clients, especially younger ones, don t have the time for an in-person meeting. They may prefer a videoconferencing session of some kind, and there are many options on this front. We re beginning to see a lot more of our advisors using online mobile collaboration tools so they have remote face time with clients, making sure their presence is more prevalent, observes Griffith. Get ready for mobile marketing Adding video marketing, for example, may help attract investors looking for a more technology-rich experience. Video marketing for financial advisors has been gaining popularity over the last several years and shows no sign of plateauing anytime soon Marketing Trends for Financial Advisors, Wealth Management Marketing, January 7,

8 Interviewees Independent Broker-Dealers Doreen Griffith, Executive Vice President and Chief Information Officer, Securities America David C. Knoch, President and COO, 1st Global Chris Maryanopolis, President, Signator Investors, Inc. Alan McAulay, Senior Vice President of Information Technology, Williams Financial Group Registered Investment Advisors Thomas Hart, President, Hart Investment Management, Inc. Mark Sheptoff, Managing Member, Mark Sheptoff Financial Planning Robert Torba, Vice President of Investments, Avant-Garde Advisors LLC Technology Consultant Bill Winterberg, Columnist and Speaker, FPPad.com Hadley Stern, Vice President, Fidelity Center for Applied Technology For more information, please call or contact your Fidelity Sales or Relationship Manager. For investment professional or institutional investor use only. Not for distribution to the public as sales material in any form. The content provided in this document is general in nature and is for informational purposes only. This information is not individualized and is not intended to serve as the primary or sole basis for your decisions as there may be other factors you should consider. Fidelity Investments does not provide advice of any kind. You should conduct your own analysis, review, and due diligence based on your specific situation. Third-party companies referenced within are not affiliated with Fidelity Investments. Third-party marks are the property of their respective owners; all other marks are the property of FMR LLC. Fidelity Capital Markets is a division of National Financial Services LLC, Member NYSE, SIPC. Fidelity Family Office Services is a division of Fidelity Brokerage Services LLC, Member NYSE, SIPC. Fidelity Institutional Wealth Services provides brokerage products and services and is a division of Fidelity Brokerage Services LLC. National Financial is a division of National Financial Services LLC, through which clearing, custody, and other brokerage services may be provided. Both are members of NYSE, SIPC. 200 Seaport Boulevard, Boston, MA FMR LLC. All rights reserved