As compliance becomes a greater burden for advisors, and clients expect more user-friendly interfaces, wealth management firms are investing in tech. Here are three fintech partnerships helping advisors manage investments, financial planning and compliance.
Canaccord Genuity Inc. enlisted U.S. wealth technology firm Envestnet, Inc. in March 2020 to provide advisors with a unified managed account (UMA) platform.
Nearly two years later, the UMA platform has been “a real time saver” for advisors, said Stuart Raftus, president of Canaccord Genuity Wealth Management in Canada.
“You can imagine trying to maintain a certain weight of an individual security within a portfolio. Let’s say you want to keep it to 6% and it’s reviewed on a monthly or quarterly basis — this can be done automatically, and in the background, so that your portfolios are always within the ranges that are in keeping with your investment policy statements,” he said.
The UMA platform provides advisors with “one snapshot” of their clients’ holdings instead of having to pull up each account individually, Raftus said. An aggregation component will give clients the option to let the system collect information about their accounts at other institutions, giving advisors a full financial picture, he added.
The platform allows advisors “to do what they do and remove a lot of paper and administrative time,” he said. The option for model-based trading in managed accounts, for example, saves advisors from manually entering trade orders.
“Changes to models can be applied to literally thousands of accounts in a matter of seconds,” he said.
Sun Life Canada’s partnership with Winnipeg-based Conquest Planning is also a time-saver for advisors, said Hilda Tang, vice-president of strategy and enablement for Sun Life Financial Distribution.
Conquest can move client profile and account data from a firm’s customer relationship management system directly into its financial planning tool.
“That allows advisors to immediately advance toward the planning work versus trying to have them re-key [in] information from different systems,” Tang said.
The partnership with Conquest plays into the firm’s strategy in 2022 to create “digital-enabled advisors,” she said.
“We believe that digital plays a core role for advisors to build and grow their business,” she said. Leveraging digital technology can deepen the client relationship and engagement, Tang added.
Conquest’s planning tool uses calculators and sandbox scenarios to help clients consider different life events and adjust their long-term plans. Clients can test a range of “what if” scenarios: What if I live longer? What if I have lower-than-expected returns on my investments? What if I want to retire earlier? “That interactive engagement is really valuable to advisors because it creates that closeness and deeper relationship with their clients,” Tang said.
Keeping track of funds
IG Wealth Management partnered with Toronto-based CapIntel to help advisors keep tabs on investment funds. The program knows which funds IG clients hold in aggregate and sends daily lists of fund changes — risk ratings, investment objectives, fees, mergers, etc. — that IG cross-references against client holdings. The firm then posts notifications specific to each client in advisors’ “required actions” dashboard, said Brent Allen, head of strategy and business operations at IG Wealth Management.
“The list the advisors get are 100% personalized for them and their clients — they only receive notifications that impact them, making it very efficient,” he said.
CapIntel also lets advisors check a client’s risk profile against both their existing portfolio and any recommended changes. The platform’s database has North American ETFs, mutual funds and individual equity securities, plus major indexes for comparison, Allen said. When a proposal for a client is created, it’s added to a “compliance journal” and copied to IG’s advisor portal.
The “automatic importing of data, single-click comparison to reasonable alternatives and auto-journaling will save advisors hundreds of hours every year of what used to be highly manual work,” Allen said. “It ensures we are exceeding minimum requirements for compliance and elevates the client and advisor experience.”