Slideshow How Technology Is Challenging the Industry to Change

Published
  • November 05 2014, 4:16pm EST
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How Technology Is Challenging the Industry to Change

In the last decade, web and mobile technologies have upended a plethora of traditional business models. Now the financial advisory industry finds it too must adapt to these disruptive forces, learning new ways to communicate with clients as well as contending with digital competition in the form of automated, algorithm-driven robo advisors.


In a set of exclusive interviews, the industry's top executives shared their thoughts on how new technologies, and robo advisors in particular, are affecting firms and advisors. Click through our slideshow to learn more about their sharpest insights. Read the full story here.

John Taft, CEO, RBC-Wealth Management-U.S.

John Taft, CEO of RBC-Wealth Management-U.S., singles out robo advisors as the chief example of a technological catalyst for change in wealth management.


"If you look at other sectors of the financial services industry — for example, banking — you’re seeing extraordinary disruptive threats. Robo advisors just happen to be the current threat to our industry.


We have a brick-and-mortar, advisor-centric, high-touch advice model, which for decades has been the best way to offer holistic wealth management advice to affluent and high-net-worth individuals. What we have to do is to adapt that model and demonstrate the value that we provide to our clients."'

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Greg Fleming, president, Morgan Stanley Wealth Management

Greg Fleming, president of Morgan Stanley Wealth Management, argues that the digital experience of clients is and will remain critically important, both for firms and advisors. But Fleming also maintained that the financial advisor, supported by cutting edge technology, will remain the key lynchpin in client relationships.


"While the robo advisors will make some gains, we’re comfortable with our position with the advisor front and center, and as long as we offer as good a digital experience as any in the industry, our advisors won’t be disintermediated."

John Mathews, head of private wealth management, UBS

Despite technological changes, and the challenges that they sometimes pose for firms, the business essentially remains one founded on human relationships, says John Mathews, head of private wealth management at UBS.


"There’s just no substitute for conversations, especially when you’re in the advice business. Technology can enable conversations, but it’ll never be a substitute."

Mary Mack, president, Wells Fargo Advisors

Wealth management firms must introduce technology into the advisory practice, but it is important that new platforms provide the same tactile experience gained while meeting with an advisor, says Mary Mack, president of Wells Fargo Advisors.


"I think the real winners in the digital space will be those who create not a unique digital experience, but what we’ve begun calling an omni-channel experience. Clients aren’t looking for a substitute; they’re looking for an additive way to interact with Wells Fargo. So we’ve focused a lot on functionality in our digital experience. This next generation of investors is looking for an emotional experience. So how do we create a different experience online? How do we create an emotional experience?"

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Ronald Kruszewski, president and CEO, Stifel Financial

The generational divide is very much a technology divide as well, says Ronald Kruszewski, president and CEO of Stifel Financial. But despite the markedly different ways younger clients communicate with advisors and shun traditional services in favor of automation and apps, he still sees technology only as a tool.


"You have to be building businesses in the way you communicate with your clients, both with those who [are active online and those who] may not be as technologically savvy as a 20-year-old who can type 200 texts a minute. But I don’t believe it’s an arms race in technology because wealth management in our practice is still about understanding people, relationships, and getting to know your client and their goals. Last I checked, computers have yet to show the ability to show empathy or reason."