T3 Advisor Conference

7 Game-Changers from the T3 Advisor Conference

Industry focus. Relentless focus on gathering knowledge. A burning desire to stay up-to-date on the latest technology trends in wealth management.

These are all of the reasons that I spent the week in Fort Lauderdale attending the T3 Advisor Conference and did not go home early to be at the Eagles Super Bowl Parade. Forty years of disappointment, frustration and pain was set aside to focus on learning, tweeting and schmoozing.

I know, I know. You’re thinking how selfless and dedicated I must be to give back to the community like this.

I don’t want to rub it in, for those of you who had to deal with general Winter misery, the Florida weather was certainly an awesome benefit.

I have been a regular attendee at both annual T3 conferences, but this one was the biggest with the most attendees, almost 700, according to Joel Bruckenstein. The number of vendors was boosted as well.

You know that vendors must have been begging for sponsorships since Joel had to add another level above the Platinum tier!  Hopefully, this is a sign of a healthy, growing market for wealth management technology and services and not a peak.


Ric Edelman certainly knows how to grab advisors’ attention!  The co-founder and chairman of Edelman Financial Services, a registered investment advisor (RIA) based in Fairfax, VA, was the opening keynote speaker at the conference and did not disappoint.

In his rapid-fire style, he covered a wide range of technology innovations that will impact our lives and disrupt the way advisors think about servicing their clients.

Edelman, whose firm manages over $18 billion from 30,000+ clients, focused heavily on medical advances that will extend human lifespans.  “By the time you’re 95 you’ll be healthier than when you were 55,” he exclaimed due to improvements in healthcare.  I’m not sure if he was referring specifically to this audience, but it’s one thing to extend the average life span but quite another to do so and improve people’s heath as they age. That would be quite a feat.

This was the boldest prediction Edelman made, in my opinion.  I’m an advisor to a company developing blockchain solutions, so I am a believer in the underlying technology.  But I don’t see it being as much of a game changer as the advent of fire. Maybe a close second.

Blockchain certainly has received a lot more hype than fire ever did. Probably because the media wasn’t consumed with the 24 news cycle back in pre-historic days.

These stats were probably among the drivers of AdvisorEngine’s acquisition of online marketer Kredible. CEO Rich Cancro has a vision of his firm moving beyond just technology to help advisors grow they business by improving other key support services such as marketing and branding.

Since their revenue is based on their clients’ assets, facilitating their growth is a win-win.

This comment is certainly up for debate. Running a consulting firm, I see clients and vendors on both sides of this debate.  And they sometimes switch sides.

Riskalyze has been building out a wealth management platform that is laser-focused on a specific segment of the advisor market that prefers simplicity and ease-of-use over comprehensive functionality and complexity. Since they do not appear to be building an all-in-one product, relying on integration partners to deliver key features is an essential component of their strategy.

However, it has rarely been possible, in my experience, to deliver a seamless, elegant user experience through integration of disparate systems without some kind of overlay software.  Look for Riskalyze to continue trying to be the glue that hold together many other vendor’s products and control the advisor desktop presentation.

I’m not sure that this graphic will appeal to advisors or replace the standard correlation charts. But we need more innovative ideas in wealth management and it’s important continually push the envelope and be ready to pivot away from ideas that don’t work and double down on those that do.

My advice to every vendor giving presentations at conferences: We need less marketing fluff and more statistics!  In just the past four years the number of clients receiving comprehensive financial planning advice shot up from 33% to almost 50%, an increase of 49%!

As always, it was most likely a combination of factors that was lead by the Department of Labor (DOL) Fiduciary Rule. Advances in financial planning technology also helped as new entrants to the market like Advizr and RightCapital introduced more intuitive tools that have significantly reduced the time required to generate a plan.

63% of advisors say that lack of integrated technology is a challenge to financial planning.  It seems like this same problem has been going on forever and is not getting any better. Even with all of the advances in API’s and connectivty this is much higher than I expected. Especially considering that eMoney Advisor has been one of the leaders in building integration partnerships. (See The Battle for the RIA Technology Integration Hub)

Of course, they aren’t the only two vendors looking to control the advisor experience. It seems that every software provider is gunning for center stage. This includes CRM, financial planning, risk profiling, portfolio management and custodians.

Many of the banks, broker-dealer and RIA’s that we work with made this decision seemingly on the fly (before engaging us), with no strategic thought as to the future implications to their business.  My advice is for CEO’s to reign in the many competing stakeholders and enforce a decision-making process on the rebellious forces currently battling within the firm. Otherwise, you’ll end up with power-hungry fiefdoms that work against the best interests of the company.

Gamification is a buzzword that has lost a bit of its hype, but is sneaking back into many vendor’s offerings.  It is an excellent concept that can improve usability and elicit better, more accurate responses from both clients and advisors.

A few of the psychological underpinnings of gamification include: building an emotional connection, offering the freedom to fail and increasing user engagement.

MX has flown under the radar for the past few years as a provider of multi-sourced data aggregation services.  While they have presented at a few conferences, they keep relatively quiet and keep signing up major clients like MoneyGuide Pro and Fiserv Investment Services.

We’ve been waiting for this update to the cloud version of Morningstar Office for a while now. The integration of their recent acquisitions, ByAllAccounts and TRX Portfolio Rebalancing, should give the iconic advisor application a nice boost in functionality and could help fend off new entrants in the space such as AdvisorEngine, RobustWealth and Oranj.

Advisor Strategy Tax Return Optimization (ASTRO) is a powerful portfolio optimization tool.  While I was impressed with the functionality as they described it in their presentation, I was not impressed with the presentation itself.  The message was muddled and the product benefits and ease of use were not satisfactorily explained (in my opinion).

I tweeted almost the exact same thing as Orion did, but I think my picture was way more interesting.

All this for just $50/account/year? Seems like an incredible deal!  But does ASTRO really do everything that a $250K application does? And do most of Orion’s clients have the same needs as CLS Investments when it comes to portfolio analytics?

My take on these:

  • Event-triggered smart contracts – Not going to be as big of an impact. A “smart” contract is based on software and is only as “smart” as the programmer who designed it. When a traditional contract contains an error, the parties can go to arbitration or to court where a human can review the claims and decide. An error in a smart contract is a software bug that can trigger immediate and unintended consequences. This was demonstrated late last year when a programmer accidentally deleted some code that allowed funds to be transferred out of a digital wallet. This resulted in $300 million worth of Ethereum being lost forever.
  • Increased back-end efficiency – Since when is increased efficiency disruptive? What startup founders pitch VC’s by boasting of the increased efficiency of their app? Certainly nice to have, saves some money but not a game changer.
  • Disintermediation – This only applies for true distributed blockchain solutions, almost none of which include those being developed by banks or insurance companies. The sharing economy is ripe for disruption as a few centralized networks, such as Uber and Airbnb, currently control vast swaths of the market. Imagine a blockchain version where drivers and riders can connect independently and the driver gets 99% of the fare (instead of the 70-80% like they do now). That’s disruptive!  (Take a look at the Bee Token, for an example of how this might work)
  • Better pricing and assessment of risk – Again this is not a decentralized blockchain solution, but one that is being pushed by insurance companies.  When centralized players are involved, there’s no guarantee that they will develop better prediction models or do any better at assessing risk. Humans have a poor track record in both areas.
  • New products, reaching undeserved – Absolutely! This is another area that could be disruptive. Billions of people around the world are under-banked and under-insured and under-everything financial services-related. But 90%+ of them have access to a mobile phone. Companies such as Veridium and Wala and bringing zero-fee banking to sub-Saharan Africa. One cool piece of technology they have developed can identify a customer by their fingerprints using the phone’s camera!
  • Increased transparency – Only for distributed blockchains that are not controlled by an existing financial institution or government.

Check out my new blog, Blockchain Today, if you’d like to read more about the space.

I spoke with LifeYield’s CEO, Mark Hoffman, who explained how they coined the term “taxficient” to avoid legal issues that could arise from making claims about the tax efficiency of their software. Now they can report on the “percentage of taxficiency” without running afoul of regulatory or overzealous plaintiff’s attorneys.

Any vendor that is looking to up their cybersecurity game should reach out to FCI Cyber for their managed cybersecurity and compliance tools.  (See Is CleverDome the Holy Grail of Cybersecurity?)

If your platform cannot provide you with real-time stats on client logins, you need to be looking for a new vendor. This type of monitoring will be critical for advisors to maintain their client relationship during periods of increased volatility.

In other words: Fidelity’s advisor workstation was about a decade behind in data aggregation and is finally catching up thanks to the eMoney acquisition.

Clearnomics has some very descriptive charts that advisors can use to initiate conversations with clients and make it easier to explain current market conditions and show them in relation to past years.

Why do young people insist on learning everything the hard way?  It took me a while to realize that my business was not going to grow the way I wanted to without a conscious and organized client management process built around a CRM.  The 77.56% of 1-5 year advisors who don’t use CRM will soon learn this lesson as well.

Last year, Cetera added a facial recognition tool to their advisor technology stack that can help decipher clients’ emotional state. It is only one tool though and advisors should use the data along with what they already know about their clients when managing their client relatrionships.

I don’t think this is too far off the mark as far as disruptive future technology goes.  We’re learning more about how a person’s DNA can indicate susceptibility to future diseases.  How soon will life insurer’s require a DNA test before issuing a policy?

I really like Asset Map’s presentation and I was bugging Adam to get the consumer version running. I want to plug in my Vanguard accounts.

Happy to see T3 and many vendors sponsoring college student contest to develop new wealth management applications.  This chatbot allows clients to check their portfolio balance and ask questions about the market. It was integrated with the Orion Advisor platform.

United Capital has developed a well-received suite of applications including Money Mind Analyzer, Honest Conversations and Guidebook that deliver an intuitive, infographic-rich client experience. (See The Indispensable Advisor by Joe Duran)

While I do love statistics, there also needs to one some context around them.  What is the difference between a ranking of 8.12 and 8.07, besides .05?  Is it weighted based on the total number of advisors or assets?  Is it a fair comparison between Schwab with $1 trillion in AUM and Cambridge with $120 billion and how many advisors responded from each?

This is just plain shocking. Every survey I have seen has Wealthbox in the single digits.  They suddenly jump to 23%?  You use compare number of firms as an indicator of market share. It has to be number of advisors.

Michael makes an excellent point here. I would suggest future surveys use a random sampling of advisors instead of self-selection.  Right now we only know which companies sent out the most emails to their user base with a link to the survey.

You know what they say about all work and no play.

T3 Advisor Conference

I felt that this conference was one of the best that Joel has run based on the number of attendees, breakdown of advisors versus vendors and quality of speakers. Everyone I spoke to had nothing but positive feedback, with the exception being the long lines we had to wait in for the craft beer tasting.

As I was reviewing my notes from this year’s T3 Advisor Conference, I realized that I have so much content, I can write a few more blog posts that focus on specific speakers and sessions.  I had to keep stopping myself to write too much in this post, since I wanted it to be a quick summary.

If there is anything that you saw here that you would like a more detailed article about, please let me know at craig@ezragroupllc.com.




The Wealth Tech Today blog is published by Craig Iskowitz, founder and CEO of Ezra Group, a boutique consulting firm that caters to banks, broker-dealers, RIA’s, asset managers and the leading vendors in the surrounding #fintech space. He can be reached at craig@ezragroupllc.com