Ep. 230: Embracing the Future of Advisor-Centric Technology with Greg Gates, LPL Financial

Come on in and sit back and relax. You’re listening to Episode 230 of the WealthTech Today podcast. I’m your host, Craig Iskowitz, founder of Ezra Group Consulting. This podcast features interviews, news and analysis on the trends and best practices, all about wealth management technology.
My guest for this episode is Greg Gates, the Chief Technology Officer of LPL. There’s a lot of things we’ve covered in this episode. Some good topics I thought, we spent a lot of time on AI, because it’s just the thing to talk about these days. I was very interested to hear what LPL’s position on AI is and some of the things they’re doing and Greg was kind enough to share some of what they’re working on some things he held close to the vest, but I think we learned a lot about their position on AI. We talked about integrations and their platform strategy with ClientWorks of course, we talked about ClientWorks, and then you rebalancer, which is the acquisition of Blaze Portfolio they acquired in 2020, that that’s becoming the new rebalancing tool. Greg talked about the pilot and when that’s going to be rolled out.

But before we get started, let’s talk about tech stacks. At Ezra Group, we’ve seen tech stacks of hundreds of RIAs and let me tell you, most of them are loaded down with tech debt. So you shouldn’t feel too bad about yours. But let’s face it tech debt is like a giant anchor, holding back your business growth. If you want to free your firm for exponential growth, you should run, not walk to our website EzraGroup.com and fill out the Contact Us form. Our experienced team can evaluate your current tech ecosystem, deliver targeted recommendations, optimize your existing systems and operations or run an RFP and help you implement new software to take your firm to the next level. You can take advantage of our free consultation offer by going to EzraGroup.com.

Topics Mentioned

  • AI in Action
  • Empowering Advisors with AI
  • Seamless Integration
  • ClientWorks Evolution

Episode Transcript

Craig: All right, next up on the program, I’m happy to introduce Greg Gates, Chief Technology Officer of LPL Financial. Hey, Greg, thanks for being here.

Greg: Thank you for having me, Craig. I’m excited about it.

Craig: I’m glad we could fit some time into your busy schedule. I mean, you are the CTO for the largest independent broker dealer in the country. Congratulations.

Greg: Thank you. We don’t like to congratulate ourselves on that. I think what that means is, we’re doing a good job of adding value to advisors, institutions, and we seek to continue to do so and I think the growth will probably continue to follow.

Craig: You’ve got more advisors to add value to with your recent announcement acquiring of Atria.

Greg: We’re excited about that. Atria is a great firm and they’ve done some very interesting things in their technology, CRM integrations. They have very similar to ours a commitment to independence and choice in the platform. They’ve also done a good job of integrating capabilities and so we’re excited about that acquisition and we’re excited to onboard them a little bit later in the year.

AI in Action

Craig: You guys are an onboarding machine. I gotta tell you, it’s impressive. But let’s jump in. So we’ve got a bunch of things to talk about, and we have very little time so first thing on everyone’s mind mega trends in the industry. And the biggest mega trend we’re seeing now is artificial intelligence. So what’s LPL is take on AI, is there anything talked about features functionality applications, you guys are rolling out or looking to roll out for your advisors?

Greg: Absolutely. It would not be a technology discussion in the year 2024 without a discussion of AI. We talk about it a lot. And I think there are a couple of things just to set some context number one, I think the introduction of ChatGPT in November of 2022 made AI an everyday conversation for everybody. Of course, we’ve been in AI for a while. I’ll describe a little bit of what we had been doing and what we’re doing now.

Greg: In the past, we’ve used AI to generate insights on our data. We introduced something called the Practice Hub to give advisors an ability to see in their portfolio, and those are more like traditional data products. And give an advisor or an institution insight into their practice. We also used AI to look at how to streamline our operations. So it was more like I’ll say internally focused in the past so that we could run a more efficient and scaled operation.

Greg: I think the big change that you see here with AI and specifically what what ChatGPT and large language models have been able to provide is it’s a democratization of access to AI. So now you have advisors who can experiment with Hey, how do I generate content more quickly and at a higher quality? And that’s just sort of scratching the surface.

Greg: We believe that AI is a very significant trend for the wealth management industry. We believe it will be a wonderful assistant to advisors. And I think we would reconfirm that we believe our vision is correct, we want to be the company that is the most advisors centric in the wealth management industry. And so we’re focused on building tools, or enabling tools that help advisors either be a great advisor to their client, or help institutions or advisors run more thriving businesses. And so things where you can apply AI and sort of those categories are, I mentioned the content thing, how do you get better at marketing? Are there some next best action type items that she could do potentially with the internally we’re very much focused on how to streamline operations, how to serve our advisors or institutions the way they do a wonderful job of serving their clients every day.

Greg: We want to apply AI in those contexts as well. So that we provide a higher order services and assistance for employees who serve advisors or Institute. We could probably go on and on about a number of different AI solutions. I don’t want to give it away a little bit early. We’re focused on piloting with a number of advisors, some concepts, and then as soon as we believe that we have one that offers differentiated value, of course we’ll deliver it in the market.

Empowering Advisors with AI

Craig: Can you describe what those concepts are generally?

Greg: I think they are around how do you help an advisor save time in their day? Number one, if you could help an advisor, be more engaged with their client on a regular basis, and feel a sense of caring for that for the end investor to feel cared about from their advisor, what are the things that you could do, you could auto draft emails, moments that matter at scale. There are some tools that I think we will look at, to help advisors be more present with their end investor.

Greg: We will also be looking at how do you how do you streamline your work in the middle of the day so a lot of advisor time goes into preparing for meetings, we released a product called Meeting Manager a couple of years ago, which is very successful. AI is another set of tools that make the preparation and the execution and the follow up from a meeting much more streamlined and automated, and save again, saving and advisor time. So they’re well prepared for the meeting but also without as much prep.

Greg: If you look at some of the services that we could offer advisors or institutions, the ability to benchmark themselves identify actions that they could take to run a more thriving business. We offer as as a wealth management firm, a huge variety of products and services that that advisors or institutions could take advantage of, but every practice is unique. And so you could use these tools to help advisors or institutions navigate that list of products and so that they take advantage of the best that we have to offer and and run their version of a perfect perfect practice.

Craig: Greg, you’ve covered a lot of ground. That’s helpful and insightful into where you’re going with AI. I have two topics to bring up to you. One is more positive, one’s more negative. So on the positive side with AI, and we didn’t talk about this when we were prepping so I see AI as having a very positive benefit across firms such as yours we’ve got you will have 25,000 advisors soon, once Atria comes on board, which means you’ll have a very wide range of capabilities across that advisor base. It’s just natural, right? So you’ll have the top 10% that are super empathetic, great with clients just know exactly what to say the right thing at the right time. Because that’s just the kind of human beings they are.

Craig: Then you have the other 90%, maybe the other 80% that are sort of mid range than the bottom 10% that are terrible. I see AI as being able to provide advisors, as you mentioned, being more engaged and more present but also giving advisors what to say like hey, this client you should tell them this, this client is this kind of person they want to hear these words from you, or this person just had this event, you should say this to them. So it’s going to level the playing field when it comes to empathy. And as you mentioned, make advisors be more engaged but also make clients feel more like their advisor is engaged. Do you see that as a possibility?

Greg: Absolutely. I do. And actually there’s, I’m not sure it’s totally published research yet but there is, as you would expect a lot of ongoing academic research on this very topic. And you’re right because the largest language model is scouring the best, most logical, mathematically logical suggestions for what to say next, you can essentially model a very empathetic and influential conversation and the tools are very good at it such that they do influence human behavior.

Greg: First of all, I think it’s a reason why I think where you’re going on that the positives and negatives of this capability. It’s another reason why we believe you want to put the advisor at the center of the interaction. I don’t think that we ever want to replace or compete with an advisor for any of those conversations because the advisor it’s first of all, it’s the advisor institutions business in practice, not number one, number two, human judgment is still required. At the end of the day, what we’re trying to do is simplify or make easier the ability for an advisor to be a great advisor, but you don’t necessarily want to make every interaction like every other interaction either. Right? There is a differentiation that the human does provide under these circumstances. And so we want to, we want to offer it as options for the advisor to choose from, but I don’t think that we ever want to take the place to the advisor and those interactions. Because, number one, the language is quite influential. And to leave we do believe human judgment is required at the end of the day. So I don’t think that we have an intention for like auto deciding things or anything like that. Our goal would be to empower the advisor with information.

Craig: Now the dark side, Greg, so do you have any plans for next best actions, that’s a common usage for AI and machine learning and predictive analytics. We’ve already seen some limited usage of it, providing tremendous value. And what point does it become too much where you’re giving advisors date, minute by minute, things that they should be doing every step of the way? Because your data is showing? Here’s where the benefits are advisors who follow this specific written script every day that we give you who to call, what to say, when to do this, when to do this are much more successful and the advisors become more like Uber drivers.

Greg: Well, first of all, I think I would just go back and reiterate our principles of independence, right so we’re we are trying to empower advisors to run their version of how they want to serve their clients. I don’t think that we’re like some of the other firms that are going to be so directive in the experience. We do, obviously have a heavy amount of investment in our underlying data platform, which includes analytics and offering of suggestions. We’ve piloted those in our practice have recently and we are expanding the number of them, but I’ll just reaffirm, we believe in choice.

Greg: So we are putting those suggestions in the place where the advisor has already chosen, I want to go look at something is there ever there is there a place where I can take advantage of some options to run a more thriving business? Are there things that that I may or may not be doing that I could take advantage of from a services perspective? Or are there things that I should be doing or should be thinking about.

Greg: We want to pilot those good advisor feedback? Are the insights actually relevant to their practice, if they’re relevant, we want to make sure that they’re high quality, and of course they’re high quality. We want to put them into the place where the advisor is wanting those insights. The worst thing that we could do is start peppering an advisor in the middle of a conversation that they’re having with their client. We don’t want to disrupt that conversation. That’s one of the most sacred and important interactions right that we need to protect is that human human interaction then an advisor has with their client. We want to place those insights into the pieces of the solution where they’re likely to consume it and want to consume it, right and so if you go back to adjust our vision and our principles, that’s what we’re about. We want to empower advisors to run their version of their perfect practice, and take care of their clients the way they see fit. And so we will work with advisors and we’ve got a whole bunch of different affiliation models and a great variety of input. But we’ll take all that input and we’ll place the insights when they’re relevant and high quality in the place that the advisor wants them as opposed to sort of pushing it on advisors.

Craig: So we’ve burned half this episode on AI, let’s move on to the other topics like integrations. Now, LPL of course, you’ve got your ClientWorks platform, you have a tremendous number of applications that are integrated. We’ve talked about this with other executives on this podcast, but you want to talk more about how you curate your choices and the opportunity to improve quality.

Greg: So I think first of all set some context because we’ve been on a journey here as a firm, right? We’ve wanted to add the best technology in the industry and put it in the hands of advisors. And so we introduced something called the ClientWorks connected platform a few years ago, which gave it access into the LPL ecosystem for a number of third party technology providers. That was a big advancement for us as a firm and I think where I would say we’re at right now is LPL technology is essentially an operating system with optionality to incorporate third party systems. And the important part is to make sure that we have data flowing back and forth between LPL and any third party that’s out there.

Greg: We create the most connected experience possible for advisors, when we do that, and make sure that we have bi directional integrations that create scale and efficiency for them and make sure that there’s a natural connectivity and handoff between all of those applications. When we looked at third party technology, or do we need to build something for ourselves what we’re always seeking to understand is, are we going to solve a pragmatic problem with with the integration. So again, is there a capability that we need to add another platform or make available into the platform so that an advisor could serve their clients better? Is there a deeper integration that we need to have so that they don’t have a lot of swivel chairing, or data quality issues or that lack of a strong bi directional integration? We’re always looking at a couple of different things, what’s the strategic relevance of the capability what’s best in class, how do we offer best in class, but offer it not just as a like you have a single sign on into the platform, but in a way where information is actually flowing back and forth in a connected ecosystem.

Craig: I like that you mentioned that you see it as an operating system. So that’s something I’ve been trying to come up with a good term for applications like ClientWorks, which is an end to end platform. I wanted to use the term enterprise resource planning, right? It’s like an SAP for advisors. It’s got the end to end everything you need to run your business but not like an advisor resource planning advisor OS I’m trying not to come up with some name for that.

Greg: If you come up with a good one, we’re not too proud to take it Craig. Yeah. We talk about it internally as our next generation operating platform, actually, and where we want to be focused is how do we integrate experiences that either we might build or third party tech that’s out there? How do we operate something that is incredibly advisor centric, it’s well articulated. There’s not a lot of or experience for number of clicks or I mentioned the swivel chairs or flipping between screens, or multiple entry in the same data. We want to take advantage of our ability to integrate all of these experiences and then offer a deeply integrated ecosystem. And when I say integration, I mean vertical integration. Take advantage of the fact that the fact that we have wonderful custodial capabilities.

Greg: We have a wide range of affiliation models that allow an advisor to structure their practice in any way possible, that they need to structure their practice and an offer unlimited or unrivaled flexibility in the industry. And with that wide range of affiliation, models and capabilities. We want to make sure they never had a disjointed advisor experience. And so the platform that we’re focused on is an experience platform, right? We don’t, we don’t have to build everything ourselves. But what we have to care for is that it feels like a well articulated and well-joined together ecosystem.

Seamless Integrations

Craig: One aspect of your your company that I thought was impressive was your UX team. I’ve gotten to spend some time with them and see them in action as he walked through new account opening, and they were counting the number of clicks and the number of screen scrolls and trying to reduce that. Can you talk a little bit about that and what how you see that fitting into your strategy for ClientWorks?

Greg: First of all, absolutely we’re proud of that team. We do have a very mature user experience and user design, team and what we do is we look at it strategically, what are we trying to accomplish? And then we we have the benefit of a large number of advisors who want to be giving of their time and give us feedback for how to design a great solution. And so what we’ll do is we’ll have conversations with with those panels of advisors. And we look at to your point, how many button clicks are there? How much are they scrolling? Where did their eyeballs go on the screen? We asked a number of questions like Is this useful, as intuitive? Where do you need help? Make sure that help is is in the experience instead of forcing anybody to navigate away from help.

Greg: We want to use the power of the community that we’ve built to drive differentiation and a simple experience wherever possible. This industry has a lot of complexity to it. And there are a lot of a lot of rules to follow a lot of complicated processes, some of which are not a call it single act or simple one click type processes, sometimes you have an age or a workflow to some of these processes. What we want to design is the best articulation of this streamlined process. So and in the example that you gave around account opening or we’re in the middle of of rolling out a revised revision to our money movement processes, similar sort of a mindset. We’re looking to take away as many steps as we can, because if you can reduce the amount of complexity and the process that people are following, it saves you time saves you heartburn and how to service or handle operational issues that might result from that complexity later on.

Greg: We’re trying to ask only the questions that we need to ask or capture the information we need to capture to complete the task. In the moment. A lot of processes in this industry were built, where, like right up front, I’ll ask you every possible question that I might ever have to ask you. So that the account doesn’t get an aggregate or something like that. And what we’ve had great success on and industry leading, or industry low now go rates is if you only ask the questions in the moment when it’s needed. You take a bunch of friction out of the system. And you’re you’re making sure that you’re capturing it at a high quality the information you need so that the count isn’t isn’t good order. The transactions are successful. And you have an ability to do straight through processing with automation, as well. So we’ve been able to take a lot of time out of out of the day of an advisor of some of those administrative tasks. And like I said, some of the things that we’ll do a little bit later this year around money movement. 

Craig: And speaking of integration, so wanted to talk about acquisition, you made one of the few acquisitions you made and back in 2020 when you acquired portfolio rebalancing engine, Blaze Portfolio, how’s that integration going and how what would have converted expect to see with how portfolio rebalancing is handled inside ClientWorks?

Greg: We’re excited about it. I think honestly, it’s taken us a little bit longer than we would have wanted to fully released all of the capabilities. But I think we’re feeling very, very good about where we’ve been. In truth, we could have gotten to market faster, but we want to hold ourselves accountable to delivering a great and useful experience. And so a little bit about Blaze. Blaze is a great technology that allows advisors to initiate rebalancing actions. There are a number of products out in the market, we believe Blaze offers a great set of features.

Greg: What our strategy has been with Blaze is to make sure that it’s embedded within the operating system of ClientWorks. So one of the principles was don’t ask an advisor to swivel chair. If I want to rebalance my portfolio I want to see all those trades showed up right away in my advisor workstation. And a lot of the tools in the industry work, where you can go to the rebalancing technology, you can submit all your trades you can see the updates in there in real time. But when you want to bring it back, you have to wait for like a nightly batch for something to run out before you see all those positions updated.

Greg: So what we’ve been working on is all of the underlying foundational items that you would need to have to make sure that you could select a thousand trades and go ahead and submit it and and make sure that all of the show up in real time in the advisor workstation so that you avoid errors hey, do I have the right amount of cash in the account, etc. I’m not comparing two systems if there’s subsequent actions I want to take in the day. So that was the underlying principle that we’re trying to achieve.

Greg: You mentioned the UI/UX team. We’ve had them working on this from the very beginning. What we’ve been working on with our pilot users of of ClientWorks rebalancer is is it simple, is it intuitive, does it save you time, and we resisted the scaling of the solution until we had the foundational scale built correctly and he experience feedback we were getting from advisors was outstanding. And so now, we have about 800 advisors on the platform. In our final wave of our pilot, and we are based on their feedback ready to start our national rollout now in the spring, because the feedback we’re getting from them is it saves them a huge amount of time when they go in, to rebalance a portfolio you know we hear a quicker acceleration the what used to take them five or six minutes now takes them less than a minute. We offer it at a better price point. Now and and so it’s a differentiating capability that we’re excited about and we will start here very, very shortly here during the spring and then roll out over the next year to everybody that wants it on the platform.

Craig: Great to hear I mean we have followed Blaze Portfolio for many years I know Bryson, visited in his office in Chicago. One of the things I liked about his platform was that it was built on top of an OMS it wasn’t a rebalancer that then plugged into an OMS, he built it on top of an OMS I think that gave him some better capabilities for advisors who are a little bit more focused on weather trading.

Greg: Absolutely. And it gave us an opportunity to redesign our OMS. Ultimately because, and this is where some of these capabilities when you add them, first we are focused on the rebalance or better, OMS applies to all trading.

Craig: It’s got to go somewhere. You can’t generate an order without sending it somewhere, right.

Greg: That’s exactly right.

Craig: That’s good to hear. So 800 advisors in the pilot, it’s an aggressive pilot.

Greg: Like I said it’s the final our final wave of our pilot now and and the feedback is tremendous. And so we are now getting ready for our first wave of national rollout.

ClientWorks Evolution

Craig: We’re almost out of time. Can you share regarding ClientWorks, I know you don’t want to say what version number, I was very focused on the version numbers because I’ve been following ClientWorks since this came out. But it’s I’ve been following so no version number. The next iteration of ClientWorks. What are we going to expect what’s coming this year down the pike?

Greg: This year, I think what you can expect are a couple of things. First, if you could think better checking rebalancing products as well as e-signature capabilities. Anything that you would do over the next 12 months to improve. How much time do we set even the platform for advisors. Over the past couple of years we’ve been focused on making sure the platform is comprehensive. It has all the capabilities that you expect it to have. It’s a single location to access all client account types, data streamlined, etc. But going forward for the next 12 months, some of the things that I’ve mentioned already. It’s better move money capabilities, the ClientWorks rebalancer national rollout, e-signature capabilities, continuing to iterate on how do we present information simply in the variance so that advisors aren’t having to find it all the time. We talked about AI at the beginning, we are going to look for ways to incorporate that in the mission of how do you help an advisor, be a great advisor albeit, better products and services that they might offer better touch points or easier touch points CRM integrations etc., or help them to understand what they might be able to do to run a more thriving business themselves.

Craig: Greg, you’ve said it all we appreciate everything you share with us. Where can our listeners find out more information about LPL Financial?

Greg: I certainly can check us out on lpl.com. If anybody’s interested, I’m an easy person to find. You can find me as well on LinkedIn or anywhere. We’d love to engage with anybody who has some ideas on how we can improve and serve advisors and institutions even better than we do today.

Craig: Fantastic. Greg, thanks so much for being here.

Greg: Great. Thanks for having me.



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