Advisors have been bombarded with warnings to embrace a digital practice in order to stay relevant, but they just need to take one step right now, says eMoney Advisor CEO Ed O'Brien.
"You don't have to sit back and wait for someone to drop a full end-to-end digital solution," O'Brien says. "Most advisors today are really looking for how to just introduce their clients to a way that is more engaging through technology. That is step one of a digital practice."
O'Brien speaks as the newly minted head of eMoney, having moved over from Fidelity in March after it acquired the financial planning technology firm last year. He wants to engage the advisor resistant to change.
Take the debate over whether advisors are better off using Excel spreadsheets to develop plans for clients or plugging into planning software such as eMoney.
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"It comes down to the degree of which you are so set in your own ways of doing things, that you're not willing to trade off any of them for the benefits of scale and a far better technology experience for your clients," O'Brien says.
"There are always going to be the folks holding onto Excel because of something that is so unique in the way that they do it. We have auditors certify our Monte Carlo analysis. I am not sure that a lot of advisors can make that claim on any of the tools they're building in Excel."
Material benefits gained in a shift toward a digital practice are another factor for advisors need to consider, O'Brien adds, particularly for succession planning.
"Good technology to work with is attractive to the younger advisors coming in," he says. "You show them a file cabinet and they aren’t interested."
COMPETITIVE MARKET
O'Brien's tenure at eMoney starts as a number of digital tools and platforms jostle to stand out in an increasingly competitive market.
Large institutions such as UBS and LPL are the latest to embrace digital advice platforms and encourage advisors to incorporate them as tools for their practice. Custodians have also branched out their digital options available to advisors. Meanwhile, the market for digital tools, whether as standalone software or within an advisor portal, has become an increasingly competitive one.
In Financial Planning's latest annual tech survey, eMoney came second among RIAs utilizing financial planning software only to MoneyGuidePro. Since its acquisition by Fidelity, eMoney launched another version of its platform, emX Select, which the firm says has provided new business as home office executives seek to deploy the version across an entire firm.
The Labor Department's new fiduciary rule has also spurred more enterprise interest in the platform, O'Brien adds.
"[Firms] are coming to us, wanting to solve for how they think about the future of planning," he says. "It doesn’t change the product as much, it's just the home office wants supervisory controls to see what each advisor's books of business looks like and be able to manage it. We have an analytics dashboard that allows the home office to look across those books of business of the underlying advisors and it gives them a really good full view into what's going on."
END CLIENT EFFICIENCY
Though automation available to advisors has increased, whether in planning or client onboarding, there are still more efficiencies that can be gained, O' Brien says.
"Efficiency is not just for the advisor of the home office anymore, but also efficiency for the end client. A lot of people these days are valuing the timeliness and efficiency for which they can get what they need."
The firm strives to remain agnostic about serving the needs of the industry, he notes.
"It's important at eMoney that we know our place in the ecosystem. If we're working with a broker-dealer with their own advisor portal, we're not looking to displace that, but instead how to become an effective piece of that desktop."
"Would we like every advisor waking up in the morning and turning on eMoney? Yes, but we are realistic," O'Brien continues. "When you have the broad swath of financial services companies that we serve, there are money managers in there, there are financial planners, there are family offices, broker-dealers, home offices… the more important thing is to make sure that we fit into the ecosystem in a way that is driving efficiency, and most importantly, driving engagement with their clients through technology."
