Six Financial Advisor Technology Trends That Will Reshape The Financial Advice Business In 2011

1. Specialized Advisor Apps To Rise . The rising popularity of online apps is creating opportunities for entrepreneurs that use Web Services to enhance core systems used by advisors. Why create another financial planning application when there are dozens already offered? Technology whizzes are instead focusing on creating specialized apps that can work with any financial planning app but offer a unique features or solution. For example, Omyen’s apps for advisors do not create full blown financial plans, but they offer advisors a way to a Sustainable Retirement Income Planner (SRIP) tool. Application Programming Interfaces, which allows one software program to access and make use of the services and data in another software program, is opening the way for apps to specialize in portfolio rebalancing and report writing by integrating with existing portfolio management software.  CRM systems will be integrating with apps that specialize in real-time collection of status updates and other social media data about your contacts.
2.  Social Media Marketing Will Go Mainstream. Social media marketing is currently used by a small number of advisors, many of who are primarily communicating with other advisors. That will change in 2011. It’s been a year since FINRA released guidance on how registered reps can use social media and BDs have begun tiptoeing into this area. Meanwhile, I am seeing a growing number of RIAs show greater interest in writing blogs and posting updates to LinkedIn and Twitter. I am also seeing advisors start to use Facebook for marketing. Moreover, I am seeing a growing number of top advisors—those with a history of success—utilize social media.
3.  More Mobile Apps. Orion Advisor Services, a portfolio reporting software system, is about to announce that it will begin to offer a mobile app to its users. Advisors will be able to view client reports on iPhone, Android, BlackBerry, and other smartphones. In addition, advisors can create their own mobile apps to allow clients to view their Orion performance reports. While I don’t believe advisory firm clients are clamoring yet for access to their performance reports over the smartphones, advisors who need to access this data all the time do need this convenience. Look for more apps to give advisors mobile access in 2011.
4.  Local Listings Will Be Discovered By Advisors. Few advisors attempt to optimize their online presence for search engines. However, with search engines becoming the place where people young and old turn for instant answers, search engine optimization is bound to become more popular this year—in particular, optimization for Local Listings. When you Google a term like “financial advisors” and add the name of your town to your search, what you see at or near the top of the results are Local Listings.     
5.  Transparency Transformation. The trend toward greater transparency in the financial services industry is inevitable. Search engines and social media are putting information that used to take hours of research at your fingertips in an instant. Whether you want to find stock mutual funds with low expense ratios or the cost of variable annuities, it’s on the Web. Advisors whose business model is based on efficient pricing and transparency will do better as this trend becomes more deeply rooted. The transparency trend is also changing 401(k)s.
6.  Custodians Will Become Open Architecture. T.D. Ameritrade recently released its Application Programming Interface (API) to some of its technology partners. The API allows third-party for portfolio reporting, CRM, and financial planning, as well as other advisor apps, to query TD Ameritrade's systems for data—for example, pulling a client's latest real-time holdings in a portfolio management program or displaying a client’s positions in his vault. While TD Ameritrade runs a distant third to Schwab and Fidelity in serving RIAs, the opening of its backoffice to advisor apps is a watershed in advisor technology and is likely to force other custodians to follow suit. A column I wrote explains the news in detail (and should be posted Monday) in the January issue of Financial Advisor.  


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