Poll Reveals Most Financial Firms Seek to Use Robo Technology to Complement Existing Service Models

Wakefield, MA – January 24, 2017 – Vestmark, the leading provider of Unified Wealth Management® solutions, today released poll results captured during a recent webinar, The Robo Advice Solution: Creating a Fully Integrated Platform, exploring the urgency for automated advice platforms in light of the Department of Labor’s (DoL) conflict of interest rule. Feedback shows that nearly half of firms participating in the poll have consolidated their advisory platforms and consider robo technology as a complement to their existing service model in light of shifting regulation and evolving investor demands.

In 2016, the impending DoL Fiduciary Rule drove many firms to re-evaluate their operating models. While the implementation of the rule is a moving target in 2017, firms should remain focused on redefining their operations to ensure a positive investor experience and streamline compliance with regulation. Webinar panelist, Brendan McConnell, COO of Brinker Capital, stated in agreement, “Regardless of what happens to the fiduciary rule, the defining features of robo advice—such as low fees, high levels of transparency, and the lack of an overt conflict of interest—will be key to staying on the right side of regulation and client sentiment going forward.”

Participants were asked for responses during a live webinar last month, attended by 150 asset managers, consultants, broker dealers, RIAs and other financial firms. Highlights from respondents include:

• 51% have already consolidated their firm’s advisory programs while 49% have yet to do so
• 13% believe the DoL ruling will be repealed by the new administration, 44% believe the ruling will be delayed, and 43% believe it will not be impacted
• 89% believe the emergence of robo advisors will impact their firm while 11% believe they will be unaffected by it
• 70% feel their firm is embracing robo technology as a complement to their existing service model

Wealth managers are faced with the challenge of meeting the current and future investment needs of their clients while scaling their business and minimizing operational risk, especially as they prepare for DoL compliance. As the proliferation of robo solutions grow, the industry is shifting towards digitally augmented advice or the combination of traditional advice delivered by a financial advisor with a flexible suite of digital capabilities. However, no matter the form they take, these digital advice solutions possess a range of operational implications, leading firms to rethink their business model and consider consolidating their platforms.

“Despite advances in product and account functionality, wealth managers still use multiple technologies, which often lead to competing product stacks each with its own fee structures. This is problematic for an advisor working to meet compliance standards in the upcoming year,” said Will Trout Senior Analyst at Celent

“Advisors realize they need to adapt their business models in order to remain competitive and survive in the age of robo solutions,” said Rob Klapprodt, president of Vestmark. “Blending their core competencies with new tools and technology as they embrace the robo trend yields more consistent advice, improves operating efficiency, and minimizes risk using aconsolidated platform. Furthermore, firms could face a dilemma if they have a siloed robo program that’s not fully integrated into their offering as they consider compliance and oversight across their advisor teams and client relationships.”

Panelists of the webinar included Celent Senior Analyst, Will Trout, Brendan McConnell, Chief Operating Officer of Brinker Capital, and Vestmark’s president Rob Klapprodt. This online event was attended by over 150 registrants spanning asset managers, banks, broker dealers, independent RIAs, insurance providers, consultants, and robo advisors.

A full recording of the webinar and a copy of Celent’s white paper, “The Integrated Platform: How Digital Technology is Reshaping the Wealth Management Landscape,” can be downloaded from Vestmark’s website.

About Vestmark

Headquartered in Wakefield, Mass. and founded in 2001, Vestmark is a leading provider of portfolio management solutions and outsourced services for financial institutions and their advisors, enabling them to efficiently manage customized client portfolios through an innovative technology platform. Supporting over $1.5 trillion in assets and 5.5 million accounts, Vestmark is a partner to some of the largest and most respected wealth management firms. For more information about Vestmark’s solutions, call (781) 224-3640 or visit www.vestmark.com.

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