The Evolution of Professional Software for Advisors

I’m walking through the T3 exhibit hall, enjoying that “kid in a candy store” experience that young techies feel at the Consumer Electronics Show.  There seems to be a theme, even if I can’t quite put my finger on it.  Junxure Cloud and Redtail’s Tailwag CRM software automatically launch task sequences after the software searches for triggers like a new client or if somebody has reached age 70½.  eMoney is introducing automated onboarding.  Vanare/NestEgg, Oranj and Jemstep are offering sophisticated institutional robo platforms that facilitate client onboarding, sometimes before the advisor even meets the client.  Pretty cool!  But what does it all have in common?

The afternoon sessions

A surprisingly inspirational and insightful keynote presentation on business dynamics by Jay Jay French, guitarist for the heavy metal band Twisted Sister, who got his start in business as a high school dropout who became prominent in the global marijuana trade.  This is definitely not a normal tech conference.

During the sessions, the buzz is all about meeting the challenge of the online advice platforms, aka “robos,” which triggers that feeling again.  What am I missing?  Back in the exhibit hall, a whole variety of workflow and automated systems have been built into TD Ameritrade Institutional’s latest version of Veo.  Trade Warrior’s software automatically tells you when client portfolios are out of balance, and before you ask, it’s already ranking the holdings from highest to lowest unrealized losses.  There may be a theme somewhere in all this…

At the evening reception on the lawn overlooking the Ft. Lauderdale beach, everybody gathers around a troupe of fire dancers.  This is DEFINITELY not a normal tech conference.

And then, glass of wine in my hand, as I’m listening to an animated conversation about, of all things, auto-populating fields pulled from the Quovo account aggregation engine, it suddenly hits me with the usual blunt force of the obvious.  The robos aren’t the only companies building intelligence into their software.  That trend is everywhere, in every corner of the software suite.

We’re not looking at a robo-revolution at all.  This is nothing less than the next evolution of professional software.  Call it Software 2.0.


I’m old enough to remember the early days of Software 1.0 in the planning profession.  Back in 1982, advisors were responding to this encroachment of unfamiliar technology much the same way they have been lately, saying things like:  Oh my god, we’re doomed!  There’s no way we can compete with this new, like, software stuff!  Now anybody can do the calculations that only we could do!”

And of course, you know how that story ended.  Software turned out to be the greatest thing that ever happened to the profession.  It allowed advisors to leverage their time in ways that were never possible before, and provide a deeper level of analysis and achieve greater levels of efficiency.

There’s no reason to think Software 2.0 will be any different.

But let’s not kid ourselves: those online automated platforms intended to put the profession out of business with disruptive technology.  So instead of focusing on their automation (which is everywhere now, and freely available to the profession) what, exactly, is the nature of their intended threat?  And how do we counter it?

As it turns out, this analysis also gives us a tour of the T3 exhibit hall.


We know that the venture capitalists who created the automated investment platforms took a hard unblinking look at the financial services sector, probing for Achilles heels and blind spots.  What did they see about us that we didn’t notice about ourselves?

First, they recognized that with existing technology, plus a few enhancements, they could automate the creation of client portfolios and have their software perform the most labor-intensive activities in advisor offices: the opportunistic tax-loss harvesting and opportunistic rebalancing of client portfolios.

In fact, they recognized that enhanced software will do these jobs better, and certainly faster, than a human.  Better?  How many advisors rebalanced back to their former equity allocations in March of 2009?  Who had the nerve after that awful bear run?  And yet an algorithm wouldn’t have blinked.  To it, the portfolio was simply out of whack and needed to be restored.

That efficiency gap can be closed—and the opportunity is on every aisle of the T3 exhibit hall: Betterment Institutional, Vanare/NestEgg, Oranj and Jemstep all have Software 2.0 enhancements that can make you just as efficient at managing client portfolios.

Second, the venture capitalists recognized that existing technology could be mashed together to create an online, automated, painless ACATS transfer experience for anybody who happened to have a web browser.  And, interestingly, these capabilities are everywhere I look in the T3 exhibit hall: Betterment Institutional, Vanare/NestEgg, Oranj, Jemstep, and UMAX: a partnership between Riskalyze, Adhesion Wealth Advisor Solutions and TD Ameritrade.  Advisors can even cobble together their own solution, using one of the e-signature services with document creation tools like DocuSign and Laser App.

As it spreads, this auto-ACATs technology will have huge disruptive implications for the profession—making it convenient and easy for advisors to switch broker-dealers or custodians (painless ACATs!), and for brokers to leave the wirehouse environment and move their books of business in hours instead of weeks.  It’s not hard to envision a mass migration from the wirehouse world to independent RIAs.

The third weakness is more subtle and potentially as important as the first two combined, because it directly affects your top-line revenue and the competitive equation between advisors and automated platforms.  It has to do with how the financial services profession is making its first impression on prospects.

The venture capital industry’s most important insight came when they realized that they could completely redefine the web experience for investing prospects.

What does this mean?  When you go to the websites of Wealthfront and Betterment, you encounter a web experience that is far more compelling than the typical advisory firm’s website.  The biggest difference is that they invite different levels of interactivity.  They get people engaged, and if they’re engaged, they stay, get familiar, then get comfortable, and then it becomes much more likely that the visitor will do business with them.

I think it’s safe to say that this is not the typical prospect experience at a typical advisory website.  This was an enormous blind spot in the profession—something none of us saw before the advent of what we call the robos.  I’m going to provisionally label it the “pre-engagement engagement experience” until somebody comes up with a better terminology.


Traditionally, the profession has thought about advisor/client relationships in three stages:

  1. The initial interview and get-acquainted meeting, which is a mutual assessment and, if all goes well, a mutual decision to do business together.
  2. The client onboarding and initial financial planning process.
  3. The ongoing service relationship, which involves regularly-scheduled meetings, coaching, updating the plan and, of course, managing the assets.

Different advisory firms endow each of these stages with their own service model and pricing structure.  Some charge for the initial meeting, many charge a retainer for the initial onboarding and analysis, and there are a variety of ways (still evolving) for clients to pay for the ongoing service.

But what the venture-backed robo-founders realized is that there is a fourth, prior stage of this relationship, which happens to be growing increasingly important.

We’re talking about the stage where the curious prospect comes to your website to check out you and your services, and makes a decision about whether to engage you—or not.  This is becoming increasingly important because the next generation of prospects—what the Wealthfronts of the world call THEIR generation of prospects—spend increasing amounts of research time on the web before they enter into a relationship with an advisor, human or robo.

The online advice platforms used the early versions of Software 2.0 technology to create more engagement with those prospects.

The robo-focus on the pre-engagement engagement did the profession a huge favor.  It exposed a massive opportunity cost that has been leaking out of advisors’ collective pocketbooks for years.  The week before T3, I watched Spenser Segal at ActiFi give a presentation at the TD Ameritrade Institutional conference, which actually put some numbers to this opportunity cost.  ActiFi purchased the Advisor Impact survey data, aggregated from tens of thousands of client surveys plus a huge number of advisor surveys as well, going back more than a decade.  When he dug into the data, Segal found an alarming discrepancy between the number of referrals that satisfied, engaged clients said they were giving to their advisors, and how many of the referrals those advisors were actually receiving.

When the two were compared, it became clear that advisors were only seeing one in ten, maybe one in twenty of those referrals.  The others were invisible; in a recent e-column, I called them ghosts.  The prospect would go to the advisor’s website to check them out, and never make contact.

Can Software 2.0 help advisors capture a greater percentage of those prospects, and also beat the robo-competition at its game?

The robos are focusing their Software 2.0 primarily on automated portfolio-related engagement—one client engagement vector.  My T3 tour uncovered four vectors where different Software 2.0 firms are creating new online engagement opportunities.


Here are a few financial planning tools that stood out to me:

  • MoneyGuide Pro
  • Advizr Express
  • Investcloud

MoneyGuide Pro is offering an online service called MyMoneyGuide, which advisors can put on their websites so prospects can create their own simple financial plan.  The service currently costs the advisor $75 per client who creates a plan.  According to Bob Curtis, president of PieTech, initial results show that clients who complete a plan are highly likely (almost unanimously, is how he put it) to contact the planner whose website made the tool available.  It’s a relatively cheap way to capture a ghost and boost top-line revenue.

Advizr Express, meanwhile, was made for advisors to post on their websites.  Once again, clients can explore their own financial planning situation, and then contact the advisor.

Investcloud breaks down everything an advisor does in the software realm into applets that advisors can either use themselves or put on their website—allowing clients to create their own investment management and document storage solution, simply by combining performance, trading and account aggregation.

It’s easy to envision a day when most of the actual planning will be done by clients online, who explore their futures, play with the variables, input their goals, income and other financial information, and then pay the advisor for ongoing advice and counsel.  The planning profession will very rapidly embrace a pure advice model, rather than continuing to be an exercise in tedious data entry and modeling.


In this category I would put:

  • Jemstep Advisor Pro
  • Oranj
  • Betterment Institutional
  • Adhesion/UMAX
  • Vanare/ NestEgg Wealth
  • RiXtrema
  • E-Valuator
  • Folio Institutional
  • SigFig
  • Trizic
  • Schwab/Intelligent Portfolios

With support from:

  • Quovo
  • Fox Financial Planning Network
  • Docusign
  • NetDocuments

This, of course, is the crowded space, filled with companies that once aspired to compete in the retail space and moved to partner with advisors instead, advisor-centric robos like Oranj, Vanare/NestEgg and Jemstep, plus custodial solutions and institutional versions of retail robo software.  To pick one that seems especially sophisticated, Jemstep Advisor Pro actually seems to have more capabilities than the online retail platforms, but it also checks the boxes, allowing prospects to bring their portfolios into the system via account aggregation, so they can compare their composition and returns with an advisor’s model portfolios.  They can self-ACATs this money directly over to the advisory firm’s custodian, using e-signature and forms technology that may be a step slicker than Wealthfront.  Oranj offers the same capabilities, including self-ACATs and Quovo-driven automated account uploads, and the next iteration will include automated performance reports.

The key point is that advisors need not offer prospects an inferior robo experience.  And the software (and a number of others on the above list) will also provide the Software 2.0 automated rebalancing efficiencies that the robo-platforms pioneered.


In this category are:

  • Oranj
  • eMoney
  • Panoramic
  • Assetbook/InvestorView

Advisors can put Oranj on their website and permit clients to upload their account information and documents in an orderly cloud-hosted filing cabinet, and manage their financial affairs all in one place—before they ever contact the advisor.  eMoney will introduce the same capabilities out of its advisor-driven client vault later this year, and already clients can input most of their information. Gen X and Millennial clients say they get more value from having all their financial information organized in one place on the web than they do from the analysis provided by their advisor.

These sophisticated document vaults offer prospects something they currently cannot get from an online advice platform, and is especially appealing to the next generation of clients.


And then there is this category, engagement tools:

  • Money Minds (United Capital)
  • Financial Personalities
  • Risk Tolerance Questionnaires (FinaMetrica, Riskalyze)
  • PreciseFP

I think you know about the risk tolerance assessment tools, and Riskalyze has certainly made a big push with the novel argument that they can increase an advisor’s top-line revenue.  A prospect who is already working with an advisor takes a brief quiz, gets a risk tolerance number, uses the same account aggregation tools as in Category 3 to pull in her portfolio information, and the system evaluates whether that portfolio matches up with the risk score.  If not, presto!  The advisor has ammunition to dislodge that existing client relationship.

So far, the main competitor in this space, FinaMetrica, has declined to make things so simple, on the theory that there may be a variety of good reasons why an advisor might recommend a client portfolio that deviates from a risk tolerance score.  Both tools, however, undeniably engage prospects and get them thinking about their portfolios and working with an advisor.

Money Minds wasn’t in the exhibit hall, and it’s not available generally to the profession.  I include it because it was really the first of its kind in the planning space, a pre-engagement engagement tool that accomplishes three things:

  • It gives prospects a reason to linger on your site
  • It gives the client a chance to be “heard” about issues he or she is concerned about, lowering the barrier to calling and making an appointment
  • It gives advisors a preliminary look at the characteristics of a client before he or she walks in the door, potentially raising the close rate and certainly facilitating that initial mutual-assessment meeting

Financial Personalities is designed with the same goals in mind: it gives prospects a reason to linger on your site, and after they take the quiz, they get a report that gives them insights into themselves.

Where Financial Personalities differs from other self-assessment instruments is that it is specifically designed with the advisor in mind.  While the prospect is learning about his/her tendencies around money in a very detailed way, the advisor is also learning whether this is somebody who gets a thrill from investing or wants to avoid anything to do with the money management process.  Is this a saver, a hoarder, somebody who tracks her finances obsessively or, at the other end of the spectrum, tends to be surprised at what she sees when the credit card statement arrives each month—and pays what she can?

In addition, the output gives you, the advisor, insight into the hot buttons that are buried in this client’s psychology.  You know if these prospects are highly focused on data security, or want their portfolios to be more interesting and exciting than what you get with what they regard as bland investments like index funds and ETFs.  This raises the possibility that you and they will connect in that all-important first meeting, and should have at least an incremental impact on the close rate.

At this point, I need to give a conflict-of-interest alert: Financial Personalities is my own invention, in conjunction with the other software product on this list: PreciseFP — which provides forms on the advisor’s website that can be used to collect the basic client data, and then populate the CRM, financial planning and portfolio management software.  I became interested in PreciseFP when I discovered that it sits on top of the software stacks of the most tech-sophisticated young advisors.  Using PreciseFP means they don’t do much manual entry anymore.


In a recent e-column, I tried to assess the impact on an advisory firm’s top-line revenues if, instead of posting a glorified brochure on your website, you create a more interactive experience on your website.  These numbers, which I’m still playing with, were created to reflect simply adding Financial Personalities, but they can be broadened to imagine that you’ve supercharged your website with some combination of all four Software 2.0 pre-engagement engagement vectors.

Consider an advisory firm that has, in the past, been receiving 200 referrals a year—and understand that I’m making that first number up, and then basing everything else off of that figure.  Your numbers will vary.

Let’s suppose that of those 200 client referrals, 150 of them will visit your website, and ten of them would pick up the phone and schedule an appointment.  If you’re good, you’ll close two-thirds of those clients, and the bottom line is that you get 6 new clients a year—out of 200 referrals!  That’s an abysmally small addition to your top-line revenues, considering the business that has been sent in your direction.

Now let’s imagine that your website has become interesting and interactive.  You still get 150 site visits, but now (again these are untested numbers), let’s assume that now, instead of ten, you now get 16 of those prospects to make an initial appointment.  Based on the additional information you have about these people, you’re able to raise your close rate to 75%, meaning now 12 of them will become clients.

In addition to that, in return for participating in some of the interactive aspects of your website, 40-60 of the ghosts who haunt your website will give you their contact information, which allows you to stay in touch with them.  This could potentially add 15-30 new clients over time—perhaps as many as 5 more a year.

Using VERY conservative assumptions, your firm would bring in 11 additional new clients a year.  Multiply that number by the value of a long-term client engagement and you have now done a quick calculation of the possibilities of addressing this blind spot in the profession.

And remember: you’re doing nothing more, from a labor standpoint, than you were doing before.  You’re simply capturing more of the referrals that your clients have been giving you.

Of course, this calculation doesn’t take into account people who will be searching the web for an advisor, and stop by your website, and encounter a far richer, more interactive environment than the online brochure that is the website of the advisory firms up and down the street.


With this fresh look at Software 2.0 springing up all over the T3 exhibit hall, what are the implications for the future?

I’ve already made the first prediction, but it bears repeating.  As these tools are made available on advisor websites, as prospects are invited to play with their own financial planning variables, and input their portfolios into your own institutional robo-platform and perhaps even select one of your model portfolios, much of what we have traditionally called planning work will be done, finished, before the client ever walks in your door.  In that future, advisors will increasingly be paid for advice, rather than the rote work of financial modeling and data input.

I’ll also repeat myself with my second prediction: Advisors are poised to capture a much higher percentage of the prospects who have been referred in their direction, and will also become more accessible to curious prospects who are researching a financial advisor.  Top-line revenues are about to increase across the profession, and more people will be making that initial phone call and starting the process of engaging a financial planner.

Finally, software providers will offer a new value proposition to the advisory profession.  In the past, the value has been almost exclusively focused on office efficiency and enhanced client service.  In the future, they will also be talking about how their software enhances an advisory firm’s top-line revenue.

It’s an exciting possibility.  And we have the robos to thank for this visibly brighter future.

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Bob Veres
Bob Veres
Borrowing from more than 20 years of conversations with successful advisors—the rare individuals who have gotten over the productivity hurdles and become indispensable in their clients' lives—Bob Veres offers a real-world, hands-on, often humorous, always-entertaining look at the remarkable future of the profession. To learn more about Bob and the Inside Information community, visit

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