Can Bank Wealth Advisors Compete Against Broker Advisors? Tony Stich, Advicent, Part 2

BankBosun Podcast | Banking Risk Management | Banking Executive Podcast

Kelly Coughlin

This is part two of my interview with Tony Stich, Director of Global Marketing at Advicent. In part one of my interview with Tony Stich, we focused on the definitions and differences between financial planning technology versus robo-advisory technology; and we spent some time on their technology solution, Naviplan which is designed to enable a bank financial advisor and other representatives of the bank collect, compile and review relevant customer financial planning information in a simple and repeatable way…simple and repeatable are Tony’s words and seem to be the enterprise-wide mantra of Advicent.

We will start part two with some of the unique and special procurement and vendor management needs of banks and how Tony thinks Advicent is uniquely prepared versus all other of his competitors, when dealing with the integration of this technology with the banks platform. And also, how this technology can help banks better compete against non-bank brokers and advisors.

Part two, Tony Stich, Advicent. We’ll start talking about procurement.

Announcer:

Kelly Coughlin, is CEO of BankBosun, a management consulting firm helping banks C-level offices, navigate risks, and discover reward. He’s the host of the syndicated audio podcast bankbosun.com. Kelly brings over 25 years of experience with companies like PWC, Lloyd’s Bank, and Merrill Lynch. On the podcast Kelly interviews key executives in the banking ecosystem to provide bank C-suite offices risk management, technology, and investment ideas and solutions to help them navigate risks and discovery reward. And now your host, Kelly Coughlin.

Kelly Coughlin

You said you wanted to talk about procurement. Is that procurement of data?

Tony Stich:

Technology procurement…the challenges the bank based due to Dodd-Frank legislation, when it wanted to add any new vendor into the fold. This regulation makes it very cumbersome and challenging to add new vendors. Now, this was all done in the efforts to minimize cyber security, privacy risks, but also the jeopardizing anyone’s accounts, deposits, things of that nature. So, when I mentioned procurement, Advicent keenly understands the challenges a bank faces when it attempts to adopt a new technology. First and foremost, we understand that that decision is not made lightly. When you consider a new, in this case, financial technology product, such as NaviPlan, you want to consider the alternatives. You want to look at our competitors. You want to look at what your core processor might offer. You want to look at all those decisions.

Then, you want to talk with IT. You want to talk with auditing. You want to talk with the executive team. Advicent knows this, in fact, and we go through a step-by-step process that our competitors do not to make sure that procurement goes smoothly and all of the boxes are checked. So we know with a great deal of certainty the time it’ll take for us to implement our technology with your existing banking ecosystem. Our competitors simply don’t do that. And that comes from nearly 50 years of our experience in implementing enterprise wide technology. We have over 4,000 customers globally. We service their needs with our technologies. We are uniquely qualified to go through that procurement process; to show you our financials; to show you our ISO certification; to show you how we are going to tie back to your core processor, your legacy back office systems. I would argue that that is probably the largest inhibitor to making a decision, is the core processor, that back office solution. We know how to work with those individuals. We know how to work with that technology. We have the APIs. We have the integration. We are uniquely qualified to do that through the procurement process all the way through delivery.

Kelly Coughlin:

You understand the financial situation that community banks are in. They can't afford a $100,000 installation. Do you guys have an offering that recognizes the financial statement of these banks that gives them a solution they can afford?

Tony Stich:

Great question, Kelly, and absolutely. We have installed the large enterprise companies in the world. We have provided installations at the smallest community banks in the world. One thing remains the same. We understand this implementation process, and we have different levels of service; which includes onsite visits; which includes training the trainers; which includes implementation. That all can cost a variety of different levels that will meet those needs. But what's important is, we'll help you go through ROI calculations. We can actually go through the procurement process with you. We're going to show you the cost to both implement and stand up the program, but then we'll show you the recovery time.

For the sake of this discussion, let's just walk into a community bank. There's your tellers, your loan officers, and in some cases, you will have a wealth manager or trust team on demand right there at the office. The point of our technology is, we can make it readily available. Simple, easy to use, right at your teller line.

I think the biggest thing a bank wants to do is increase the share of wallet. I think we'd all agree. What better way to do that is at the teller line? Making sure the teller’s asking the correct questions. Making sure the teller’s offering the opportunity to answer a quick questionnaire on this iPad or tablet, where a bank visit can turn into a conversion. I remember back in the days when the financial advisor at a bank would say to the teller, hey, do me a favor. Next time you see someone with a larger savings account, that should still happen today. That seamless communication between tellers, personal bankers, and your trust teams, that should still happen, and we allow that to happen with our technology. Unless they opt in, a bank cannot share with a wealth manager the data of that customer, because they're two separate entities, correct?

Kelly Coughlin:

Yeah.

Tony Stich:

A wealth management company, which is not FDIC insured, of course, and the bank. So, how do you get past that? How do you get that wallet share? You use our technology. Let me explain. When the individual’s waiting in line for the teller. If you have, for instance, tablets set up with the nice leads tools, just sitting there waiting to be touched or waiting to be engaged with while the teller’s transacting, that's a great time for that individual perhaps to key in some data. Once that data’s keyed in, then the tellers picks up on that cue. I don’t want to go into too much detail on that whole buying or selling process, but what I'm suggesting is, technology bridges the gap between the teller and the wealth manager or financial advisor, and then of course, the customer kind of goes through that process more seamlessly.

Kelly Coughlin:

I'm sure that all banks have some sort of financial planning process going. It may not be very efficient and simple and repeatable, but they have something. Aside from kind of a home-grown bunch of Excel spreadsheets connected together, linked with a word processing document type thing, aside from that, are you guys tending to replace existing technology solutions? Or are these all pretty much new installations that are kind of replacing, upgrading a home-grown process?

Tony Stich:

We will come in, and it's just you with taking out your existing process and implementing our technology. And I want to be very clear, Kelly. Our technology replaces your process in a good way. We show you how to best provide financial advice. We're not going to tell you to do your jobs. What we're going to do is say, hey, you want to follow fiduciary standard? Do you want to make sure you're providing the right advice? Our technology will do so. I cringe at the idea of financial advice being provided through Microsoft Excel. Nothing wrong with Microsoft, but the very idea that calculations through Microsoft Excel are providing financial advice, I'm just not sure that that is the right thing to do for yourself clients.

Our technology replaces all of that. It makes it easy to do. And finally, if you do have existing technology, possibly through your core processor, oftentimes we win those deals because our calculations are better. Our processes are simpler. And quite frankly, we are the best at providing financial plans through our technology. We usually replace but I'll tell you one thing. You won't miss a beat. We will integrate your back-office technology. We'll make sure your processes still follow the same course, and with our work flow technology, with our compliance frameworks, we're going to help make sure that the plans are going the right way. Auditing sees them. Your trust team might see them. If a personal banker’s getting involved, making sure the financial advisor’s always seeing it as well. This will help replace processes that are quite frankly, probably antiquated in nature. This will help make sure that you are competing against robo advice, because you are now providing a technological solution that provides good advice, good reporting, and if you choose to do so, a client portal that exceeds the expectations of the modern-day investor.

Kelly Coughlin:

Banks are competing against brokers and financial advisors that are using a Schwab platform, Fidelity platform, Pershing, and TD Ameritrade. I think between those four custodian brokers, it's probably about 75% to 85% of the market. When you look at the offering Schwab, Ameritrade, Fidelity, Pershing have what competitive edge do you think banks would have by using your technology? What are you seeing those four are using in terms of technology that these banks would compete against?

Tony Stich:

This is one of our value props. This is our value proposition. We will tell you any bank of any size that we can give you technology that will enable your advisors to provide the same experience as the Fidelitys and the Schwabs of the world. Now, to be completely fair and on the record, we integrate very deeply with all those brokers. We have great relationships with all of them. However, it's very important—Pershing, for instance, Schwab, Fidelity, they all offer client portals. They all offer simplified financial planning technology. They let advisors use our technology. So, the bank has to compete. How do you compete? By offering the same service.

Now, I'm going to tell you in my opinion, what the gamma is. Let's lay it on the table. You have a bank. Let's say a community bank, and you adopt or implement NaviPlan technology in a client portal. It's beautifully designed. It's well branded. It offers the same level of service that you're going to get from Pershing’s client portal with their technology. Here's the gamma. It's the community banker. That’s the value add. The person I believe is going to naturally gravitate to that community banker, to that trusted source.

We offer technology better than those four custodians, and what we'll do differently is, we'll help your advisors, your wealth managers, become that gamma, become that value proposition that you can say, hey, you should be investing with us. You should be getting your advice from us. In short, we provide you the technology to stay competitive and to be valuable to your customers and prospects. You're on par with technology. You have evened the playing field, and now it goes to the bread and butter. It goes to the community relationships. It goes to your charitable efforts. We talk about that. That, again, that's the value prop. That's why community banks are going to win, is because, keep it equal in technology, you're going to win everywhere else.

Kelly Coughlin:

Yes. Right.

Tony Stich:

You know, we have a mission here at Advicent, and that's for everyone to understand and impact their financial future, and we really believe that people ought to have a financial plan. If we can help one bank or 1,000 banks provide financial advice to the customers, that makes us happy. I think it's important that people understand that there are options out there that you can beat the robos. You can beat the custodians. You just need to know that the technologies available to you, and you need to embrace that change.

Kelly Coughlin:

Great, okay. I think I've got all my questions. Anything else you wanted to add to this?

Tony Stich:

Banks are slow to adopt. They are, they're hesitant for change, and we just hope we can be the catalyst, because the reality is, they do need to change. I don’t think the branch infrastructure’s going to go away. I think it's going to iterate. It's going to, it's going to, like, look different. The banks really need to embrace technology.

We were over in London back in March, and we actually wrote a white paper on how incumbent banks need to start thinking like startups, and I'll get you that white paper, because it's really fascinating how what we lay out in a few steps of how to change the culture of your bank or your large enterprise institution and how you can start thinking like a startup so you can start adopting the technology to be successful, especially in, in, in today’s day and age.

I want to encourage your listeners to visit Advicent, because we have a great deal of thought leadership content, blogs, videos, and you know what's really important for these C-Suite guys? They should be reading our white papers and downloads. We have some really intelligent stuff on client journey mapping, on staying relevant in the year 2020.

Thank you so much for having me, Kelly

Kelly Coughlin:

Okay, thanks for your time. I appreciate it.

That concludes my two part interview series with Tony Stitch at Advicent. Tony can be reached at 855-885-7526 or you can shoot him an email a [e-mail], A-D-V-I-C-E-N-T.com That’s it for me. Kelly Coughlin at BankBosun. Thanks for listening.

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