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Leveraging financial planning software can make a difference for clients and appeal to their advisors.Getty Images
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A technology arms race is underway among wealth management firms in Canada to retain and attract advisors. Specifically, they’re investing in advanced financial tools to ensure advisors can engage in more complex financial planning for clients, serve them better and gain an edge.
Notably, several non-bank-owned wealth management firms are embracing the innovation fray, often able to adopt new financial planning software more quickly.
“Smaller firms have that ability to pivot,” says Cameron Smith, vice-president of advisory services and client-relationship manager at Nicola Wealth Management Ltd. in Vancouver, a boutique wealth management firm that serves high-net-worth clients.
To that end, he notes Nicola Wealth runs a proprietary financial planning software for its team that can update financial plans in real time during client meetings.
“You can actually see couples connecting the dots and asking questions,” Mr. Smith says. “It really helps them understand their strategies to move forward.”
Previous technology was less responsive, he notes, meaning financial plans were more static during meetings and had to be updated afterward, which often required more of clients’ time.
Having robust technology can appeal to clients and advisors alike. Broadridge Financial Solutions Inc., a New York-based global fintech company, looked at the attitudes and plans of leaders from across wealth management firms earlier this year for its third-annual Broadridge Digital Transformation and Next-Gen Technology Study.
The survey found that the right tools can help identify client needs and growth opportunities, personalize the investor experience and deliver cost efficiencies. Beyond that, Broadridge stated that modernizing tech platforms can “drive advisor revenue, retention and productivity.”
Every wealth management provider has a technology stack aimed at providing retirement, estate and tax planning, as well as portfolio management. Financial tools are big business. A recent report shows the market for financial planning software was worth US$1.34-billion in 2022 and is forecast to grow to US$2.31-billion by 2028.
Many Canadian companies are at the forefront. Among them is Conquest Planning Inc., a financial planning tool provider based in Winnipeg. Conquest Planning serves some of Canada’s largest financial institutions. Beyond some of the big banks, that includes IG Wealth Management, one of Conquest Planning’s first clients.
“We have been very focused on providing advisors with a tech platform that we consider industry-leading,” says Brent Allen, head of strategy and business operations at IG Wealth Management.
In 2018, the company identified digital transformation as a key strategy to remain competitive. Adding Conquest Planning’s abilities in 2020 was central to that appeal, Mr. Allen says, offering advisors more flexibility than they might find elsewhere.
“We give advisors significant freedom in being able to choose the device they prefer to interact with clients,” he says.
Along with access to Conquest Planning, that includes Salesforce, IG’s broader advisor portal. That enables everything from onboarding new clients to doing transactions on their behalf. Yet, financial planning is where IG Wealth Management believes it has a technological advantage with Conquest Planning.
“It has assisted intelligence built in, which can do real-time adjustments to [financial] plans based on client preferences. Then, it only recommends solutions if the client would be open to them based on those preferences,” Mr. Allen says.
Clients can access their financial plans through “a digital sandbox,” he adds. “They can play around and see the impact of various choices.”
IG Wealth Management’s significant investment in its tech stack has been paying off where it matters – in retaining and attracting advisor talent.
“Every recruit – potential advisor – will ask you what your technology platform is and where you believe it’s going. A significant majority have told us that this is the best tech stack they’ve ever worked with, and these are advisors coming from some of the largest institutions across the country,” Mr. Allen says.
“The feedback is consistent that we are much further ahead from their perspective, and it’s clear they know where we’re going with everything integrated and automated,” he adds.
Darren Coleman, a portfolio manager with Coleman Wealth at Raymond James Ltd. in Oakville, Ont., sees the attraction of firms offering leading-edge software, although he says the strategy isn’t without risks.
“It can be really alluring for advisors thinking, ‘If I have better software, I can do better [financial] planning,” he says. “But the faster you run with tech, the faster you might trip and fall.”
Smaller firms may be able to adopt tools more quickly, but he says what also matters is having the resources to keep up with constant technological change. His practice has the flexibility to use new tools as long as they meet a certain level of security.
“If I find a piece of software that I find very interesting, I can bring it to Raymond James, and they put it through a risk assessment,” Mr. Coleman explains.
Adopting new financial planning software involves many considerations, notably, the ability to adapt quickly to changing taxation and regulatory landscapes. Rapid changes on these fronts may exceed the software’s abilities, at least in the short-term, requiring workarounds, Mr. Smith says.
“As basic as it sounds, we have spreadsheet wizards who can build specialized formulas quickly.” Larger firms might be reluctant to go this route, he adds.
Yet, financial planning tools are increasingly comprehensive and can adjust quickly to change, even for clients with complex needs like entrepreneurs, Mr. Allen says.
“Our tech offering brings all the [financial] planning elements together – cash flow, budgeting, insurance, estate planning and business planning – and updates quickly with new changes,” he notes.
Although software is game-changing, financial planning still requires a human touch given that it’s a relationship-based business at heart, Mr. Coleman says.
“Better planning comes from asking better questions. That’s where the real competency comes from advisors – not from the software,” he notes. “But certainly, software enables advisors to be more effective, including solving the often complex math more quickly and accurately that goes along with better decision-making.”
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