At this year’s T3, AdvisorEngine leaders shared deep insights on data, artificial intelligence and compliance issues

Practice complexity continues to redefine the investment advice industry.

Arising technologies such as Artificial Intelligence chatbots pose as much promise as they do serious business risks for wealth management firms, while aggressive regulators expand the scope of their reviews and subject firms to new liabilities.

Attendees at the annual Technology Tools for Today (T3) conference heard how smarter tools, deeper partnerships and reengineered business frameworks can help firms stay ahead of the challenges of these shifting technology and compliance demands.

AdvisorEngine CEO Rich Cancro took center stage and highlighted the need for firms to examine how well they are organized around data and question how their technology provider helps them achieve outcomes from that information.

Cancro said the competitive advantage for data-driven firms is clear – a recent McKinsey study noted they are more likely to acquire and retain clients and are more profitable than firms that don’t.

What’s important for advisory firms, Cancro said, is to determine where they rank in terms of their data use, their technology connectivity, and the experience they provide clients.

For example, Cancro said, it’s just as important for firms to discover why they lost prospects as much as knowing what they did to win new business. And when a firm is consistent with how it collects and represents data, he said, it’s easier for firms to spot breakages too.

Cancro went to lengths to show the audience that all three factors are connected, as well as sharing frameworks to help firms understand where they stood regarding their usage.

By becoming leaders in each aspect, firms ultimately increase operational effectiveness, enhance client satisfaction and drive further revenue growth, Cancro said.

“Your client and advisor digital experience should be approachable, knowledgeable and proactive,” Cancro said.

For this reason, firms need a data evangelist to build buy-in to the approach and a technology partner like AdvisorEngine to help them achieve these goals, Cancro said.

As part of his presentation, Cancro highlighted AdvisorEngine’s latest offering of a platform powered by deep portfolio management capabilities and multi-custodian abilities that, thanks to industry-leading integrations with all of the industry’s major custodians, simplifies and harmonizes account service and maintenance.

Artificial intelligence was another hot topic at T3, along with data and integrations. It was standing-room-only during AdvisorEngine CTO/CIO Raj Madan’s presentation on ChatGPT.

Madan provided an overview for many in the audience who had heard about the popular natural language chatbot but didn’t understand how it works or how it could be applied to wealth management.

Among the stunning facts Madan put forward was that ChatGPT crossed the 100 million users milestone in January 2023, just two months after going public.

Madan provided two practical examples of how users could take advantage of ChatGPT in combination with their practice management technology, such as AdvisorEngine CRM.

In one, he demonstrated how he generated a client email about market conditions within 20 seconds, then loaded the text into the CRM for quick dissemination. His second example involved using ChatGPT to generate Excel formulas for instant fee billing totals and matching, with data pulled from CRM.

Madan cautioned that despite its time-saving capabilities, the chatbot requires serious oversight for any material it could generate for clients, and noted there are developing legal challenges about how it generates material.

Matt Ackermann of Integrated Partners caught up with Madan after his presentation and the two put ChatGPT to the test. Click the video to watch. 

In case you missed the presentation on artificial intelligence, you have the opportunity to join us for a live webinar on Friday, March 31st. Madan will be discussing using ChatGPT and the wealth management use cases for leveraging this generative AI. Click here to register.

Beth Haddock, lead compliance strategist at AdvisorEngine, headed a discussion at T3 on how advisory firms can avoid legal challenges when outsourcing services to third parties.

The SEC is now considering a rule that would prohibit advisory firms from outsourcing “covered functions” without meeting minimum requirements. Haddock explained the definition of “covered function” – and the steps firms need to take to remain on the right side of regulators when it comes to outsourcing, which she noted were good business practices in any case:

• Conduct due diligence on service providers before outsourcing
• Periodically monitor service providers’ performance
• Make and keep books and records related to diligence and monitoring
• Conduct diligence on and monitor third-party recordkeepers and obtain reasonable assurances that they will meet certain standards
• Report service providers on their Form ADV

“You owe a duty to clients to treat outsourcing as you do when delivering investment advice,” Haddock said. “Do your homework. Don’t rely on personal references only.”

It wasn’t all shop talk at T3 – AdvisorEngine hosted several social events, including two extremely popular beer and whiskey tastings on the conference floor.

AdvisorEngine clients, advisors, partners, and others descended on AdvisorEngine’s conference stall, which included a photo and video booth alongside a “living room” space where attendees could sit and get a sense of the company’s culture, innovation and client service. Click to take a tour with AdvisorEngine's COO Craig Ramsey. 

T3 also served as host to the newest issue of Action! magazine, which features timely tips for advisory firms juggling budget considerations in a tight market.

Many industry thought leaders lined up for the opportunity to be interviewed for Action! magazine, which also publishes online and offers a free monthly newsletter.

The entire AdvisorEngine team celebrated a great event and looks forward to returning for the 20th anniversary of the T3 conference next year.