Sign up today and take advantage of member-only content — the kind of timely, cutting edge industry insight that only Money Management Executive can deliver.
  • Exclusive Online Only Content
  • Free Daily Email News Alerts
  • Asset Management Blogs

Wealth Managers Slowly Warming to Mobile Devices


The wealth management sector hasn't exactly been blazing the trail when it comes to integrating sleek new mobile devices into the workflow. But that slow ship is beginning to turn, according to a study from the research firm Aite Group.

In a survey of financial advisers, Aite Group analysts found increasing interest in the business applications of smartphones and tablets both among advisers and the wealth management companies they work for.

"Right now, there is a great level of interest in it. They realize that mobile is not just a flash-in-the pan kind of thing. It's not going to go away," said Alois Pirker, author of the report and research director at Aite Group. "Firms have been cautious at first because they cannot respond to every trend that's going on, particularly when it's coming from the consumer side."

Aite Group conducted a similar survey in the third quarter of 2008, around the time that Apple first opened its App Store, inviting developers to build software applications to run on the iPhone, and, eventually, its iPad tablet.

The three years since have been a time of quicksilver change in the mobile industry, with the emergence of Google's Android as a powerful counterweight to Apple in the smartphone and tablet markets, along with new, Web-oriented entries from BlackBerry and Microsoft.

But adoption of the new devices and applications in the wealth management sector has been slow and demand among financial advisers remains uneven.

In Aite's survey, 23% said access to business applications through mobile devices is of little or no value to their trade.

But that segment, likely a diminishing minority, represents both a defining demographic trait of the financial adviser profession as well as the inevitable pocket of opposition to any new and disruptive technology.

"You have to remember that the adviser force is, in terms of average age, pretty advanced," Pirker said.

Thus, many wealth management practices are now putting the development of a mobile strategy on the fast track, acknowledging that it is increasingly unrealistic to bar employees from using the same technologies that are coming to define their lives as consumers. Even more importantly, many firms are coming to see the business value of equipping their workforce with smartphones, tablets and access to the growing constellation of apps.

Most elementally, mobile devices can give financial advisers and mutual fund wholesalers in the field access to the same business applications and resources they enjoy in the office.

When a client calls an adviser or a wholesaler at the office, a CRM system commonly kicks in, calling up the client's or the broker's portfolio or book of business, and putting advisement prompts at the adviser's fingertips. Why not, then, expand those same advantages (or in some cases obligations, in light of certain fiduciary responsibilities) to advisers and wholesalers working outside the office?

The front end of the technology curve has another advantage for wealth management firms. In a highly competitive labor market, sophisticated technology can serve as a powerful recruiting and retention tool. In Aite's survey, 65% said technology was either important or very important in their process of selecting an employer.

Perhaps predictably, the firms with the biggest online businesses-Schwab, eTrade, TD Ameritrade and Fidelity Investments-are among the leaders in outfitting their advisers with mobile devices and access to apps. In some cases, that process has essentially been one of taking the consumer-facing apps that investors have roundly embraced and porting them over to the advisers.

But technologies that were designed principally for the consumer market do not always translate neatly into the business space. Wealth management firms-along with most every other industry-are now working through a litany of concerns before they are willing to welcome the new devices behind the firewall. Often that conversation starts with security, but that's not the end of it.

"Security definitely has been a major concern," Pirker said. "Firms still blame that for their inactivity. I don't think that's the full story."

A central question turns on whether advisers will be permitted to access business applications through their own personal devices, entailing a sign-off from the IT shop, or whether a firm should issue smartphones or tablets to the advisers who spend the most time in the field.

There, adoption may be hindered by the breakneck speed of innovation and product development in the mobile arena. After all, when technology is deemed obsolete after a scant couple of years, the temptation to stick with the laptop with the longer refresh cycle is strong.

That necessary stability will likely emerge as the mobile industry matures, and the momentum for adoption in the wealth management space is there, according to Aite Group.

"Is there going to be 100% adoption? Probably never," Pirker said.

Nonetheless, "the critical mass is there to make the investment worthwhile. I feel like it's breaking now-the development is accelerating," he said. "I sort of sense there's going to be rapid adoption now." MME

Kenneth Corbin writes for Financial Planning.