Page 38 - Investment Advisor March 2021

Leadership & Succession Planning

once tried to merge investing and shopping. In 1981, Sears Meanwhile, “there have been rumors for the past 18 months
acquired Dean Witter Reynolds. Their new offering was derided that Amazon was exploring a banking charter which would
as ‘socks and stocks.’ Sears bailed on the idea in the early 1990s.” allow for deposit taking,” he also pointed out.
Echoing Iskowitz, Marshall said: “In some ways Amazon Additionally, Marshall said, Amazon, through its AWS divi-
has already entered into financial services through the work- sion, is already serving as “the infrastructure for many finan-
ing capital loans that they offer to sellers” — a program that cial firms — most notably CapitalOne.”
“has been very successful for Amazon lending over $1 billion
to around 14,000 sellers in 2019 alone.” Jeff Berman can be reached at [email protected].

What BD Execs Think of Amazon’s Impact on Advisors

In Investment Advisor’s Broker-Dealers of the Year roundtable dis- Lon Dolber, American Portfolios Financial
cussion in 2019, we asked four broker-dealer leaders: What’s your Services: We decided to eliminate as many hands
view of challenges tied to Amazon’s impact on the business world as there can be in our pocket. We went to the advi-
and investors’ rising expectations about quick, high-quality digital- sors and said, “We can integrate something that
based service? Their responses remain instructive and relevant. has all the bells and whistles [others] charge you for. What if
we could give you the basic platform, which means you could
David Stringer, Prospera Financial: You can’t ignore put five money managers into one account? Is that enough? We
the technology advancements that are happening. could do it and not charge you, because we recognize that to
You’ve got to embrace them ... and move forward help the advisors scale, we’ve got to bring our costs down.”
with them. But there are some basic things that just We decided to do that by building a platform. This end-to-end
stay — like having a clear value proposition. We’re building our firm solution is going to be important … for the public and for the
like a good advisor builds their practice, with a clear value proposi- advisors, so they can open up accounts quicker, easier and in a
tion, scalable business processes and a great client experience. more digital fashion.
We just have people who value that experience, and we have What about the future? What if you went directly to a net-
not found that we’re behind the curve on technology — because work of relationships? To do that, you need to have an end-to-
we stay in the business; we participate. We understand what end solution that somebody could point to, that a network could
people are doing out there, some of the changes that are tak- point to. I see that down the road. You start by building that
ing place and are trying to advance the ball with all that. But we index solution for your existing customers, who are financial-
also try to stick to our knitting. We’re a boutique firm, and we’re service professionals, so they can open up accounts quicker and
trying to be the best boutique firm we can be and are not trying more efficiently. To me, having an end-to-end solution is very
to compete on scale. important; we’re building it internally now.
And with compression going on, you’ve got to have more
assets to make the same amount of money. That to me is a Ralph DeVito, The Investment Center: How do you
driver for how you build a scalable business, whether you’re at balance the group [of advisors] you bring in to discuss
the advisor level or at firm level; it’s working for us. technology at your firm?
We have an advisory council of forward-thinking
Amy Webber, Cambridge Investment Research: folks. Everyone says, “We need ‘this.’” You can spend all this money
You start with your value proposition, and ours is to build “this,” but then you may find that almost no one buys it.
client experience, an intimate client experience. That said, we look at this as a whole plan with everything
The trick for us has been scale and maintaining being integrated, and it’s coming together. What we’re finding
that client experience, as it is still in demand. And that’s where is that we have to teach each registered rep or staff member at
the technology comes into play. It allows us ... to take control of a regional office one on one; by doing that, they learn to adapt
that ourselves and to partner with some entrepreneurial tech- and get into that [innovative] mindset.
nology firms, but a lot of it is ours.
We have a situation right now where our end-to-end digitiza- Stringer: We look at [our advisors] through the [tech] adoption
tion, along with client experience, means we believe in being fully bell curve. We’ve got an early adopter group, roughly 10% or
digital end to end. Ultimately, we need to get to this, because we about 10–15 of our advisors.
need to compete and to be able to compete on price, as well. We’re a small firm, so we have to be nimble and quick. Still, it
Really this is all about the advisors. They have to compete — looks like some of this is taking off; we get [new tech] adopted
and they need more from us for less [cost] now, so they can pretty quickly. But we’re not going to do the experiments,
really go out and compete in the market. though the bigger firms can. —Janet Levaux & Ginger Szala

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