Page 30 - Investment Advisor June 2023

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digital tools will allow advisors to reach more prospective Advisors will have lots of options when it comes to chart-
clients. “Advisors have an incredible opportunity to grow their ing their futures — and must weigh them carefully. “Many
business through digital prospecting efforts,” according to Eric firms will have to make some tough choices about whether
Clarke, CEO of Orion Advisor Services. “Historically, firms they want to compete with the biggest players, attempt to
have used marketing tactics like direct mail, seminars, dinners, join them or stay independent,” said Heather Fortner, CEO of
and radio and TV ads — all of which are very expensive and SignatureFD, a financial advisory firm. “There’s no right path.
often time-consuming. It’s all about leaning into the values and long-term goals you
“But today, firms can invest a reasonable amount of money have as an organization.”
in digital marketing tools to reach their target audiences effi- rIAs will continue to evolve in response to client needs.
ciently and effectively. It allows them to work smarter, not “Everything will continue to change at a macro level, RIAs will
harder,” Clark said. continue to evolve and deliver a valuable service to clients as
the industry and its clients will benefit from greater diver- their most trusted advisor, and they’ll do it more consistently
sity. “I’m hoping there will be a lot more diversity, not only day-in and day-out,” said Brian Hamburger, president and
because it is the right thing to do, but also because it’s what CEO of MarketCounsel Consulting. “It will seem at certain
keeps the profession moving forward,” explained Nandita moments like the industry is ‘taking off,’ when in fact it has
Das, professor of finance, director of the Financial Planning been consistently marching forward in lockstep with its cli-
& Wealth Management Program and the Financial Literacy ents’ needs all along.”
Institute at Delaware State University. “Clients are growing Get ready for more automation. “The most exciting oppor-
more diverse, and they need advisors who understand their tunity going forward will be the continued drive to automate
unique needs and perspectives.” mundane and repetitive tasks so that advisors can spend

BDs’ Capital Market Operations Must Evolve: Pershing
The capital markets industry is facing a significant period of age and make effective use of: By 2025, the amount of data
challenge, according to a new report from Bank of new York generated daily is expected to reach 463 exabytes (two to the
mellon’s Pershing. many broker-dealers currently face both 60th power bytes or roughly 497 billion gigabytes). Seventy
short- and long-term strategic pressures. The largest institu- percent of firms in the survey said they intend to increase their
tions are capturing a greater share, with the top 10 firms by investments in data, across integration, connectivity and ana-
revenue globally accounting for more than 50% of the equity lytics capabilities.
capital markets global market share and 41% of the debt securities as one such data-rich area: Asset- and market-
capital markets. level data, as well as less traditional financial data, can provide
Costs have grown 37% since 2012. Regulatory and compli- insights into investments and client needs.
ance demands are affecting small to midsize providers, limiting evolving client demand: Both retail and institutional clients
their ability to invest in their operating model and innova- have increasingly high expectations for their overall experi-
tion. In the u.S., the number of Financial Industry Regulatory ence. BnY mellon said the shift to platform interaction was a
Authority-registered firms shrank by 1,200 over the past 10 key theme in its research. An emerging generation of clients
years, a 25% decline. The Pershing study identified various wants less personal interaction, instead favoring data insights,
factors driving structural and systemic change. push messaging and simplified decision-making.
shifting market structures and foundational change: A clear separation in asset flows based on a broker-dealer’s
Industry leaders said changing competitive dynamics are digital adoption: The assets of strong digital adopters grew by
creating new lines of engagement and, in turn, leading to new 130% compared to a decline of nearly 40% for weak adopt-
touchpoints with clients and capturing a bigger share of data ers. nine in 10 larger institutions in the study outlined plans to
and revenue. increase investments in digitizing their client experience.
A shortening settlement cycle as electronification acceler- A new talent profile: The study showed a shift in broker-
ates: Settlement models and principles that are proven in the dealer talent requirements as a more digitized landscape, with
equity markets are migrating to the fixed income and foreign algorithmic, data-driven, electronic trading strategies and DlT
exchange spaces, driving greater efficiency and boosting the on the horizon, demands new skills.
velocity of cash and securities. As a result, firms today are looking for people who not
the emergence of distributed ledger technology: At pres- only understand the market, but are also digitally native,
ent, only small pockets of broker-dealers have adopted DlT, data literate and technically savvy. Study respondents cited
but many leaders say this area is reaching critical mass. competition for talent among their top three headwinds
the proliferation of data, which Bds are struggling to man- inhibiting growth.

28 Investment AdvIsor June 2023 | ThinkAdvisor.com