Fidelity Seeks to Empower Newly Tech-Savvy Advisors

by Jane Wollman RusoffMay 20, 2024The COVID-19 pandemic brought devastating consequences and reverberations. But here is one positive: It pushed the use of technology forward. The financial services industry is a prime example.“We’ve seen a tremendous uptick in [tech] adoption post-pandemic. That was the renaissance period … an upsurge in tools being used by advisors,” Marissa Herr, head of technology consulting at Fidelity Investments, tells ThinkAdvisor in a recent interview. “Now, many advisors have started to gravitate to other tools because they’re seeing the impact they have.”Herr and her team of 16 help advisors integrate technology within their practices, either newly launched or established businesses.In the interview, Herr explains the benefits of being “digital-first” and discusses Fidelity’s “Digital Empowerment Framework.”More than 25% of Fidelity employees across the firm’s major business lines are focused on technology — developing it, consulting about it, interacting with it with clients.She also reveals that the firm is developing tools based on generative artificial intelligence, while noting that “with AI, there’s always risk.”Fidelity, she says, is therefore carefully monitoring the internal use cases it’s working on before bringing them to market.The company’s recent tech stack study shows that advisory practices using the right technology to meet needs are growing faster than those who fail to work with it.In the interview, Herr strongly urges advisors to “let your business strategy define your technology strategy and outcomes — not the other way around.”Here are highlights of our conversation:THINKADVISOR: Are advisors more amenable to using technology? Earlier, many shied away from it, especially older financial advisors.We’ve seen a tremendous uptick in adoption post-pandemic. That was the renaissance period, when a lot of new advisors began looking at tools that maybe they traditionally never had. There was a definite upsurge in tools being used by advisors.Now, many have started to gravitate to other tools because they’re seeing the impact they have.We know from our recent advisor tech stack study [released April 29] that firms who are digital-first and using the right technology to meet needs are growing faster. They’re more efficient than the firms who aren’t doing that. Technology is an enabler, giving advisors time back in their day to focus on relationship-building.What are some ways that Fidelity helps firms become digital-first?We’re offering a digitally powered client portal. Another option is our integration with client management tools, which help firms engage with clients throughout the year to set up meetings and events and to understand the relationship. We’re in a relationship-centric business.What’s one important way that you and your team help advisors?We talk to advisors throughout the year in the key areas of platform utilization, workflow optimization, integration solutions to make sure all the tools are working together.Does the team work with both startup firms and longer established ones?We help advisors at every stage whether they’re launching a business for the first time or looking to grow.For [the latter], we assess current workflows and platforms to figure out a better way to get their processes done.Your “Digital Empowerment Framework” addresses tech strategy, design and activation. It’s on your website, but to whom is it available?Any firm that partners with Fidelity can take advantage of it. It gives advisors the tools and insight to focus on how to best leverage technology to interact with clients and grow their business.How do advisors benefit from being digitally empowered?For some firms, it makes it easier to onboard clients. Other firms may be focused on better communications strategy.It’s really important that firms start with their business strategy first — their goals and what they’re hoping to achieve. Then the technology can complement that strategy. We always say, let your business strategy define your technology strategy and outcomes — not the other way around.To what extent is Fidelity providing artificial intelligence technology?We have a number of tools in our ecosystem that already use AI — to ask a virtual assistant questions, for example.We’re exploring generative AI and working on a number of internal-only use cases. With all aspects of AI, there’s always risk; so we still need to understand and monitor AI before we bring things to market.What are a few of those internal use cases?From a custody and clearing perspective, some are centered around training, aggregating a great deal of information about policies and procedures; others are focused on research.Is financial advisors’ use of digital tech reducing in-person or phone communication with clients?It’s complementing those. It’s up to the advisor to understand and offer choice to give their clients options.According to our studies [and others], most firms in the industry are gravitating to digital interaction.There has been a tremendous rise in Zoom-like, or digital, meetings that started during the pandemic and continued.Broadly, what’s new in wealth management at Fidelity?We’re focusing on technology and making sure that advisors are aware of the capabilities that we offer. An example of that is our recent tech stack study.What’s new product-wise?We know that advisors are looking to offer further diversification, so we recently released three more actively managed liquid alternative ETFs to complement their portfolios.What about business management geared to financial advisors?We just launched a new growth hub, a one-stop shop to help advisors [learn] how to grow their business [organically]. It has resources for [adding clients and scaling their businesses].You conduct “voice of client” analyses. Please explain how they’re useful.“Voice of client” is the heart of how we bring new things to market and better serve our clients. Throughout the year my team meets with hundreds and hundreds of existing and prospective clients.We take in a lot of feedback on things that are working really well and where opportunities are for us to do things differently.We synthesize all that and bring it back to our technologists, who are responsible for delivery, to understand the needs of our clients.The original version of this story was published on ThinkAdvisor.