December 17, 2015 8:44 pm

Joel Bruckenstein – Q&A with FolioDynamix

FolioDynamix held a virtual chat with fintech expert Joel Bruckenstein to get his views on how technology is impacting the wealth management industry and an investment advisor’s ability to meet rising client expectations. Here’s what he had to say…

Q: What is impacting wealth management client expectations most right now and how will advisor technology help the advisor be successful?

I think that the retail-facing digital platforms are definitely impacting client expectations right now.

Like or hate robos they are changing client expectations around what they expect from their next advisor. There is an expectation of a great online experience, 24/7, from any type of device. Clients expect easy navigation, clear, concise reporting, and transparency. I think we can expect some fee compression as well.

Q: What can we learn from robo-advisors about how to engage with clients?

I think we are learning that we can’t dictate how clients will interact with us. We need to be able to interact with clients on their terms at a time that is convenient for them.

I think that many firms have their heads stuck in the sand. Many advisors were slow to realize that these new digital platforms present both a threat and an opportunity. The threat is that if you ignore them, your business may be irreparably damaged; not overnight, but by the time you wake up [to reality], it could be too late. The opportunity is to harness these same technologies and adopt them to your own business model

Q: We accept that robo-advisor technology is changing things, but is there an equally important issue in that many advisors are not technology engaged in general?

Well, the average advisor is over 55 years old, so they are probably not the most tech savvy demographic out there. In addition, most are so pre-occupied with the daily needs of their business that they perhaps are not paying as much attention to the evolution of technology as they should.

Q: Do you see opportunities with emerging affluent/millennials and what are the expectations around technology?

Look, if you are not using state of the art technology, you are not going to attract Gen X/Y clients. Furthermore, you are not going to be able to hire top Gen X/Y talent if you have antiquated systems.

Q: Omni-channel client engagement—what do you see as future trends and impacts on advisor technology?

I’m thinking about how we have so many silos of technology that don’t talk [to each other]. There has been a tendency on the part of advisors to look at every technology decision in a vacuum. Advisors have not paid enough attention to how all the pieces fit together. That applies to their third party technology partners as well as their custodians and broker-dealers. If all of the systems cannot communicate and share information effectively, you are going to have major inefficiencies.

APIs are becoming commonplace driving persistence across engagements and devices. APIs allow disparate systems to communicate with each other and share information across platforms. This is a net positive for the industry. My only caution is that not all APIs are equally robust or equally effective. Advisors need to perform some due diligence to determine if the APIs their providers offer are sufficient to service your needs.

Q: In the age of on-demand technology, do you think things like quarterly performance reports could become nothing more than an artifact much like custody statements?

That may be true. It is important for advisors to be able to provide performance data to clients, but in my opinion, providing quarterly performance numbers to clients is a disservice. We talk to clients about long term planning, and then we provide quarterly performance reports? Isn’t that sending a mixed message? I think that in the future, there will be much less emphasis on short term investment performance and much more emphasis on whether or not the portfolio is well aligned with the client’s long-term financial goals. The measure of success should not be beating a benchmark, it should be meeting all of a client’s financial planning goals.

Q: How do advisor’s digital advice platforms become more than just a place to prospect for new clients and instead become a central component of how they engage with clients?

By making it interactive and engaging so the client want to visit regularly.

Q: What will tools allow advisors to do in the future?

I think that there are a wide range of technologies that will impact this [wealth management and fintech] industry within a few years. These include wearables, big data and facial recognition software. To cite just one example, facial recognition might be used in a number of ways. One is as a form of authentication, so we don’t have to remember to change passwords any more. Facial recognition technology might also be used to better understand clients’ attitudes towards rick, enabling advisors to create portfolios that better reflect the needs of their clients.

Joel-BruckensteinLearn more about Joel Bruckenstein at or meet him live at his next T3 conference February 10-12, 2016. Details at

Joel Bruckenstein is not affiliated with FDx Advisors, Inc. and his comments and remarks do necessarily reflect that of FDx Advisors, Inc.