A New Advisor Tech Trend: Tools Specifically for Turning Hard-Earned Prospects Into Clients

Clients of the future will expect more and need more convincing before hiring a wealth manager.

Illustration by RIA Intel

Illustration by RIA Intel

In January 2021, Aite Novarica, a research and consulting firm focused on financial services, said changes to client prospecting would be among the top wealth management trends in the future. Their prediction was correct. In recent months, AssetMark, FP Alpha, and Catchlight have debuted, or revealed that they are developing, tools specifically to help financial advisors convert prospects into clients.

The influx of tools focused on helping advisors turn prospects into clients is a result of two ongoing, broader themes in the wealth management industry: an accelerated evolution of digital marketing due to the Covid-19 pandemic, and younger generations becoming significant earners and clients targeted by advisors.

In November, FP Alpha, a financial planning software that uses artificial intelligence to help wealth managers analyze tax and estate documents, launched a tool called “The Prospect Accelerator.” Advisors use the tool to create a “teaser report” and a financial wellness score for a prospective client. Those things help advisors broach the most meaningful topics with prospects and explain how they can help them if they become a client.

FP Alpha announced in January an integration with Envestnet’s MoneyGuide that eliminated the redundant task of entering data into both programs (advisors who use MoneyGuide pay a subscription fee to use FP Alpha’s software). As part of the FP Alpha package, advisors also have access to the prospect accelerator tool.

Doug Fritz, founder and CEO of F2 Strategy, a technology and marketing consulting firm to wealth management firms, told RIA Intel at the time that prospecting tools like this were unusual. “There are a lot of estate planning and financial planning tools available. There aren’t a lot of proposal generation tools out there. So, if they actually did a good job at that, that’d be pretty badass,” Fritz said.

Two weeks ago, shortly after FP Alpha’s integration with Envestnet, AssetMark, one of the largest turnkey asset management platforms used by more than 8,500 advisors managing more than $93 billion in assets, launched a tool that allows advisors to send prospective clients a hyperlink that leads them to a page where they can enter information like their investment objectives and risk tolerance.

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AssetMark’s tool, WealthBuilder Prospecting, is integrated into WealthBuilder, AssetMark’s portfolio construction software, and data flows between them so the advisor does not have to manually add it again when a client opens an account. Advisors will still need to gather some additional information but much will already be collected, eliminating some friction of the onboarding process, vice president of digital platforms at AssetMark Daniel Warburton told RIA Intel.

Catchlight Insights is a Boston-based startup that uses artificial intelligence, machine learning and publicly available market data to help advisors hyper-personalize their outreach. Advisors upload the names and emails or phone numbers of potential leads. Then Catchlight generates a sort of dossier for each prospect with information like their age, job, where they are located, and assets, and ranks them by how likely they are to engage. It began at Fidelity Labs, Fidelity Investments’ in-house fintech incubator, in 2021 and incorporated last year. It moved out of the beta phase last October and is allowing some advisors early access, the company told RIA Intel.

High inflation and expected interest rate hikes by the Federal Reserve this year could hinder rising stocks, or lead to an equity market downturn. If that happens, revenue at wealth managers that charge asset-based fees would also fall — unless they can bring in new clients and assets to compensate.

Prior to the pandemic, rising equity markets were the primary or only reason assets under management and fee revenue were growing. The pandemic was a wake-up call for the industry that had gotten rusty at business development, Dennis Gallant, a consultant at Aite Novarica, told RIA Intel.

But the wealth management industry has responded, investing in and embracing more digital solutions. Advisors’ meetings, conferences, client onboarding, marketing, and more have changed.

Meanwhile, “there’s a bit of generational shift that are happening and advisors had to change, to upgrade what they were doing,” Gallant said. “Millennials are here. They’re target clients now, but it’s a different marketing approach. It’s not your father’s Oldsmobile when it comes to marketing.”

Tools focused on getting prospects across the sales finish line are a response to that. They give advisors data-driven insights and the ability to further customize their approach and communication with prospects, improving the chances they become a client.

“Some of these new tools are really refining that process,” Gallant said.

Holly Deaton (@HollyLDeaton) is a staff writer at RIA Intel and based in New York City.

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