Networking and Tech Gadgets Attract Wealth Advisors to Big ABA Trust Convention This Week

American Bankers Association wealth management and trust conference brings cutting-edge technologies together with the industry’s decision makers under the banner of building stronger client relationships and enhancing business.

In a few days, an elite 500 or so bankers and other financial professionals will be in Scottsdale, Arizona hammering out the future of high-net-worth advice, and open architecture investing will be front and center.

The American Bankers Association is the elite trade group representing the industry. Just attending the three-day conference can count as a full year of continuing education credit for certified financial planners.

And on average, the people there manage well over $1 billion apiece.

With that kind of firepower packed into one place, the talking points are likely to set the tone for wealth managers and trust companies over the next year.

The “holistic” era is here

If the list of exhibitors is any guide, this is the year giants and niche players alike aggressively roll out solutions that give advisors a 360-degree view of their clients’ finances while keeping the assets under direct supervision.

"Our goal this year -- as always -- is to give trust companies the tools they need to be as effective, profitable and client-centered as they can be," says Jonathan Flitt, director of Citibank’s Investor Services unit. 

Flitt's team will be coaching the crowd at booth 312 how true front-to-back open architecture solutions are finally available and already transforming the business.

The linchpin here is Citi's "unified managed household" structure, which aggregates data across all accounts- -- trust and brokerage, throughout a client family’s financial life -- and then gives the advisor the keys to that fully loaded car.

Naturally, a clearer view of the data means more efficient wealth management practices.

And as these solutions move toward the center of the industry, Flitt says early adoption can get firms ahead of both the learning curve and the earning curve.

"Wealth managers who are already thinking in these terms can definitely grow their assets at the expense of competitors who aren't," he says

Once niche products, the unified managed account structures that make those efficiencies possible are already hitting the mainstream -- and again, there will be plenty of UMA vendors exhibiting their wares at the ABA conference.

The proposition driving advisors to adopt UMA structures is simple. By importing the best investment ideas the industry has to offer, even a small institution can give its clients best-of-breed portfolio management without breaking the budget.

And unlike conventional “separately” managed accounts that export the assets to the third-party managers to trade, UMAs let a trust company or other fiduciary retain direct custody.

The money doesn’t move. Only the investment models come in to be “overlaid” on your client’s wealth.

One product they’ll be talking about in Scottsdale is Smartleaf’s model distribution service, which promises to streamline both sides of the overlay relationship.

“This will make it much easier for wealth managers to bring in outside models, track the ideas they’re using and automatically receive updated models as they change,” says Jerry Michael, the company’s present.

Once the web-driven version of this product rolls out, you can think of Smartleaf as the “app store” of investment strategies for participating advisors to load with all the third-party models they need.

As the “idea store,” Smartleaf handles the billing and the bookkeeping. And because participation is open to any manager willing to sign up, the architecture is completely open.

Naturally, the relationship can go both ways, Michael tells me.

He has a few customers who push one or two in-house specialty strategies back out for other firms to buy while importing the models that run the other allocations in their clients’ portfolios.

As a result, he says, if the flows work out right, that push/pull approach to overlay management can become both a cost-saving measure and a bona fide profit center -- a promise few wealth managers can pass up.

Automating the back office

Smartleaf is also deepening its own “holistic” capabilities to let participating advisors automate basic tax strategies across third-party allocations, ensuring that the right shares are sold to match capital gains to losses.

Automation is also in the air in the trust accounting space.

Infovisa is coming off a record-breaking sales year and is eager to demonstrate its new automated account review and risk management systems at the ABA show.

“Prospective clients who currently use similar products offered by our competitors have also told us it is more functional and user-friendly,” says Mike Dinges, the company’s president.

One edge here is integration. Infovisa runs those risk management tools right in the accounting platform, eliminating the need to run two applications at once and pass data between them.

This, in turn, cuts down on the amount of babysitting that staff have to do and lets the automation actually save labor instead of creating new work.

And as for 2013, Dinges tells me he’s got a true industry smash moving toward the launch pad: mobile applications.

By this point, just about everyone in the business who wants a tablet computer has one -- and if not, vendors like Citi are giving iPads away.

But even in high-powered groups like the ABA, mobile interfaces have lagged the hardware. Next year, once the account structures are in place, that may finally change.

Scott Martin, senior editor, The Trust Advisor.


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