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- In the wealth management industry, where competition for adviser talent is fierce, candidates looking to make a jump are grilling firms about their technology.
- Wealth management executives and recruiters interviewed by Business Insider said client- and adviser-facing tech - from cloud offerings to video-conferencing capabilities - is becoming crucial.
- Deutsche Bank is launching a new tool this summer to help bring wealth clients onboard more quickly, and Morgan Stanley in May rolled out online scheduling for clients and advisers to set appointments or video conferences.
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Technology has become a recruiting battleground in the wealth management industry, and it's not just the tools clients see -firms also need to keep advisers happy behind the scenes.
Business Insider talked to executives in charge of digital platforms at Morgan Stanley and Deutsche Bank's wealth management arms about how they build and pitch new technology, and what's coming next.
Wealth management is a prized business for banks looking for stable fees to balance out more volatile businesses, and competition is fierce - especially as older advisers retire, options to go independent grow and the next generation of potential clients gravitate more to robo-advisers aimed at the "mass affluent."
But even Deutsche Bank, which is undergoing a massive overhaul and axing 18,000 jobs in areas like equities trading and sales, has 3,000 wealth professionals and still wants to add 300 more around the world.
Prospective advisers are "very interested in our product capabilities, our technology capabilities," Thomas Klemm, the global head of digital for Deutsche Bank's wealth management arm, told Business Insider at the unit's Manhattan offices. "Clients expect 24/7 access to their statements, their accounts - but also what happens behind the scenes?"
Deutsche Bank is launching a tool in the US this summer to improve its "know your client" technology, Klemm said, which will speed up the process of bringing new clients in.
Also on the to-do list are improvements to the bank's "DPM" systems that help managers rebalance portfolios - Klemm said that a "big enhancement" is in the works, with changes expected next year.
Morgan Stanley, with more than 15,600 wealth advisers, has been less vocal about aggressively recruiting, but still sees tech as a way to get and keep top talent.
When talking to potential advisers, one of the first questions is usually: "What is your technology like?" said Paul Vienick, head of digital client platforms at Morgan Stanley Wealth Management. Vienick joined Morgan Stanley in late 2016 from Bank of America Merrill Lynch, where he ran Merrill Edge, an online discount broker.
In late July, Morgan Stanley launched a digital document sharing tool for wealth management in partnership with cloud software company Box.
Vienick flagged the digital document vault, an asset aggregation tool (which allows advisers to see all client assets, not just ones held at Morgan Stanley) and video-conferencing as some of the biggest areas of interest for the firm's existing advisers as well as those thinking about joining.
"I've seen a much more aggressive evolution of embracing digital on behalf of the adviser," Vienick told Business Insider. "There truly is an expectation that digital comes first now, whether that is an existing adviser, or it's a new adviser that's potentially joining."
Morgan Stanley has been consulting with committees of its own advisers on what their needs are and technologies they would like to see. Vienick said he and his team also often meet several times a month with potential new advisers to give them walk-throughs of the bank's platforms.
One of the team's more recent initiatives was an online scheduling tool rolled out in May.
"If the adviser has enabled that service and has put their available time in the system, the client can go online and sign up and schedule time to either talk with their adviser, or have a video conference," Vienick said.
Morgan Stanley has also rolled out its digital mortgage tool to existing clients since this January. The firm's digital head for wealth management, Naureen Hassan, introduced the platform in June 2017.
"The days of just walking into an office or just picking up a phone call is not where it's at any longer," Vienick told Business Insider
Recruiters who spoke to Business Insider agreed that tech was top of mind for advisers across the industry. To be sure, factors like compensation arrangements, expectations for selling other products, and firm culture can all play into the decision to make a jump.
"You're never further than two or three sentences into a conversation with a financial adviser about a potential move before the question of technology," Chris Stringer, the manager of the financial services division of Robert Walters, an international recruitment agency, told Business Insider.
Adding to the competitive landscape are wealth managers who seek to transition to independent registered investment advisers (RIAs) from legacy wirehouses, said Mindy Diamond, the president of financial-adviser recruitment firm Diamond Consultants.
"There's an enormous shift" in the value that wealth managers place on the technology that firms offer, Diamond told Business Insider. She added that one of the top five reasons someone might move is a result of seeking out improved technology.
"It's a totally different mindset than at the wirehouses, which are dependent on legacy technology," she said.
The total number of independent and hybrid RIA firms has grown to nearly 17,000 from 15,000 in five years through January, according to data from industry research firm Cerulli Associates as first reported by InvestmentNews.
Meanwhile, independent broker-dealers' (IBD) growth has outpaced that of wirehouses, according to Cerulli data, which considered headcount and asset growth in its assessment.
Firms' wealth product offerings may be "comparable," said Douglas Rickart, a vice president for financial services at the international recruiting firm Robert Half. But it all comes down to how that's delivered to the client.
"For advisers looking to make a move, they are looking for an edge as well," Rickart said.
Morgan Stanley's stance on recruiting has shifted since late 2017 when it exited the Broker Protocol - an industry agreement that makes it easier to avoid legal troubles when leaving firms with clients in tow - and the bank's executives on earnings calls have been emphasizing using tech to bring in more revenue from existing advisers.
Still, Morgan Stanley CFO Jonathan Pruzan noted on a first-quarter earnings call that the firm was now seeing a pickup in interest in joining its digital platforms after a slow 2018 for recruiting.
