What Financial Advisors Can Get Wrong about Technology

Last Edited by: LPL Financial

Last Updated: February 28, 2022

Gary Carrai image

WealthManagement.com interviews LPL’s Gary Carrai, executive vice president in charge of third-party technology partnerships

Technology can help financial advisors better serve clients. It can also create barriers if not deployed correctly. A cohesive, interconnected set of tools is essential to running an efficient, effective financial services practice. If you’re a financial advisor coming from a wirehouse, you may not have the knowledge of options available to you. Your experience may have been limited to what was available at the wire, so you’ll have a lot to learn about the broader tech landscape. If you’re an independent advisor, you may have cobbled together systems piecemeal over time, with possibly overlapping, underutilized, or superfluous functionality.

Designing a tech stack is a tough job, which is why LPL Financial relies on individuals like Gary Carrai, executive vice president in charge of third-party technology partnerships. Carrai helps ensure the third-party applications available to financial advisors through LPL’s ClientWorks all work together as smoothly and seamlessly as possible.

In an interview with WealthManagement.com’s Advisor Innovations podcast, Carrai discusses the landscape of financial technology, how it can be best used — and misused — and how LPL gives financial advisors freedom of choice while maintaining an integrated ecosystem within ClientWorks. Following are a few key highlights:

How far along have advisors come in terms of adopting technology?

When asked this question, Carrai’s response included:

“In the last 10 years, you've had dramatic change and innovation, which has been wonderful. But it's created an issue where either advisors don't know what to use, or if they are choosing different technologies that are disparate and not connected to each other, and it creates efficiency issues. And then they get frustrated and stop using them. … That's part of it — the advisor adopting new technologies. I do think it's incumbent upon firms, particularly the size of LPL, to ask how do we be better? How do we be better at rolling out technology? How can we be better at making our own technology intuitive and clear? How do we think about helping advisors?

So I do think advisors could do better job of adopting it, but it's not all on them. I think it's incumbent upon larger firms that work with advisors to be able to support them in a way that leads that adoption.”

Are advisors looking for all-in-one solutions?

WealthManagement.com’s David Armstrong brings up the pendulum swing of limited options to overwhelming options and back toward bundled solutions. He asks Carrai if advisors are looking for all-in-one solutions. Carrai responds:

“It's exactly that journey. Pre 2010, it was primarily all-in-one systems, and they led to efficiency, but maybe they didn't have the competitive pressure of innovation.

And then you've had massive innovation that led to this incredible choice. There’s that shiny new toy, the new technology that you’ve got to have, and then it becomes separate from everything else that you're doing. Then you lose that efficiency.

So I think it's moved back to all-in-one solutions. But again, I think you've got to determine what's right. … It just depends on how they focus their practice and where their skill level is. And how they're delivering their service to their clients.”

What trends are affecting wealth management?

Armstrong asks Carrai to discuss trends in wealth management technology. Carrai explains that since COVID-19, operations have become increasingly digital. This has a number of effects, some good and some challenging. One of the challenges is that people now have tools that give them greater access to their portfolio information, and they’re over-monitoring and over-tinkering. Carrai explains that technology, such as proposal or financial planning systems, can change its terminology to better prepare investors to be patient.

He also discusses increased interest in annuities and insurance, as well as LPL’s Meeting Manager within ClientWorks, artificial intelligence, and cryptocurrency.

Listen to the full episode

To hear all of Carrai’s insights, listen to the full Advisor Innovations podcast episode on WealthManagement.com.

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Wealth Management’s Advisor Innovation Podcast

Technology can help financial advisors better serve clients. It can also create barriers if not deployed correctly. Listen to Gary Carrai discusses both.

LPL Financial’s Technology Solutions

LPL continues to create technology solutions for financial advisors to help advisors improve efficiency to give them more time to serve their clients.