Suggestion Engine For Financial Advisors Finds Opportunities To Sell Clients Products, But Can It Be Harnessed By Fee-Only RIAs? Hot

RightBridge is a web-based solution from CaptialROCK, which was founded by John Hyde. Hyde led the team that built SunGard WealthStation, which today sits on the desktops of tens of thousands of advisors at wirehouses, insurers, regional brokers, bank trust departments, and other financial advice enterprises. RightBridge is yet another example of the boom in innovation and productivity occurring across American business and that I regularly document in the financial advice business.

 

RightBridge’s suggestion software does things CRM does not. Hyde says CRMs are great at setting up a process for handling existing clients but they do not analyze your client data and suggest opportunities. Landing credence to Hyde’s assertion is the fact that Ebix CRM, one of the largest CRMs in the financial services industry that is on about 125,000 advisor desktops, has partnered with RightBridge even though its CRM has its own “opportunities finder” module.

 

Hyde says that in his experience only about 20% of financial advisors use financial planning software. In addition, the 20% of advisors using professional financial planning software with clients only use with about 20% of their clients.

 

“Financial planning is great,” says Hyde. “I love it. But it just does not get done.”

 

“With less than 10% of advisor client actually getting a financial plan, it makes you wonder what the other 90% of clients are getting from their advisors,” says Hyde.

 

RightBridge scans and analyzes an advisors’ client data using algorithms to find automatically opportunities o sell them products, and fiduciaries would frown upon that. However, the rules engine can be built to support fee-only fiduciaries. We’ll come back to that later.

 

Hyde says that instead of an advisor conducting a tedious data-gathering process —as is required of financial planning apps today — RightBridge proactively provides advisors suggestions without requiring a “discovery” meeting with a client where you collect all their account and personal demographics. RightBridge relies on brokerage and account aggregation systems to collect to client’s assets, liabilities, insurance and other key financial and demographic data. For enterprises RightBridge targets, that’s fine. (For RIAs, collecting data on held away and AUM presents a challenge but it is not insurmountable.)

 

RightBridge’s suggestion engine is similar to what Netflix uses to pick movies you’ll like and to the way Amazon suggests items you might to buy. By looking at the sage of everyone in a family, RightBridge can suggest college-planning, life insurance, annuity and other products. It’s a needs-based analysis.

 

The system has been deployed in insurance and brokerage enterprises and, according to unaudited data from RightBridge, the average advisor acts on 37 suggestions a month and 32% result in a positive outcome — a sale, a pending sale, recommendation or scheduled follow-up meeting. Users of RightBridge average a 13.6% rise in revenue.

 

Hyde, along with RightBridge’s sales VP, Matt Paulsen, came to New York and met with me, and the Salt Lake City company team is impressive. Many of the company’s 12 employees formerly worked for Hyde in building SunGard WealthStation.

 

The history here is important. Hyde worked for Sterling Wentworth, a software company, and ran its financial planning division. When SunGard acquired Sterling Wentworth in the late 1990s, Hyde was brought over to run SunGard’s financial planning software effort. Hyde oversaw the purchase of Frontier Analytics, an asset allocation application integrated into WealthStation, as well as other small software companies that were successfully bundled into WealthStation and sold by SunGard to the enterprise market.

 

“I came into this with my eyes wide open,” says Hyde, “and I know that getting the client data is crucial to the success of the suggestion engine — garbage in, garbage out.”

 

Hyde says the RightBridge suggestion engine can be tailored to RIAs, which is why he contacted me. He is interested in creating a version of RightBridge that could be used by fee-only investment advisors.

 

Hyde says implementing the suggestion engine for an insurer is very different than in a brokerage, and that the software was built to make it easy for a business analyst — not a programmer — to create the rules used by suggestion engine. Thus, an advisor can configure RightBridge to monitor cash withdrawals from retirement plans or support other service-oriented objectives.

 

“You can build rules that would only recommend win-win opportunities for both the client and the advisor,” says Hyde. :”Just because it’s a suggestion engine does not mean you can’t make suggestions that promote win-win opportunities.” 

 

If you want to be on an advisory board to help RightBridge develop a version of its rules engine for fee-only RIAs, please let This email address is being protected from spambots. You need JavaScript enabled to view it..