Originally published in Forbes | by Tom Groenfeldt | June 19, 2020

Excerpts from the full Forbes article below:

The growing complexity of wealth management requires better technology, says Anton Honikman, the CEO of MyVest, a wealth management software firm that TIAA acquired in 2016.

“Ultimately I see an evolution of the wealth management industry away from a product-centric view of the world to a client- or customer-centric view. The challenge for the industry is that the legacy systems that support wealth management firms are fundamentally product-centric. We are positioning MyVest in the vanguard — small v — in the move to a customer-centric view of wealth management.”

That will require personalized investment solutions rather than products, he added. “It will also require tax management, optimizing an investment solution for taxes, and a holistic purview that looks into as complete a profile of the customer’s financial circumstances. That means an understanding of the household balance sheet including accounts held away, plus a customer’s preferences, goals, values, tolerances — these are all central to wealth management, not incidental.”

Successful firms understand this isn’t just an issue of technology, he said.

“It’s an ongoing process that has to be nurtured, new types of advisors will be required, new channels created.”

Personal Capital has demonstrated that MyVest tools can attract high net worth clients to a predominantly tech, or tech-first, wealth management program supplemented by human advisors.

“Personal Capital has been a high growth investment manager since the beginning, and MyVest has been with us for the entire ride,” said Brendan Erne, director of portfolio management at Personal Capital. “We now manage over $12 billion in asset for more than 20,000 households. That kind of growth wouldn’t be possible without a portfolio management system that can truly scale. Moreover, their platform is extremely flexible, allowing us to turn numerous processes on autopilot while also maintaining our desired level of human oversight.”

TIAA uses MyVest software to help run three very different managed account programs serving three different segments (retail, mass affluent, and high net worth (HNW), using multiple custodians on a single unified system.

“We have a big enterprise platform that is highly configurable,” Honikman said. “TIAA and Personal Capital don’t have the same business model but both use our software to build personalized investment solutions for customers.”

“We are continuing investment in our platform, in three directions. One is further investing in the world of tax management, tax optimizing investment solutions, a sophisticated ongoing influence over how a portfolio is managed on an ongoing basis to minimize tax burden,” he explained. “Another area is user experience for all the multiple members of an organization who have role-based entitlement to the platform…advisors, operations, the investment team, investment IT people, compliance. We are investing in improving the user experience in all those roles. And third is data analytics to understand customers better and achieve better outcomes for the individual investor.”

…

Read the full article from Forbes, and learn more about how we work with TIAA and Personal Capital.