InvestorCOM in the media: Investment Executive Article “The more things change, the more they stay the same”

New fintech entrants are changing the financial services landscape, but this technology breakthrough has been years in the making

There has been much written lately about an interesting new Canadian financial technology (fintech) startup, Vancouver- based Tridus Wealth Management, which has plans to offer a more cost-effective solution to investors through the better use of technology among financial advisors.

See Tridus launches entirely mobile advisor platform

Tridus aims to be a different kind of wealth-management firm — one without an office and without paper — that can still offer its clients a full slate of services. How will it do that? By leveraging mobile technology, cloud computing and a fresh approach to providing financial advice without drowning its clients in paperwork and compliance. In the process, Tridus says it will reduce its clients’ wealth-management fees by 25%, so this sounds very much like a win-win.

What’s more, this is not the same as robo-advisors; in fact, Tridus will have real advisors who build customized portfolios for the clients they serve, including everything from mutual funds to exchange-traded funds traded to individual stocks.

The advisors will use mobile devices such as laptops or tablets for their meetings with clients, and those meetings can be in person, through video conferencing, or on the phone. The client just logs into a client portal and is guided by the advisor along the way. The service will also include quarterly reviews and investment statements, but it’s all done via remote access.

This approach is in sharp contrast to the services provided by many larger financial services institutions, most of which are trying to innovate in this area but are struggling to overhaul their legacy systems — not to mention struggling to overhaul their traditional, conventional thinking and processes. Although innovative thinking may well exist in these larger organizations, mobilizing the enterprise is often the challenge as there are more lines of business to involve and more advisors to equip with the proper tools.

As an example, I met with one of the big Canadian banks recently to discuss its mobile and electronic delivery strategy. Along the way, I learned that none of its thousands of advisors are issued iPads or tablets to do their job, while only 20% of them use their own personal tablets at work. But while the big banks may be slower to innovate, their consumer base is, for now, fairly loyal.

The challenge for these new Canadian fintech firms is one of inertia. If they are to succeed, they will need to overcome the market dominance of traditional financial players, such as the big banks, along with these banks’ brand awareness and, maybe most important, the trust that banks have built up with consumers over a great length of time.

Twenty years ago, I worked for Communicopia, a small Internet pioneer. After launching a successful product for mutual fund companies called The Fund Library, the firm turned its attention to advisors by introducing f/A Connect, which was aiming to be the Internet workplace for financial advisors. f/A Connect had all of the business building tools that advisors needed, including personalized advisor web profiles, financial product information and pricing, news feeds, online conferences, professional development courses, event management for industry and third-party events, discussion forums, email templates, newsletters and more. After some initial success licensing the technology to some banks and dealerships, we ended up disassembling the product’s functionality and selling it off for parts. It was just another casualty of the dot-com meltdown.

In retrospect, I believe f/A Connect was a little ahead of its time. And now, as I look at a new breed of fintech players, I’m reminded that while some disruptive new entrants are able to transform entire verticals overnight (witness Uber’s impact on the taxi industry), there are some sectors such as financial services that are more resistant to change.

Make no mistake, however. Technology is definitely changing the financial services sector, even though changing the status quo takes time.