We have seen an explosion of articles about how firms need to improve their client experience (C/X) – why it’s so important and how companies can’t survive without it and why we need to be more like Amazon or Apple in how we treat our clients.
For many broker-dealers, IDBs, roll-ups and outsourced trading firms in Wealth Management, the client is the advisor and what matters is the advisor experience (A/X). A/X is a measure of advisors’ overall sentiment through every interaction that they have with a broker-dealer or RIA technology platform. How advisors interact with systems and processes and how efficient they are at doing their jobs needs just as much analysis and improvement as the client experience, if not more!
Most fee-based advisors believe that their value is best expressed via Rep-as-PM (RPM) programs where they are responsible for building, managing and trading their clients’ portfolios. The money flows are following this, as Cerulli has reported that RPM assets increased 34% in the past two years to over $1.5 trillion.
At the same time that more advisors are handling more investment tasks, we’re seeing broker-dealers and RIAs increasing their outsourcing of trading. While the amount of outsourced assets is estimated to reach $4 trillion this year, what companies are discovering in using TAMPs is that they are giving up control over critical aspects of their A/X, especially for RPM advisors.
Since outsourced solutions have to build scale in order to be profitable, they often handle trading operations for dozens of firms and are not able to spend the time needed to customize services for any single one. RPM advisors are left with less ability to influence the very trading that they believe is their primary value added.
There is an alternative for companies that want to improve their A/X for trading. It is the recent development of Order Management System (OMS) application programming interfaces (APIs). Wealth management firms now have the option of branding and skinning their own trading platform in a matter of months to regain control over their trading A/X.
But there is more to order management than just adding a company’s logo to a screen – OMS as a Service allows for far more control over the trading experience. To help attract and retain advisors, firms should review the following tips for improving their trading A/X.
The following tips describe best practices for planning and implementing a better trading A/X.
OMS as a Service provides full trading functionality via the software offering of a trading platform vendor. These platforms offer the following benefits:
Leveraging OMS APIs provides firms with greater control over the trading A/X and is not constrained by the vendor’s pre-defined processes. The products they offer and the trading strategies they implement serve as points of demarcation between wealth management firms. Because of these differences, OMS as a Service offers an alternative to TAMPs that can better accommodate RPM offerings.
Another plus of OMS as a Service is complete control over future UI upgrades to avoid the impact of unscheduled upgrades on advisors’ workflows. With more and more advisors working remotely, scheduling upgrades can be a tricky business. By retaining control of this process, firms can ensure that any upgrades are performed at the time that works best for the firm.
Additionally, a new OMS can be rolled out quickly using an OMS API. In some cases, this can be done in less than 2 months, enabling firms to quickly update their trading capabilities rather than undergo a long, grueling planning and implementation process to build their own OMS. Once an OMS API has been adopted, additional, more complex functionality can be rolled out in future phases as needed. It’s not a one-size-fits-all solution like a monolithic TAMP.
Most companies do not have access to the necessary domain expertise to build an OMS, especially with all of the connectivity required to external trading venues and support for advanced trading features. Use of OMS as a Service removes the need to establish this expertise within a firm, with all the associated expense and staff time it would require.
Leveraging OMS as a Service provides the benefit of access to a mature product that has survived the stress testing of operating in the marketplace, which typically weeds out poor products/solutions. While the control offered from constructing an inhouse trading platform can appear attractive, the availability of mature systems that have survived under fire for years offers a less risky alternative, especially when combined with APIs that enable use of the software in a highly customized form.
The modern trading landscape is highly complex, requiring systems to offer a wide range of functionality and asset class support to deliver the flexibility that advisors demand today. This flexibility is a core component of the advisor trading experience that the best wealth management firms know they have to deliver.
These firms are providing greater control over their trading A/X by implementing OMS as a Service. This offering allows customization of each point of the trading process. With firms across the industry fighting to attract and retain the best advisors, the ability to differentiate themselves through a customized RPM platform with a superior A/X by OMS powered as a Service is a key factor in accomplishing this.
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 Cerulli MMI Advisory Solutions Quarterly 4Q’18
 Ramping Up TAMPs for 2019 and Beyond, WealthAdvisor