TECH TUESDAY is a weekly content series covering all aspects of capital markets technology. TECH TUESDAY is produced in collaboration with Nasdaq.
In the increasingly competitive and rapidly evolving business of financial advisory, a competitive advantage goes to advisors who have more availability for clients.
The number of hours in a day is fixed, so the only way for a financial advisor to carve out more time for the client is to be more efficient at the behind-the-scenes work such as research, compliance and account administration.
Maximizing efficiency in the critical research function is the premise behind Fundinsight.nasdaq.com, a free online platform that aims to speed up exchange-traded fund (ETF) and mutual fund research. Launched by Nasdaq and ETF specialist Trackinsight in December 2022, the platform enables the comparison of more than 38,000 ETFs and mutual funds and is used by more than 1,500 FAs.
“The industry is changing – technology is disrupting the way that advisors are doing their homework on funds,” Ben Jones, Head of U.S. Index Licensing at Nasdaq, told Traders Magazine. “We’ve heard directly from advisors that they want more time to work and interact with clients. They are spending so much time on mounds of research and need quick and easy ways to share insights and trends with clients.”
In a February 2023 report, Coalition Greenwich noted that “billions of dollars” have been poured into innovating data and analytics for wealth management firms by large data providers such as Nasdaq, BlackRock, Bloomberg, Broadridge, FactSet and Morningstar.
“The accuracy of market data and investment data is absolutely critical to the success of any FA,” or financial advisor, the report stated. “The competition among (data providers), bolstered by the quick advancements of startups, broker-provided offerings and others, ensures that advisors continue to see better access to better data and analytics year after year.”
Providing solutions for financial advisors has been a part of Nasdaq’s business for many years. In 2015, they acquired Dorsey, Wright and Associates, which includes research, analysis, portfolio management and asset allocation tools directly to financial advisors. The business has been rapidly increasing the availability of its strategies across a large number of Managed Account platforms and licenses its momentum-style methodology to global asset managers to create ETFs.
As Nasdaq’s Jones recalled, the exchange operator’s market research identified a too-common problem of financial advisors being so busy with research that they didn’t have proper time for business development; also, many data and analytics platforms were cumbersome. Jones says Nasdaq sees Fundinsight as an extension of an advisor’s toolbox. Specific features on the platform include Smart Substitutions, Exposure Check and a personalized newsroom.
“One of the biggest ‘ah-ha’ moments in developing the site came from sharing the Smart Substitutions tool with a test group,” said Jones. “Fundinsight was developed to fill a gap in the marketplace as there is no platform out there like this, especially one that’s free.”
SEI, a technology and investment solutions provider for wealth management firms, cited capacity as the #1 challenge for financial advisors in 2023. Beyond the obvious, but possibly not feasible, fixes of hiring more staff or culling the client roster, SEI suggested leveraging partnerships and building or improving internal infrastructure via technology, processes, workflows and integration.
That sets the stage for data providers to make financial advisors’ lives easier. Fundinsight is adding about 25-30 new users per week, each of whom should be able to research ETFs and mutual funds more efficiently than before.
Said Jones: “Instead of financial advisors having to spend hours trying to compare funds across different platforms, if they’re able to come to Fundinsight and do that research in a matter of seconds, then we know we did our job.”
For more on Fundinsight, click here.
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