3 Secrets to a Better Advisor Trading Experience

3 Secrets to a Better Advisor Trading Experience

By Mark Bevington
This post was updated on June 2, 2023. It was originally published on 02.03.2020.

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.

But for many broker-dealers, IBDs, roll-ups and outsourced trading firms in Wealth Management, the client is the advisor and what matters most is actually the advisor experience (A/X).

A/X is a measure of advisors’ overall sentiment through every interaction 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!

Let’s explore the current landscape of A/X, as well as our top three secrets to a better advisor trading experience.

The Advisor Trading Experience

Most fee-based advisors believe that their value is best expressed via Rep-as-PM (RPM) programs, in which 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. In fact, ThinkAdvisor recently reported that 32% of RIAs outsourced at least a portion of the trading process, which is a 5% jump from 2020. The amount of independent broker-dealers that report outsourcing continues to hover at about 50%.

But 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.

Outsourced Trading Services

Since outsourced trading 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: the recent development of Order Management System (OMS) application programming interfaces (APIs).

Wealth management firms now have the option of branding their own trading platform in just a matter of months to regain control over their trading A/X. And there is more to order management than just adding a company’s logo to a screen – OMS as a Service allows for more control over the trading experience overall.

Related: Supercharge Your Rebalancer with an API-based OMS

3 Secrets to Improving Your Firm’s Advisor Trading Experience

There are several tips firms can use to improve their trading A/X, thus attracting and attaining high-talent advisors. The following are some of the best-kept secrets to improving the advisor trading experience, from creating an advisor journey map to auditing advisor experiences and more – let’s dive in.

1. Create an Advisor Journey Map

Much like client journey mapping, an advisor journey map is an outline of the steps advisors go through when interacting with their trading system. It could include:

  • Pre- and post-trade aspects of the advisor experience
  • Various touch points
  • How those touch points affect advisor workflows

The most efficient firms are able to improve their value added by customizing their trading A/X. Given the significant amount of time many advisors spend entering trades and executing investment strategies, taking a proactive approach to mapping the steps in the process is crucial to A/X optimization.

The next step after mapping out processes is to leverage great technology. With trading systems that implement an open API infrastructure, trading AX can be taken to a new level of efficiency as orders are executed at a fraction of the time spent with manual workflows.

2. Complete an Advisor Experience Audit

An advisor audit is an examination of advisor trading from different angles to ensure that all stakeholder input is considered. This includes algorithmic trading, thinly traded securities or heavy use of mutual fund orders.

The trading landscape these days is multifaceted – financialization of a wide variety of assets has expanded the universe of traded securities even as the number of stocks traded on the major exchanges has declined due in part to mergers and privatizations. Performing an audit helps ensure that the procedures put in place to accommodate diverse product and process requirements don’t detract from the advisor experience.

3. Invest in Dedicated Focus from Senior Management

The trading A/X is not going to change overnight, so it’s important for management to demonstrate their clear focus and support for the initiative. Too many projects fail due to internal resistance that can only be overcome when senior management runs interference.

Some other helpful actions would be requiring regular updates from project leaders and encouraging cross-functional cooperation from the rest of the organization. When in doubt, ask your advisors directly what they think is preventing forward movement – they likely have an idea of what roadblocks they’re facing, and may have ideas for how you can help overcome them.

With these three steps in place, you can create a better advisor experience in 2023 and beyond.

Ready to upgrade your advisor trading experience? Explore our use cases, learn more about our trading solutions, or connect with a member of our team today.