Wall Street is pouring billions into tech to keep its wealth management forces competitive. Here are 6 execs leading the charge.

  • Wall Street wealth management firms have billion-dollar budgets for their technology.
  • Large tech budgets help firms compete with fintech for talent and consumers.
  • Insider spoke with six executives about the innovation at their firms like digital assistants.

Wall Street’s wealth management firms are pumping billions of dollars into their technology budgets. 

JP Morgan dedicated $1 billion of its $12 billion annual technology budget to its asset and wealth management division. UBS spent $3.9 billion last year on its technology and is shelling out $1.4 billion to acquire robo-advisor Wealthfront.

Even custodians that support breakaway financial advisors like RIAs have backed robust tech projects. Charles Schwab bet its $26 billion acquisition of TD Ameritrade would bring the technological innovation it needs to stay on top. BNY Mellon Pershing spent $1.4 billion last year on its tech.

The high budgets are for steep competition for clients in what McKinsey estimates is a $40 trillion industry. Clients are demanding more digital capabilities, as are wealth managers themselves.

Banks that depend on the steady cash flow that their wealth management units provide are also competing against well-funded, venture capital-backed startup fintechs. Insider talked to six major players about how they are upgrading their tech to gain an edge against the competition. 

JP Morgan Private Bank is rolling out new ‘on-call’ digital assistants

Karen Donnelly has been with JP Morgan for 16 years and is a former financial advisor.

JP Morgan Chase

Karen Donnelly leads JPMorgan’s digital tech team for its private bank business, a unit that caters to high-net-worth and ultra-high-net-worth clients, including family offices.

The bank’s US digital team made its customer relationship management software more accessible through a mobile app, a feature that unchains advisors from their desk, in 2019. And it’s working to add an on-demand call assistant that will monitor calls with clients and suggest documents and information in real-time based on what’s mentioned.   

Donnelly, who has been with the firm for 16 years and is a former private banker, said David Frame, the private bank’s CEO asked her to take on the role to accelerate the technology improvements the wealth management unit needed at the end of 2020. 

“I have such a good starting point in terms of the things that are gonna make a difference versus the things that are not,” she told Insider.

She’s hired other wealth managers, making up a quarter of the 40-person digital team she oversees, to keep a pulse on what advisors need and want in their technology stacks. The rest of the team are design and product managers from other financial services companies such as McKinsey, UBS, and Goldman Sachs.

Donnelly has built out a task force focused on innovation and fintech partnerships. The group researches what areas the firm can develop next and whether they can build it inhouse or offer the solution through a fintech company. Though JP Morgan Chase has made multiple investments in fintech companies, its private bank unit has yet to partner with its first fintech.

“We have great partnerships and capabilities on our technology platform side. So a lot ends up being solved internally. But, certainly, we’ll look at partnerships external if we think it can accelerate certain things we’re trying to solve for,” said Donnelly.

JP Morgan Chase oversees $3.7 trillion client assets through its asset and wealth management businesses. Out of the $12 billion-tech budget, the company pumps more than $1 billion annually into upgrading the services and products that support those businesses, according to a presentation from its investor day.

Pershing is building a one-stop tech shop for RIAs

Ainslie Simmonds joined Pershing in October last year.

BNY Mellon Pershing

BNY Mellon has an ambitious goal to build a software platform that hosts various applications for financial advisors. Pershing X is intended to be a solution to the fragmented market of technology tools that have registered investment advisors re-entering information over and over again. 

The bank, with its over $2 trillion in client assets and $47 trillion under custody, announced its new business in April of last year and in October hired Ainslie Simmonds, PIMCO’s former global head of digital and someone who is familiar with financial advisor tech. She had previous stints as head of product for Thinkorswim Group, an online brokerage firm acquired by TD Ameritrade, and COO of LearnVest, a digital financial planning company that sold to Northwestern Mutual in 2015.

Simmonds said she joined Pershing to help solve the advisor problem of disconnected tech tools: “I keep coming back to that statistic that most advisors get in this business to help people—that’s their motivation—and they can only spend 25% of their life doing that. The rest of the time they’re pushing buttons,” said Simmonds.

But another reason is the large and multi-year capital backing Pershing X from the giant custodial bank.

“As, kind of a startup founder, that gives you the ability to make really good long-term decisions,” said Simmonds, “because you know the funding’s there. And you can take the appropriate steps, not just to build this, but to build it for scale, which is really exciting.”

There are about 400 people working on Pershing X. Two hundred and fifty came from within Pershing. The bank’s Albridge Solutions, a data aggregator, and an internal turnkey asset management platform (or TAMP) were folded into Pershing X, helping to fill some of the roles. Pershing hired 150 product managers, designers, cloud architects and data architects from outside the firm to fill the remaining positions, Simmonds told Insider. 

Merrill Lynch is using tech to speed up bringing on new clients

Casey Franz, head of platform and capabilities, said Merrill’s strategy is to put financial advisors where clients want to engage them like email, text message, and social media.

Bank of America Merrill Lynch

Bank of America Merrill Lynch has dedicated $11 billion annually to its technology budget, Casey Franz, head of platforms and capabilities told Insider. Franz and Kristen Hill, chief operating officer, have been focusing wealth management’s tech funding on client acquisition, advisor productivity, and client engagement. 

“What’s really fun is the ability that scale actually gives you to innovate and to do things that nobody else is doing,” Hill, a 20-year Merrill veteran, told Insider in an interview.

Franz, who has been with the firm since 2011, added, “You don’t get an opportunity to engage at that level often in a career.”

Merrill’s overall strategy is to put financial advisors in spaces that clients want them to be, whether it be through text message, email, or social media, said Franz. So the company did just that. In August, the $1.1 trillion in assets under management firm released the next phase of its digital client onboarding experience, real-time collaboration. The innovation intends to cut out the vacillating emails and phone calls that occur between advisors and clients by allowing them to virtually meet and go through required onboarding documents together. 

In 2021, it launched the ability for advisors to access their workstations via their smartphones, allowing advisors to work practically anywhere.

While most of Merrill’s tech budget goes toward internal projects, the firm partners with outside technology companies when there’s a real advantage to gain in the market, said a spokesperson. Hill said the firm has worked with large tech companies like Salesforce, LinkedIn, and Zoom to assist with client acquisition and customer relationship management (CRM) software. 

Hill and Franz declined to share what fintech partnerships the company has, but Hill said the company works with “smaller players” to perform things like screen sharing sensitive information.

“We’re going to want to work with partners that we think have the ability to operate robustly and securely and at the scale that we do,” she told Insider.

How Schwab is leveraging TD Ameritrade’s tech stack

Andrew Salesky, chief digital officer.

Charles Schwab, Inc.

Charles Schwab, a popular custodian housing $3.2 trillion in assets for financial advisors and their clients, acquired its top competitor TD Ameritrade two years ago in late 2020. The merging of two large firms is not set to conclude until the summer of 2023. However, Schwab execs tout that the integration has tripled its technology investments and helped the 51-year-old company introduce new capabilities like digital client onboarding.

Two of the people heading up the integration are Andrew Salesky, chief digital officer, and Alison Dooher, head of digital advisor solutions.

“The integration in and of itself has provided a really outstanding opportunity for us to both focus on how we’re gonna best serve bringing these two client bases together, but also accelerate our investment in areas that we’ve long been wanting to do,” said Dooher, who has worked for the company for 23 years.

Alison Dooher, head of digital advisor solutions, has been with Schwab for over 23 years.

Charles Schwab, Inc.

The pair is focused on three areas of innovation to serve the RIAs custodying assets with Schwab: simplifying advisor workflows, trading and wealth management, and partnering with fintech companies that provide support services to advisors. 

As Schwab combines two companies into one Goliath, the custodian has chosen to keep certain programs from TD Ameritrade’s technology stack. Dooher told Insider the company is working on integrating TD Ameritrade Institutional’s trading platform called Thinkpipes Advisor Platform and the portfolio rebalancing tool, iRebal. 

When it comes to partnering with other fintechs, Schwab is upping its API capabilities to create a single-sign on for advisors and their clients to reach Schwab from other fintech applications. So far, the company has achieved over 180 product integrations for other companies, the chief digital officer told Insider.

“Our objective is to have Schwab be where our clients want to go. So whatever provider they wanna work with, whether that’s a CRM provider, a portfolio management provider, a financial planning provider, we want Schwab data and capabilities to be there,” said Salesky, who’s been with Schwab for 27 years.

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