Canada’s investment industry should disrupt itself from the inside out in order and foster collaboration from within to reduce the complexity that advisors and investors face and to create a personalized client experience, according to Carol Lynde, president and chief operating officer with Toronto-based Bridgehouse Asset Managers (a trade name of Brandes Investment Partners & Co.).
Lynde, who spoke at the 2016 Canadian Funds Summit in Toronto on Wednesday, put out a call to action to the industry in terms of how it should move forward and referred to popular technological “disruptors” that could provide lessons to the investment industry.
“Will we ‘Uberize’ the industry or will we let someone else do it for us?” she asked. “I, for one, would like us to disrupt the industry. We know what to do and we know what needs to be fixed.”
The industry could learn from San Francisco-based Uber Technologies Inc., which has simplified the task of ordering and paying for transportation from a mobile app, suggested Lynde.
Specifically, the industry must reduce the complexity that’s currently plaguing investors and making it harder for advisors to do their jobs, according to Lynde, who referred to the “alphabet soup” of classes within fund lineups.
“We have advisors putting clients into the wrong series. Of course, they’re putting them into the wrong series. How can you keep track of all of that?” she asked the audience of fund manufacturers.
Thus, the industry must work to simplify product shelves and the disclosure that accompanies products and marketing materials. One important step has been made with the development of Fund Facts, which are simpler than traditional prospectus documents, notes Lynde.
She also referred to the success of San Francisco-based Fitbit Inc., which has made it easier for consumers to quantify their level of physical activity and certain aspects of their health.
Fitbit has shown that people like being engaged and knowledgeable about their lifestyles and how they can improve themselves, said Lynde.
The financial services sector also must work toward creating that personalized experience so investors understand details related to their portfolios and how their investments relate to their goals, and help investors modify their behaviour in order to reach those goals, according to Lynde.
The development of such an experience would not displace the role of the advisor as engaged people are looking for an experience that is unique to them and comes with an advisor that can coach, recommend and interpret a client’s financial situation, she assured the audience.
Lynde also called for greater collaboration within the industry in order to help the business evolve. The industry is at its “FundSERV” moment, she said, referring to the mutual funds industry banding together 25 years ago to create Toronto-based FundSERV Inc.
“What if we worked collectively on finding technology solutions for investors to have that digital experience? For each of us to do that within our firms would be very expensive, but for the industry, if we all agree it’s a good thing, we could leverage a platform like FundSERV to do something like that,” she explained.
A collaborative effort would help individual firms save on costs and increase efficiencies while still allowing them to compete against each other, she added.
Such an effort would have to include the regulators, she said: “We can guard against outsiders disrupting our industry. But we can’t do this on our own and we need the understanding of the regulators. …The regulators really do need to participate in promoting this industry and create that positive experience for investors.”
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