RBC Capital Markets: Embracing "The Big I"
September 21, 2009
Two years ago, RBC Correspondent Services and RBC Advisor Services, wealth management units of Minneapolis-based RBC Capital Markets, faced a strategic dilemma.
The divisions support advice-giving financial consultants, brokers and registered investment advisers (RIAs). Technology is critical to these advisers, whose success depends on charting and executing a course of action for their clients, explaining it simply and effectively, and tracking its progress.
"At the end of the day, [the advisers] need to understand the client," says Craig Gordon, director of RBC Correspondent Services and RBC Advisor Services. "Our strategic view of how technology can support that [is that] we think about technology as making investment advisers work more effectively."
Key to that effectiveness is managing records on client accounts as well as contact information, tracking current assets and investments, planning the allocation of available funds to different types of assets, analyzing client holdings and executing on a total plan for that client. This includes placing trades, the buying and selling of securities and tracking completion of transactions.
"Historically, all of those components were accomplished with different pieces of software," Gordon explains, "with different bells and whistles."
Therein lay the dilemma, he said: "Do we continue to commit to lots of different vendors in all of these siloed technologies? We needed to get this information back to advisers to populate their systems. To reconcile and connect these systems was a monumental technology task."
Strategic Retreat
To address the issue, RBC held a strategic retreat in the summer of 2007 in Minnesota, inviting senior executives representing a variety of RBC's business units. The purpose: To discuss how its use of technology could be improved. Participants listed the features they needed in a system, enumerated the benefits for a number of categories, and asked, "Which among these is most important?"
The key, participants agreed, was to make it "simple and short and sweet for clients."
Unfortunately, there wasn't a one-size-fits-all solution in each category. As a result, the group decided to look for a system with tight integration of features and ease of use. "Would that trump the nuances of any individual feature?" they asked.
While the group failed to reach any consensus, they did agree on one thing: integration -interlinking previously disparate computer systems, applications and services - trumped all. "We called it The Big I," says Gordon. "The Big I was unanimous."
Says Gordon, "The lesson we learned from years of other system integrations is: When financial services firms - especially large firms - find a technology partner and try to customize it, at the end of the day it becomes less efficient and almost unusable in some cases."
What the advisers needed was an integrated system, Gordon says. This led RBC to a search for best-of-breed solutions. RBC found that SunGard Data Systems had done a good job of acquiring various pieces of software and integrating them into a single platform. One example is bringing together SunGard's Planning Station and Allocation Manager. "It was that integration that made the most sense," he says.
