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The Alternative Evolution—Fueled by Technology


It seems like it’s been a long time coming: the wealth management and alternative investing industries appear to be converging in a meaningful way. Through our technology and our team’s direct interactions with financial advisors and asset managers alike, CAIS has spent more than a decade endeavoring to improve how these two industries engage with each other. As Chief Product and Technology Officer, I have a unique vantage point to witness and hopefully help shape this potentially game-changing confluence firsthand.

About two-and-a-half years ago, I took the reins of a relatively small technology and product team—consisting of just 11 employees—at CAIS. The team was merely firefighting back then. They had managed and developed our systems as well as a small team could, still providing some independent financial advisors with access to alternatives but relying heavily on manual processes that couldn’t easily scale to serve the broader wealth management community. I came here with a deep understanding of how to serve investors at scale and recognized the challenge ahead of me. 

Before joining CAIS, I had led technology teams on the buy side and sell side at UBS and AQR Capital Management, focusing heavily on improving user experiences. My time at these firms taught me that to do what we envisioned at CAIS, we had to start by thinking about our users, especially financial advisors. That’s where I began at CAIS, and that’s where my growing team continues to focus, just a few years but already more than 120 additional employees later. 

A focus on client experience 

As we embarked on reimagining the CAIS user experience over the last two years, we began by exploring our customer journeys and building our understanding of the needs and pain points of advisors and enterprises. We did a lot of journey mapping, really getting to the root of our customers’ challenges. To build technology solutions that could eventually meet these demands, we would have to ramp up both our talent and our technology capacity exponentially. 

We now have nearly a hundred engineers worldwide focused on building technology-related products that help solve the problems we identified. We’re revolutionizing the CAIS experience, not only by enhancing our technology but also by integrating it with other major industry players, like custodians and reporting providers, who support our advisor clients. Our cloud-based platform allows us to scale to the needs of our clients and quickly deploy features continuously to meet our clients’ needs. 

Addressing the paradox of choice 

As the world of alternative investing has evolved, advisors now have so many options available to them—they sometimes face a paradox of choice. We’re doing a lot on our technology side to build tools that help the advisor quickly narrow down a particular set of products that may match their objectives. We’re aiming to make the complex as simple as possible for them. 

We are also getting closer to more personalized advisor experiences. I’ve done a lot of research in wealth management, and if I’ve learned one thing, it’s that each financial advisor is unique. Every advisor—and every advisor's client—has their own needs. Through technology, we strive to provide advisors with access to a breadth of alternative products with the potential to meet this wide range of objectives, while seeking to streamline the way that they research and make decisions. 

Pursuing the one-click purchase 

We’ve been working aggressively to offer advisors a simplified purchase experience. We’re trying to get closer to a one-click purchase, and we’ve already made some important strides. Previously, transacting in an alternative investment could take upwards of a couple of weeks; now, on our platform, that same process can happen in a mere fraction of that time. 

As an organization, we also recognize that clicking “buy” is just one part of the alternative investing process, and we’ve committed ourselves to addressing the entirety of an advisor’s pre-trade, trade, and post-trade experience with alternative investments—all within the CAIS Platform.   

We’ve already made significant inroads in providing advisors with educational resources, like due diligence and research materials from Mercer, and the more easily searchable fund menus mentioned before. We’re currently reworking our fund pages so that advisors can more easily locate the information they need. 

Likewise, we’re working on a post-trade experience where the complexity of purchasing an alternative investment (think: communicating about capital calls or distributions) is far less burdensome for advisors. By helping to manage the harder, more tedious parts of the alternatives purchase and by integrating with other platforms, we can reduce friction and speed up the process, freeing up advisors to focus on their portfolios and their clients. 

Education as a catalyst 

Another area where I think we’ve progressed significantly over the years is how we’re serving bigger enterprise firms, like broker-dealers or RIA aggregators. These home offices want fine-grain control of advisors’ access to certain products. Enterprises have many unique policies and controls and are concerned with their ability to manage and supervise trade workflows. We’ve done a lot of work to create rule-based systems, unique to each enterprise and per their instruction, so that the enterprise can maintain oversight of the hundreds and sometimes thousands of advisors in their networks. 

Many enterprises have told us that integrating the CAIS IQ learning experience into our platform has been especially useful. With the “Learn to Invest” feature, advisors can complete CAIS IQ courses assigned by the enterprise. After successful completion, as determined by the enterprise home office, CAIS IQ automatically informs the trading platform that the advisor is permitted to transact. So, from an advisor’s point of view, it's an efficient process: they learn, pass the courses, and are then granted access to transact based on the rules set up by their home office. 

Our platform helps these home offices educate advisors and encourage their compliance—and the speed at which advisors can meet their home office requirements and begin transacting is exceptional. 

Supporting our ecosystem through technology 

The final piece of all this is how we’re designing and leveraging technology internally to improve how we interact with advisors and the rest of the industry. We’re building out more predictive analytics using machine learning and data capabilities to help us provide enhanced experiences for all our stakeholders—from advisors to our own employees. 

We hope these efforts will help CAIS continue to evolve and improve how we serve the independent wealth community.