Connor Coughlin: Traditional Advisory Meets FinTech - The Rise Of A New Model

Connor Coughlin, Apex Fintech Solutions Chief Commercial Officer will be speaking at the upcoming Benzinga Fintech Deal Day & Awards. Mark Nov. 13 on your calendar for the must-attend gathering in the fintech industry!

The retail investor has never been more empowered. Access to fractional investing, the ability to ‘tap’ into robo-advisors, and the continued evolution of fintech – all of this is working to break down the barriers to investing. So what does this mean for the fintechs who service these investors and the advisors working to retain and acquire more clients? 

Technology equates to opportunity. Each advancement – from robots to generative AI – provides investors with more options and advisors with the ability to scale. Robo-advisors are increasingly sophisticated and integrated into the entire investment ecosystem. While a crucial tool, robo-advisors can’t replace the human element of evaluating the larger financial health and well-being of a client’s financial life and planning.

Investment management and financial planning are entirely different disciplines. Therefore, the debate around the place of robo in financial management is misplaced. Even when you’re using a human advisor, your portfolio is most often created by a centralized unit, whether that is an outsourced CIO, a robo or something else. Advisors can’t be stock pickers to hundreds of clients—instead, they focus on the financial health and long-term planning for their clients in totality. At Apex, we believe the future of advisory will take the form of a hybrid model, which combines a human and digital experience.

The fractionalization of nearly every asset class is also widening access and creating new investment opportunities for retail investors to jump into areas like fixed income, structured notes, alternatives, and more. In the future, we think the average investor may be able to access instruments that today are only available to the ultra-high-net-worth, thanks to the ongoing lowering of access barriers. 

Just last month (October 2023), our team at Apex announced fractional fixed-income trading.  Finally, investors will be able to buy bonds fractionally, similar to how you buy a few dollars worth of stock. Previously, the fixed-income markets were dominated by large market participants—meaning large trade sizes, higher minimum investments, pricing opacity, and dealer-to-dealer relationships. Now, retail investors can more easily add fixed income into their portfolios through fractional bonds.

Lastly, the advent of generative AI will supercharge the personalization of financial services. While many might focus on job displacement, the reality is that AI will transform how financial planning and investment management converge to create a more robust experience for every investor. AI marks a huge step forward in the ability for advisors to scale their business and transform their business model. Generative AI can increase the speed at which they connect with clients with the same level of customization. Instead of sending a batch email to clients on rates, advisors can send customized emails addressing how rate changes will impact their specific financial plan and tolerance for risk. 

Why is it important to lower the barriers to investing through technology? At Apex, we believe it’s critical to building wealth. Just last month, the Fed released its Survey of Consumer Finances, highlighting how the wealthy continue to see their wealth rise much faster. The top ten percent of wage earners saw their salaries increase 22% from 2019 to 2022, while middle-income wage earners only saw a 5% increase. 

The good news is we are seeing more people investing. According to the same Survey of Consumer Finances, 99% of families owned at least one financial asset, ranging from transaction accounts, certificates of deposit, savings bonds, other bonds, stocks, pooled investment funds, retirement accounts, cash value life insurance, and other managed assets in 2022.  Direct ownership of stocks from 2019 to 2022 also increased 6%, the largest change on record.

You can learn more about the changing dynamics of the traditional advisory space with robo-advisors during my fireside chat at Benzinga’s Fintech Deal Day & Awards. I’ll discuss what’s ahead in 2024 and how self-directed brokers are also adapting. 

Connor Coughlin has been with Apex Fintech Solutions for six years, prior to which he was at AFS’ parent company PEAK6 Investments. At Apex Connor has held a number of roles across analytics, strategy, business development, corporate development and now runs their retail business line focusing on fintech brokerage, both domestic and international, as well as wealth management. Connor received his bachelor’s degree from Columbia University in political science and computer science.

Apex Clearing Corporation, a wholly-owned subsidiary of Apex Fintech Solutions Inc., is an SEC registered broker dealer, a member of FINRA and SIPC, and is licensed in 53 states and territories. Securities products and services referenced herein are provided by Apex Clearing Corporation. FINRA BrokerCheck reports for Apex Clearing Corporation are available at: http://www.finra.org/brokercheck  

Apex Fintech Solutions is a fintech powerhouse enabling seamless access, frictionless investing, and investor education for all. Apex’s omni-suite of scalable solutions fuel innovation and evolution for hundreds of today’s market leaders, challengers, change makers, and visionaries. The Company’s digital ecosystem creates an environment where clients with the biggest ideas are empowered to change the world. Apex works to ensure their partners succeed on the frontlines of the industry via bespoke solutions through its Apex Clearing™, Apex Advisor Solutions™, Apex Silver™, and Apex CODA Markets™ brands.

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