Finovate Awards Profile: RBC Clearing & Custody

with Noel Stave, CTO

Noel Stave,

CTO, RBC Clearing & Custody

Tell us about the work you do as Chief Technology Officer for RBC Clearing & Custody.

In my role as CTO for RBC Clearing & Custody, I am focused on identifying and delivering technology that our broker-dealer and RIA clients can use to grow and differentiate their business. In short, I am responsible for technology strategy and the execution of that strategy.

The work is very broad and also involves a lot of discussions with our broker-dealer and RIA clients on what their needs are going to be in the future, and then working with the best of Fintech and RBC’s own resources to find an innovative way to meet those needs.

You’ve held a number of executive roles in your 20+ year tenure at RBC – analyst, sr. manager, COO – why this role now?

Much of what a clearing and custody firm offers has been commoditized. But I believe that delivering innovative technology and excellent service are two of the primary ways a clearing firm can differentiate itself from the competition. As COO, I was already directing much of the RBC Clearing & Custody technology effort. In the last few years, we invested more in technology and entered a focused transformation, where we needed a dedicated executive role to shepherd that effort. The title of CTO was a natural fit for me given my experience, business knowledge, educational background and proclivity to technology.

What technology has made the most impact on the business of wealth management over the two decades that you’ve been in the industry?

Twenty years is a long time, especially in technology terms. My first job as a summer intern was to build a CRM type application 22 years ago. Since then, we have seen a rise of CRMs and have seen the democratization of wealth planning, a revolution in the processes involved in establishing new relationships, digitization of the entire advice process, and unprecedented customer access and transparency to their financial lives. In addition, we have seen a plethora of tools and solutions that help advisors be more efficient, including some that solve problems that didn’t exist 20 years ago.

But the development that stands out to me as the most impactful is the sheer breath of financial technology offerings now available to independent broker-dealers and RIA firms. There are literally hundreds of technology providers competing for an advisor’s attention, each offering a unique solution to help them attract and retain clients. Twenty years ago, the list of Fintech providers was small and generally populated by a few big players. Today the explosion of cool Fintech offerings is driving competition and innovation like never before. It’s a great time to be a broker-dealer or RIA firm, who is open to optimizing technology. It’s also a great time to be a CTO.

You were recently highlighted as one of 21 people who will change wealth management in 2021. How is wealth management changing right now and what factors are driving that change?

The democratization of wealth management is the biggest change taking place in our industry. Clients will continue to demand more transparency in their dealings with the industry. They expect more tailored advice, more customized experiences and someone they can work with that understands them as an individual, no matter where that person resides in the world.

This broad tide is driven by well understood demographic trends, an unprecedented level of wealth transfer, increased access to personal consumer-level technology, increased adoption of that technology and a different client mindset as digital natives become the core clients.

What factors should a RIA or BD consider when choosing a clearing and custody partner?

Speaking as a technologist, I believe that a BD or RIA firm’s choice of clearing and custody partner will ultimately have the single largest impact on their technology ROI and the client/advisor experience they can deliver. They need a provider that has a robust core offering that covers all the bases, and allows them to drive growth with little additional investment.

But, when it’s time to start differentiating the tech stack to meet unique advisor and client needs, BD and RIA firms also need a clearing and custody partner that is flexible enough to offer integrations that will unlock the full potential of their chosen technology tools, Ultimately, your clearing and custody partner needs to be just that, a partner.

This spring, RBC Clearing & Custody introduced its RBC Nexus platform for RIAs and independent BDs. What problem will this new technology solve? How will it empower your clients?

RBC Nexus was conceived as a transformational way to help our BD and RIA firms access all of their client information and wealth management tools in one single place - from anywhere, on any device.

But in addition to centralizing the experience, we introduced a new client entity master (Informatica), a new performance reporting platform (Addepar), a new trade order entry platform (Nexus Trading), a new digital account opening platform (Docupace), a new market data & insights workstation (Factset), a new API integration toolset (MuleSoft and Apigee) and a deeper

integrations with our client portal. And best of all clearing and custody firms at RBC have access to RBC Nexus and these solutions at no additional cost.

Prior to RBC Nexus, our BD and RIA firms would need to work in multiple applications to get work done. Now, they can go into RBC Nexus and accomplish all that they need to, in one convenient platform.

You’ve talked about RBC thriving in a niche between being big enough to have scale, but small enough to keep from losing what makes “RBC special.” Can you talk about the company’s growth goals and how they can be achieved while remaining uniquely RBC?

Today, we provide clearing and custody services to over 300 BD and RIA firms across the country. Even though we are the third largest clearing firm in the U.S., in terms of the number of firms, we have maintained a culture of service and partnership that sets us apart from our competition. We are headquartered in Minneapolis, Minnesota, with our leadership, service, operations, technology, and support teams based in Minneapolis. We bring a strong service culture that has been developed over decades that is delivered through a Midwestern work ethic and a sincere commitment to help people.

We have been growing rapidly over the past few years as more BD and RIA firms are drawn to us by that combination of great service and technology. For example, all of our firms have direct access to the leadership team. They have dedicated client service managers, based in one place. They can reach a real person on the phone, or use an automated workflow system if that is what they desire. We don’t want to be a “big box” clearing firm or custodian. But we are investing heavily in the business and plan to continue our growth, while still maintaining the small-firm feel and the personal touch that defines us today.

We talked about how the wealth management industry is changing. Given today’s trends, how do you think wealth management will be different three to five years from now?

The big trends are well documented and will continue. These trends have been inexorably heading our way for a while. The much anticipated transfer of wealth is happening now and will continue. Advisors who don’t engage with the next generation will be left behind. Fewer advisors are joining the industry than are ageing-out for retirement. The ‘bionic’ advisor (human advisor empowered by technology) will be more of the norm at all types and sizes of firms. These bionic advisors and their firms will be able to help more clients, provide better advice and a more customized client experience, leading to better client outcomes, despite their being a smaller overall advisor population in the next decade.