The study examined the impact that outsourced technology integration can have on the business of independent registered investment advisers (RIAs). Commissioned by NFP Advisor Services Group and conducted by Aite Group, the study concluded that outsourced technology integration tools provide significant benefits to RIAs, including improved productivity and efficiency, that can boost adviser revenues by up to 30%.
RIAs’ current level of technology integration across applications averages below 50%, according to NFP. Without a fully integrated platform, advisers are losing an average of two days per week for operational tasks such as data reconciliation, performance reporting, and fee billing, the study claims.Supporting staff lose more time without integration, spending three times as many hours on operations as on client acquisition and prospecting.
NFP contends that in a fully integrated environment, the time spent on operations can be reduced by almost one full day per week for advisers and by 40% for support staff. Because larger firms employ more support staff, inefficient operations pose an even greater burden on RIAs once they reach a certain size. Firms with assets under management between $100 million and $500 million could regain an average of 114 days of time previously allocated to operational activities from supporting advisers when they move to a fully-integrated technology environment.
Complete study results are provided in a white paper, titled, “RIA Technology Integration: The True Opportunity Cost of Inefficiency,” available here.
NFP Advisor Services Group is a business segment of National Financial Partners Corp. (NYSE: NFP), a provider of benefits, insurance, and wealth management services.Aite Group polled 146 RIAs in March 2011, approximately two-thirds of whom employ a hybrid model. At least 15% of participants were included in each of the following levels of assets under management: less than $30 million, $30 million-$99 million, $100 million-$499 million, $500 million-$999 million, and more than $1 billion.