Technologically Savvy Advisers Reap More Assets

Fidelity suggests six steps for advisers to embrace technology.

Technologically savvy advisers, which Fidelity Clearing & Custody is dubbing “eAdvisers,” reap several advantages, according to newly released findings from the Fidelity 2014 Advisor Insights Study. They have nearly 40% more assets under management (AUM), attract more Gen X and Gen Y investors and are more adept at expanding their geographic reach.

In addition, 74% of eAdvisers say technology has helped them grow their book of business, most likely because investors increasingly are turning to digital outlets to manage their finances. This, combined with an estimated shortfall of 10,000 advisers by 2020, should prompt advisers to turn to technology to meet investors’ expectations and run their practices more efficiently, Fidelity says. In fact, eAdvisers can support 55% more clients than their peers, according to Fidelity.

“It’s no secret that technology can help firms automate processes and reduce errors,” says Tricia Haskins, vice president, practice management and consulting, Fidelity Clearing & Custody. “What our new research shows is that technology also helps advisers increase assets, attract new clients and grow their geographic footprints. The  downside is that only three in 10 advisers in our study were identified as eAdvisers, which means there are many ‘tech indifferent’ advisers today who may not be taking advantage of technology to strategically grow their business.”

NEXT: Six steps to become technologically savvy

Fidelity suggests six steps for ‘tech indifferent’ advisers to take to come up to speed on technology. First, to use technology to communicate with clients and prospects, particularly social media, email alerts and text messages. The reason for this, Fidelity says, is this is how investors are communicating; 64% of eAdvisers use social media to communicate with clients versus 12% of typical advisers.

Second, advisers should be open to creating a virtual work environment by using tablets, mobile devices and video or online conferencing. Investors increasingly want to be contacted at their convenience and hear from advisers in a timely fashion when there are major developments in the market. Fidelity’s study found that 75% of eAdvisers use tablets to view portfolios, compared with 23% of other advisers.

Third, advisers should embrace software and platforms to make their practice more efficient, namely portfolio and administratibve tools, a customer relationship management (CRM) platform, risk and compliance tools, eSignature and rebalancing software. This will streamline daily activities, speed up turnaround times and reduce errors, Fidelity says. Eighty percent of eAdvisers automate workflows and administrative tasks versus 24% of typical advisers.

NEXT: Additional steps

Fourth, Fidelity suggests advisers equip clients “with a dynamic view of their financial situation,” namely data aggregation and visualization capabilities, as these are visually compelling and comprehensive. Eighty-one percent of eAdvisers provide a holistic view of client assets, compared to 47% of typical advisers.

Fifth, advisers should keep their team up-to-date on investor interactions through CRM software and cloud-based storage, which is easily accessed. Eighty percent of eAdvisers are using CRM software to track client interactions, compared to 49% of other advisers.

Sixth, advisers should replace paper with online access to information through eDelivery of statements and reports and online access to statements and reports. Ninety-five percent of eAdvisers delivery statements and reports electronically, compared to 72% of typical advisers.