Why You Can’t Ignore New Adviser Technologies

Celent shares helpful tips for how to choose and smoothly implement new advisory practice technologies—and why embracing new tech is not really an option.

A helpful new report from Celent, “Transforming Your Business through Advisor Technologies,” offers a range of ideas for banks, brokerages, registered investment advisers (RIAs) and asset custodians considering new technologies and approaches to doing digitally enabled business.

The report is authored by Isabella Fonseca, research director of Celent’s wealth management practice. She says investment services firms of all stripes are widely investigating and investing in different digital business strategies to improve front office technology and adviser education, among other goals.

The main themes of current innovation are clearly simplicity, ease of navigation, and integration with many solutions made available via a single portal, according to the report. These are “the most important features that define a good user experience,” Fonseca says.

Many firms, whether retail banks or defined contribution (DC) plan consulting specialists, are looking for ways to allow staff to spend less time managing and meeting with existing clients in order to focus on business development and wider client solutions development, the Celent report explains. Looking to the DC world in particular, as investor interest in robo-advising soars, advisers must consider the role customer relationship management (CRM) technologies can play in streamlining repeatable functions, such as portfolio rebalancing or retirement income projections. Otherwise they’ll risk being left behind by competitors able to achieve greater scale and deeper services with less required manpower.

One need only consider the strong pace of tech-driven merger and acquisition activity in the broker/dealer space to see this effect playing out in real time. Fonseca observes the most common technology tools being explored and adopted by advisers are CRM systems, “followed by proposal and modeling tools, [automated] wealth management platforms, and mobile access.”

NEXT: Tech tools will boost relevance 

According to Celent, firms widely hope technology tools will be able to make their staff and services “more relevant to the next generation of investors.” In the interest of gaining tech-savvy clients, firms are embracing the robo-adviser model as a complement to their existing service model and a way to offer differentiated levels of service and access (see “Divisions Emerge in Meaning and Use of ‘Robo’”).

Fonseca says each firm's unique business model, as well as the unique needs of their investors, will contribute to the pace of adoption of specific technologies. Overall, she suggests business leadership should see technology as a means to refine and streamline service models, improve relationships with clients of all ages, and increase two-way collaboration with clients.

Highlighting another main theme, Fonseca suggests firms are “reducing the number of disparate systems that do not talk to each other, and creating a single infrastructure.” This type of platform consolidation can improve data integration and operational efficiency “across the front office and between front and back office, and enables firms to offer a number of wealth management models and services at once … from full service to self-service,” she adds.

“It also improves compliance-related processes including reporting and transparency to the end client,” Fonseca concludes.

Information on obtaining Celent research is here