A Year of Disruption Spotlights Tech, Cybersecurity

Advisers are increasingly focused on social media marketing, technology that can deliver investment personalization, and cybersecurity.  

According to Vestwell’s newly published “Retirement Industry Trends Report,” 85% of advisers agree that, as a result of this past year, they have placed a greater emphasis on the technology they use to run their businesses.

Among survey respondents, 45% say social media is now more valuable as a client acquisition tool, and 47% say it has remained equally as valuable, meaning just 8% of advisers feel the past year made social media outreach less important.

Just 6% of advisers say the strategy of engaging in cold calls has increased in importance over the past year, with 41% saying the strategy is now less important. Even more notable, fully three-quarters (76%) of advisers say their referral strategy has grown in importance for their practice’s success over the past year, with just 1% indicating the opposite.

“It’s safe to say that if you aren’t on LinkedIn looking for leads, there’s a good chance your competitor is,” the survey report contends. “In fact, when we asked advisers about their most valuable source of leads, the second most common answer was social media. Referrals was first, beating out events, websites and cold calls.”

From cryptocurrency to environmental, social and governance (ESG) investing, the survey asked advisers what they believe clients are most interested in incorporating into their plans. The top response for both employers and employees was “personalized advice in the form of tools like managed accounts.” This response beat out guaranteed income solutions, 401(k) matching on student loan repayments, ESG funds and access to cryptocurrencies—and all by sizable margins, though each had substantial interest. While managed account usage remains low across the entirety of the retirement planning marketplace, 68% of advisers who offer managed accounts say they have seen an uptick in adoption over the past year.

Alongside the interest in new technology, the Vestwell survey shows growing concerns about cybersecurity. As the survey report notes, given that 401(k) plans are an attractive target for hackers, it came as no surprise when the Department of Labor (DOL) earlier this year released cybersecurity guidelines for plan fiduciaries.

They survey results suggest employers are feeling the increased pressure of these guidelines, with 73% of advisers agreeing that their clients care more about cybersecurity following a year of uncertainty. Part of their concern might be the fact that, in addition to releasing guidelines, the DOL has also begun auditing plans to test whether they are following proper security protocols.

“This added scrutiny means advisers are also feeling the pressure to carefully vet and select secure technology providers,” the survey report says. “According to our survey results, 30% of advisers listed cybersecurity as a top concern for the future of their practice, impressively beating out prospecting and client retention.”