Technology adoption to enhance the client experience

By adopting the latest technologies, advisers have the opportunity to provide an outstanding client experience, as well as improve client conversations and interactions. This new client experience, in turn, can potentially lead to increased referrals and business growth, both from client loyalty and more value-added adviser time focused on business development.
Moreover, through efficiencies that come from technology integrations and automated processes, advisers can achieve scale and accommodate new client growth without having to hire new people.
The challenge for advisers is real. However, as outlined in the following section, the industry is beginning to see substantial positive results from top advisory firms who are leading the industry into a new era.
Profiles of Technology Users
How are some firms achieving dramatically different results from others in asset and revenue growth? The InvestmentNews Research team set out to answer that question, and the findings are illuminating. The research highlights key differences in how technology-focused advisers (TFAs) approach and make technology investment, rollout, and integration decisions that lead to significantly superior business results.
In the 2013 InvestmentNews Adviser Technology Study, TFAs are participating firms that use the most major software applications, such as CRM, portfolio management, performance reporting, financial planning, document management, portfolio rebalancing, account aggregation, client portals, and others. Nearly all TFAs are placing their core systems in the cloud and integrating them. Such firms are also twice as likely to offer mobile access and are increasing their tech spending compared to other firms in the study.
Download the full white paper “Elevating the client experience: Leveraging Technology to Drive Profitability, Scale and Growth”, and learn more about how innovative advisers are out-performing their peers, here.
Because they base technology decisions on specific strategies rather than solely on cost, the TFAs identified in the survey are enjoying strong financial performance. They are seeing higher revenue per staff (+19%) and per professional (+18%). They have considerably more assets per staff (+13%) and per professional (+25%) than average firms. Most importantly, they are seeing dramatic incremental profitability as profit per staff (+27%) and per professional (+45%) dwarfs the average profits for study participants.
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Driving that financial performance is much higher productivity serving clients, as TFAs can manage 41 households per staff versus 30 households for others, a 37% difference. When measured per professional, the difference is even greater, with TFAs managing 113 relationships versus 69 for the study participants, a massive 64% improvement. Putting this in perspective, this means that technology use is adding 25 extra adviser hours for every 40-hour work week, or three full extra days per week. Advisers who haven’t invested in technology to support their interactions with clients on average can’t manage the same number of clients effectively.
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What are TFA’s doing differently to achieve these dramatic results? There are many areas where TFAs stand out, including:
–Automation-TFAs are committed to automating every part of their business. Every TFA is actively using a CRM, and 97% are using a financial planning system. This compares with 91% of others using CRM and 76% using financial planning. Account aggregation is another key differentiator. Some 89% of TFAs are using account aggregation to automatically bring in data on client outside holdings and include in their wealth management analysis and reporting, compared to 54% of others. And 83% of TFAs have deployed automated document management systems compared to 51% of others.
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Firms also distinguish themselves in their use of portfolio management systems, with 86% of TFAs using one while the rest are implementing portfolio management at a 65% rate. TFAs also have more than double the usage of automation for the time-consuming, error-prone portfolio rebalancing process, at 80% compared to only 39% for others. Finally, 54% of TFAs are using systems to automate compliance processes, while other study participants have a relatively low adoption rate of 22%.
–Cloud – Another key area where TFAs are separating themselves is in their early adoption of cloud computing. Some 86% of TFAs are taking advantage of the many benefits of cloud-based systems, while the the other study participants are still only at 52%. On average, TFAs have five cloud-based software solutions compared to two for other firms. Key applications include financial planning (83% vs. 39%), portfolio management (80% vs. 39%), CRM (74% vs. 53%), account aggregation (69% vs. 34%) and portfolio rebalancing (69% vs. 22%).
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This article is an excerpt from a new white paper, “Elevating the client experience: Leveraging Technology to Drive Profitability, Scale and Growth”, produced by InvestmentNews Research and Advent. To download the full white paper and learn more about how TFAs are out-performing their peers, click here .