InvestmentNews takes advisers through the developments and innovations in technology that’ll change the way you do business today—and tomorrow.

What it takes to really have a digital advisory firm

A guide to understanding the spectrum of digitization at financial firms

Mar 7, 2016 @ 12:36 pm

By David Canter

There are multiple forces of change disrupting the advice industry today. Emerging affluent investors want a more collaborative and digital experience. There's an influx of new fintech firms seemingly trying to change the industry overnight.

These forces may require a new and more efficient technology framework that can help wealth management firms digitize their businesses. But what does it really mean to be “digital”?

We believe an advisory firm has a “digital” business if the firm is leveraging technology both to make their business more efficient and to improve the client experience. Really, there is a spectrum of digitization, with building blocks that add on to one another, resulting in a fully digital business:

•The digital basics: Firms can start the process with their operational efficiencies: Are you fully utilizing your portfolio management and rebalancing software, and have you automated workflows in your customer relationship management to streamline daily tasks?

•Building on the digital core: Once those technologies that are core to the operation of your firm are in place, you have an opportunity to improve engagement with your clients by offering them a digital experience. That includes: providing clients with online access to their financial information via a custom dashboard and access to their documents via an online vault; giving them a dynamic picture of their financial situation using online planning tools that aggregate both asset and liability data to provide a holistic view; and giving them the opportunity to collaborate with their adviser online via screen sharing, video chat, and e-signature capabilities for account opening.

•Delivering the full digital experience: Firms may want to take the concept of digitization one step further by providing a digital-advice offering in which clients answer a few important questions and are provided with an automated asset-allocation strategy that helps them achieve their goals.

•What's next: Firms then need to pay attention to how their digital footprint is used and how it affects the client-acquisition process. Have you audited and/or upgraded your web presence? Some firms are now using new technologies to provide client service and support through click to chat technologies on their website. And some are using data analytics to track visitors and understand prospect behavior in more detail.

(Related read: How to beat the robo-advisers)

The notion of a fully digital experience marks a significant shift for most advisory firms. Based on our recent e-adviser research, we found that only three in 10 advisers are using a broad range of technologies, and using them deeply. This provides a tremendous opportunity for advisers to take advantage of technology to help grow their business, expand their geographic reach and attract more Gen X and Y clients.

So, if you're thinking about integrating these digital building blocks, consider the following three things:

1. You can't start at the ending: We've had hundreds of conversations with advisers in the last year about adding a digital-advice offering to their business. Many of them wanted to deploy a solution very quickly, but after thinking through the implications to the rest of their business infrastructure — both operational and organizational — they pressed “pause.” That's because this is a process, and it requires significant planning and consideration. Consider the digital building blocks that lead up to a fully digital experience.

2. So, start at the beginning: A digital audit: We've identified the steps you need to consider before you leap, and I outlined them in a LinkedIn post.

3. And, stay focused on the core: All things digital tie back to your core business strategy. The most important thing firms need to do is know what their objective is and what their target market is. Will you be leveraging these new technologies to generate increased engagement with your current clients — whether that's baby boomers or Gen Xers — or will this be a growth play for targeting the children and grandchildren of your clients, your client base in the future? You need to know that before you begin to think about what services and capabilities you want to provide, your pricing model, how you'll align your talent to the new services you plan to offer, and what your go-to market strategy is.

We've seen some firms who have been early movers in digitizing their businesses. They play an important role in the technology development cycle, helping technology providers refine and redefine solutions. I believe that those firms that are thoughtful about developing a plan may be just as successful. Make sure you spend time upfront thinking about your strategy for going “digital” and implement the solution that's best for your firm — and your clients.

David Canter is executive vice president, practice management and consulting, for Fidelity Clearing and Custody Solutions.


What do you think?

View comments

Recommended for you

Featured Research

The 2015 InvestmentNews Adviser Technology Study

This in-depth study provides a blueprint for the industry, providing actionable information to advisers, along with the latest solutions to help them drive profitability, efficiency and growth for their firm.

Featured video


When can advisers expect an SEC fiduciary rule proposal and other regs this year?

Managing editor Christina Nelson and senior reporter Mark Schoeff Jr. discuss regulations of consequence to financial advisers in 2018, and their likely timing.

Recommended Video

Path to growth

Latest news & opinion

Cutting through the red tape of adviser regulation is tricky

Don't expect a simple rollback of rules under the Trump administration in 2018 — instead, regulators are on pace to bolster financial adviser oversight.

Bond investors have more to worry about than a government shutdown

Inflation worries, international rates pushing Treasuries yields higher.

State measures to prevent elder financial abuse gaining steam

A growing number of states are looking to pass rules preventing exploitation of seniors.

Morgan Stanley reports a loss of advisers after exiting the protocol for broker recruiting

The firm said it lost 47 brokers in the fourth quarter, the most in any quarter of 2017.

Morgan Stanley's wealth management fees climb to all-time high

Improvement reflect firm's shift of more clients into fee-based accounts priced on asset levels, which boosts results as markets rise.


Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting It'll help us continue to serve you.

Yes, show me how to whitelist

Ad blocker detected. Please whitelist us or give premium a try.


Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print