Numbers Game

62% of firms plan to adopt new client-facing technology this year

New benchmarking data highlight independent advisory firms' intention to invest in their digital client experience

Apr 12, 2019 @ 12:05 pm

By Ellie Zhu and James Gallardo

Our past research has revealed that independent advisory firms often rated improving the digital client experience as less important than improving adviser productivity and building efficiencies. But data from the 2019 InvestmentNews Adviser Technology Study point to a potential change in sentiment.

Client experience leaped to the forefront of adviser technology strategy this year, and was selected and ranked at No. 1 more frequently than any other consideration as a top metric both for evaluating current technology and for consideration when investing in a new application.

But current usage of client-facing software solutions is underwhelming. The only tools used by a majority of firms are electronic signatures (72%), client-facing portals (71%) and video conferencing software (67%). (See Figure 1.)

Other tools utilized elsewhere in the financial services industry, such as mobile-optimized websites, digital account-opening systems and messaging apps are leveraged by just a minority of advisory practices.

That said, adoption rates are set to accelerate in 2019. A majority (62%) of the firms surveyed plan to adopt at least one solution this year, and 27% plan to adopt multiple technologies focused on client experience.

Fig. 1: Firm usage of client-facing software/tech solutions
Base: All respondents
Fig. 2: Firm adoption of planned client-facing software/tech solution in 2019
Base: All respondents that don't use each solution

What solutions are firms investing in most? Many firms that have yet to adopt the two most popular solutions (e-signatures and client-facing portals) plan to catch up and bring them onboard this year.

Otherwise, advisers are picking and choosing to add the solution or solutions that make the best sense for their practices. When looking at firms that don't currently use different client-facing solutions (Figure 2), most show planned adoption rates this year in the 10% to 20% range.

One feature that sticks out are the fully digital account-opening and onboarding technologies. While these solutions are used by only a quarter (24%) of firms, their use is expected to nearly double this year.

This is the holy grail of client-facing tech for many advisories: to replicate the speed and convenience of tech-driven, direct-to-consumer platforms that can open accounts in minutes. But it has proved elusive for most advisories and the IBDs and custodians tasked with providing such solutions.

It's clear from adoption rates that there is runway to deliver a better client experience, but most advisory firms have received and are acting on the message that sticking with legacy systems and not updating the digital experiences they offer their clients to match those seen in the consumer space is not a viable option for creating a sustainable practice.

(More: How can advisers continue to differentiate in an increasingly digital world?)


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