Only two in five financial advisers are implementing technology throughout their businesses, but those who do are earning more and serving more millionaire clients than their peers, a new study shows.
The number of advisers who use technology in multiple ways with their clients and prospects has grown over the past two years to about 40%, from 30% in 2014, according to adviser surveys about technology use sponsored by
Fidelity Investments.
Tech-savvy advisers, who used about twice as many different types of technology than the others, earned 24% more than other advisers, the 2016 survey of 628 financial professionals found. They also manage about 42% more in assets under management than those who don't integrate technology deeply into their processes and procedures.
(More: Advisers use technology to attract millennials)
"It was surprising that 60% of advisers still aren't embracing the full solution of technologies out there," said Tricia Haskins, vice president of practice management and consulting for
Fidelity Clearing & Custody Solutions. "It's those who embrace technology who are going to be the ones who scale, grow and ultimately win."
Many firms are increasing their technology offerings and communications strategies to be able to serve consumers who are used to on-demand services such as Netflix and Uber. At advisory firms in general, technology has been the fastest-growing expense over the past five years,
according to InvestmentNews research.
Advisers who aren't adopting technology, though, are not seeking to reject it, according to Ms. Haskins.
It isn't a lack of desire for technology, but rather that they don't know how to apply it to their business or where to begin, she said.
Tools that aggregate client financial information is one area that increased in use by advisers as a whole from 2014 to 2016.
About 87% of the firms that implement technology well are using data aggregation tools to gain a total view of client assets and liabilities, which is up 18% from the 2014 Fidelity survey. Data aggregation also has grown among less tech-focused firms to 46%.
(More: Meeting clients high-tech expectations)
Looking forward the next two years, more advisers are poised to add
financial planning technology and robo-advice platforms, Ms. Haskins said.
Among the tools that technology-embracing advisers adopt:
• Paperless tools like electronic signatures and digital delivery of reports.
• Online collaboration tools like a vault to communicate with clients and their other professionals.
• Interactive or visual reports for clients.
• Automated email alerts or texts to let clients know new reports or other communications are available.
• Communicating with clients via videoconferencing or other online conferencing.
• Engaging with clients and prospects on social media and using Google Analytics to track website traffic.
