Nine-tenths of advisors feel underserved on tech

The wealth industry is standing at a crossroads as advisors balance hopes for growth and enhanced client service through technology against challenges and barriers to adoption of technology, according to a new study from Orion.

At its annual Ascent conference in San Diego, Orion unveiled the findings from its second Wealthtech Survey, which offers insights into technology adoption trends among fiduciary advisors.

According to Orion’s 2024 Advisor Wealthtech Survey, more than half of the 542 respondents (52 percent) said they plan to amplify their investments in client-facing technology in 2024, but just 9 percent believing their firms have provided all the tech solutions they need.

Orion CEO Natalie Wolfsen highlighted a buoyant mood within the sector, noting that advisors are forecasting an average growth rate of 16 percent for the upcoming year. This follows a 26 percent increase in assets under management over the preceding three years.

"Investors are demanding more of their advisors, and advisors are poised to deliver,” Wolfsen said. “In the next three years, two-thirds of advisors (64%) say they will deliver a more personalized, customized client experience."

The enthusiasm about technology is tempered by challenges in integration within tech stacks. On average, respondents to Orion’s survey estimate just half of their technology is integrated, pointing to an opportunity to reduce administrative burdens – currently eating up about 28 percent of advisors' workdays – by breaking down tech silos.

Highlighting a trend of advisors focusing more on their core competencies and enhancing client interactions, the survey shows that advisors anticipate a 4 percent rise in their outsourcing expenses this year.

Nearly half of the advisors are already at least partially outsourcing services like compliance and regulatory reporting (46 percent), portfolio accounting (46 percent), investment management (38 percent), trade execution (36 percent), and client reporting and communication (34 percent).

Artificial intelligence and machine learning reemerged as areas of interest, with 38 percent of advisors – up from 23 percent in 2023 – predicting these technologies will significantly disrupt the wealth management industry within the next three years.

Advisors are still cautiously optimistic, with 30 percent having plans to harness AI and machine learning within that near-term period, though it’s an improvement from just 18 percent saying they had three-year adoption plans in 2023.