While software for financial planning and managing client relationships is now widely embraced by financial advisors, few are using tools to keep their firms safe from digital threats.
Less than a quarter (24.33%) of financial advisors are using cybersecurity software, according to the 2023 Advisor Software Survey from Inside Information and Technology Tools for Today. That compares with 83.68% adoption of financial planning software and 96.46% for CRM systems.
T3 president Joel Bruckenstein and Inside Information owner Bob Veres shared the results of the survey, which polled 3,309 people from advisory firms, during the first day of the annual T3 conference in Tampa, Florida. The data were collected from December through early March.
The lack of adoption of cybersecurity tools in the industry is “disheartening,” Bruckenstein said.
“If someone is buying CRM today, one of the other competitors is losing a client,” he said during his keynote presentation. “But we are woefully low on market penetration of third-party providers of cybersecurity.”
Even among the quarter of advisors that have some form of cybersecurity protection, many aren't sufficiently protecting their firm from digital threats, Bruckenstein added in a separate panel.
The stakes are high for advisory firms. Six in 10 small businesses go out of business within six months of experiencing a cybersecurity incident, according to TradePMR chief operating officer Scott Victoria.
The T3 Inside Information survey also found that adoption remains low for digital marketing, estate planning and retirement income. However, many new technologies are coming to market to help address these areas for advisors.
One such company is Wealth.com, a digital estate planning software that launched two years with the goal of helping more financial advisors create, manage and visualize estate plans. The startup was attending its first T3 to connect with existing clients and meet other fintechs as potential integration partners, said chief product officer Danny Lohrfink.
“I think estate planning as a whole – it’s an industry that is incredibly antiquated,” Lohrfink said. “We’re in the nascent years of it growing up and modernizing.”
FP Alpha, a planning software that attracted attention at the 2022 T3 conference and was referenced by Bruckenstein as an interesting company to watch, announced significant enhancements to its estate planning products and said it would unbundle them from the rest of its software.
“Instead of exclusively packaging the FP Alpha platform with all 16 planning disciplines, the Estate Module will be available for purchase as a standalone product,” FP Alpha founder and CEO Andrew Altfest said in a statement. “With estate planning being incorporated more and more into the comprehensive advice process, we wanted to ensure as many advisors as possible had access to our solution.”
Bruckenstein presented T3’s first-ever lifetime achievement award to Bob Curtis, who co-founded the software company PIETech in 1997 to create MoneyGuide Pro, the most popular financial planning software among financial advisors, according to T3’s survey.
Curtis had been enjoying retirement since selling MoneyGuide to Envestnet in 2019 for $500 million, but has plans to reenter the advisor technology world. After accepting his lifetime achievement award, Curtis revealed his vision for WyzPlan, a next-generation financial planning software from PIETech.
“Financial planning is just retirement planning for a small group of people: old people who are delegators with substantial investible asserts,” Curtis said.
But only 38% of Americans have a written financial plan, he added. With WyzPlan, Curtis hopes to use technology to provide more types of planning to people of all ages and income levels.
“It will not look like anything it's expected to be, because we’re starting from scratch,” he said.
Before Curtis took the stage, the current head of MoneyGuide — Rose Palazzo, group president of Envestnet Financial Planning — introduced the ongoing investment that Envestnet is making in the software it bought. Palazzo announced the rollout of MoneyGuide’s latest update, which includes a new goals-based planning digital workflow, an update to the software’s Monte Carlo calculations, new functionality to add health care and HSA accounts to plans, and a host of integrations to fintechs and wealth management firms.
Palazzo also showed off the latest from MoneyGuide’s prospecting center and new functionality in MoneyGuide Elite to help advisors address retirement income planning. She also teased a coming new product which will leverage Redi2, the fee billing software it acquired last year, to help advisors bill for à la carte financial planning services.
"There has arguably never been a more important time for an emphasis on financial planning, and we consistently update our offering to set the pace of planning technology,” Palazzo said. “Our goal is to make it easier for advisors to develop deeper client relationships and expand their services to all clients and prospects — regardless of their wealth, stage in life, or complexity of their finances — through digital financial planning experiences."
Additional updates from the conference included a new portfolio management suite from AdvisorEngine, the advisor fintech platform owned by Franklin Templeton. The suite unites performance reporting, rebalancing, and fee billing and other daily tasks across multiple custodial systems into a single digital dashboard.
“The modern advisor needs a sharp understanding of performance dynamics and asset data all in one place,” AdvisorEngine CEO Rich Cancro said in a statement. “Our priority is delivering a harmonized process.”
Advyzon Investment Management, the turnkey asset management program from fintech company Advyzon, also launched a new investment model marketplace it calls Nucleus, which provides unified managed accounts along with reporting and trading functionality. At launch, Nucleus will provide access to more than models.
Chicago-based Mesirow Fiduciary Solutions adds flexPATH's plan-level outsourced fiduciary book, boosting its retirement market reach to $164 billion.
Also, Raymond James's employee advisor channel adds breakaways from Wells Fargo and Stifel, while UBS welcomes an ex-Morgan Stanley duo in Indiana.
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