RIAs rank technology spending as top priority amid competition from robo-platforms: Scottrade survey

As robo-platforms continue to spread across the financial services landscape, registered investment advisers are feeling the pressure to open their checkbooks in order to keep pace on the technology front. A new survey from Scottrade Advisor Services shows that RIAs are ranking technology spending as a top priority, replacing business growth as last year's top priority. Asked how they would spend an extra dollar to invest in their business, 27% of more than 300 RIA respondents said the money would be used to invest in technology. Technology spending edged out spending on business growth, which was the top choice of 24% of respondents. But, perhaps most telling, is the fact that just a year ago technology spending was the top choice of 25% of respondents, while spending on business growth was the top choice of 38% of respondents. “Advisers are expecting technology to improve their business results by reducing costs, improving service quality, increasing profitability and generally making life easier for everyone,” said Brian Stimpfi, senior vice president and head of Scottrade Advisor Services. Results of the survey, which was conducted in August, showed that RIAs are using a variety of financial management software for everything from financial planning and account aggregation to customer relationship management and tax optimizing. Financial planning, customer relationship management and portfolio management ranked as the top three areas for upgrading and enhancements over the next 12 months. Staying up to date with technology ranked as the top tech-related concern among the RIAs surveyed, followed by costs, integration and training. “The speed of tech innovation is accelerating, and though that's often a blessing it can also be a curse,” Mr. Stimpfl said. “For many financial advisers and their teams, technological change is outpacing their ability to adopt, learn and use it.” A large part of the pressure to keep up is coming from the growth and adoption of automated robo-platforms. While 91% of RIA respondents expect robo-platforms to change the advice industry, they said the biggest impact will be on fees, which was a concern of 46% of respondents. RIAs are also concerned that the robo platforms will appeal to younger investors and raise expectations for new ways of interacting between clients and advisers.