Right now, RIAs are busy formulating their business plans for 2015.  In the area of advisor technology, investment decisions have become increasingly complex: what kind of technology is needed, can current technology simply be upgraded—should new technology be purchased at all? To help advisors answer these questions, InvestmentNews performed a study on the effects of investing in technology for advisory businesses. According to the study, firms that integrated a variety of technologies and displayed an innovative and progressive attitude toward technology had higher revenues, profits, AUM, and number of clients than those who limited their technological investments.

What Types of Advisor Technology Are Used?

In the study, the technology ‘innovators’ were identified as using up to six software solutions on a daily basis. The most commonly used advisor technology applications are:

  • CRM
  • Financial planning
  • Account aggregation
  • Document management
  • Portfolio management
  • Portfolio rebalancing

Each of these technologies provides unique opportunities for efficiency, compliance, data accuracy and better customer service—but trying to manage so many distinct applications with siloed information can be just as inefficient as having no software at all.

The real benefit comes when these technologies can share data and talk to each other. When integrated, these technologies not only provide faster data and better insights to the advisor, they can automate entire processes with workflows—leaving more time for the advisor to focus on clients.

What Daily Processes Are Improved by Technology?

One of the most common processes that financial advisors automate is the opening of new accounts. Without technology, this can be a tedious process. Forms have to be filled out, mailed for signatures and checked for errors repeatedly until the new account can be finalized.

With integrated technologies, this process looks much different. By implementing CRM, document management software, forms filling software, and electronic signatures, the time required to open a new account can take minutes instead of weeks.

Through the use of these software applications, advisors opening new accounts experience the following benefits:

  • Software auto-populates electronic forms, reducing processing time and errors resulting from manual entry.
  • Forms are e-mailed to account holders for e-signatures, eliminating paper and courier costs.
  • Compliance review and approval processes are automated with workflows, allowing advisors to start booking revenue sooner.

This method of processing new accounts not only saves time, but records an audit history of every action taken at every step.

These efficiency and compliance benefits are not limited to the opening of new accounts. Virtually any data or document-driven process can be automated, including the creation of a blotter, storing client communications, social media archiving, AP processing, HR onboarding and document filing.

 

Why Adopt Advisor Technology Now?

A combination of factors including increased audits, changing recordkeeping requirements, the rise of mobile devices and social media and the vast potential for efficiency gains are driving advisors to shift their attitudes toward technology.

Those who realize these benefits are surging ahead in this competitive industry and allowing technology to take care of the back office. Now they can dedicate valuable time and effort to more important tasks, such as client and talent acquisition, money management, financial planning and client relationships.

 

To learn more about the benefits of adopting technology in your business, read our new whitepaper, “Technology Strategies of Top-Tier RIAs,” which summarizes the data from the InvestmentNews Research Study and outlines the practices of these top performing RIAs.

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