Study Reinforces Younger RIA Clients' Tech Demands

Editorial Staff

13 April 2022

A survey of 152 registered investment advisors underscored how important it is for wealth managers to use digital technology to communicate and put wealth management ideas into practice. Some 60 per cent of respondents said Gen-X and Millennial clients want such offerings.

The findings appear in Fintech for RIAs: Elevating Client Experience, from Franklin Templeton and AdvisorEngine.

While the results aren’t particularly surprising – the digital enthusiasm of younger HNW individuals is almost a cliché – they are bound to reinforce the idea that the wealth sector cannot afford to be left behind on tech.

“We’re in the midst of the fourth industrial revolution, and the accelerated pace of technological advances is rapidly refreshing how financial solutions are delivered,” Jonathan Kingery, head of private wealth at Franklin Templeton, said.

The study, conducted alongside Institutional Investor’s Custom Research Lab, was carried out in September last year.

More than 80 per cent of survey respondents see a critical or moderate need for automation support for four processes: client onboarding, day-to-day client service, analysis of data through the client lifecycle, and marketing and business development outreach to tomorrow’s clients.

“RIAs’ interest in technology stems more from their desire to service clients more completely and responsively than from eagerness to avoid or offload administrative work,” George Tamer, head of sales at AdvisorEngine, said. “It’s no secret that tech will continue to play a pivotal role in wealth management. But the question now is, ‘What are the most useful ways to plug them into a financial advisor’s daily work?’”

Keeping and finding talent
In a tight labor market, having digital capabilities is also crucial in winning and holding talent, the survey found.

Some 41 per cent of respondents strongly agreed that “an RIA firm’s digital infrastructure is increasingly important in hiring and retaining first-rate professional talent.”
Advisors don’t see technology as making humans redundant.

RIAs covered by the survey are more than three times as likely to view the next generation of investment management technology as “complementary” to their current way of serving clients rather than as a disruptive threat to their professional practice.

Some 69 per cent of respondents think the greatest value for technology integration is the ability for asset/account aggregation that provides a unified view of holdings to clients.