How Tech Is Propelling RIA Growth

A new report by Fidelity finds ‘digitally empowered’ firms had higher client and AUM growth rates.


Illustration by RIA Intel

Wealth managers that embrace tech are pulling ahead, according to a new report by Fidelity Investments.

The company found that tech-forward firms had a higher average client growth rate (20 percent compared with 8 percent) and double the average assets under management growth rate (22 percent compared with 11 percent).

Fidelity also found that advisors at “digitally empowered” firms had higher career satisfaction (81 percent versus 59 percent at non-tech-forward firms), higher firm satisfaction (64 percent versus 44 percent), and higher average compensation ($489,000 versus $373,000).

According to Fidelity, digitally empowered firms are firms that “consistently embrace technology, receiving significantly higher marks than their peers across a wide range of best practices,” including in the strategy used in deploying tech, the design and automation of workflows, and the activation of tech.

However, despite the benefits, only about 36 percent of advisors work at tech-forward firms, according to the report.

According to Fidelity, it is not enough to just add to the technology stack. Firms need to take steps toward achieving all the strategy, design, and activation best practices.

The strategy best practices cited in the report were having “a process for evaluating tech by strategy/need,” using “technology to differentiate their client experience,” and having “a formal, firm-wide digital strategy.”

The design best practices were having “a good grasp of available providers,” avoiding “wasting time rekeying info across platforms,” and using “automated workflows to be more productive.”

The activation best practices were providing “adequate training/resources on advisor tech,” tracking “tech performance metrics for optimal usage,” and implementing “new features of their tech.”

“Our study underscores the impact of technology as a growth driver for wealth management firms that harness its full potential,” Marissa Herr, head of technology consulting for Fidelity Institutional, said in a statement. “Those who think deliberately about the platforms, integrations, and tools that best support the needs of their advisors and clients today have a huge opportunity to create market differentiation.”

Firms and advisors who do think deliberately about technology report not just higher advisor satisfaction and growth rates but also a better client experience.

According to the report, advisors at tech-forward firms were 1.5 times more likely to report that their clients view their websites as easy to use and 1.7 times more likely to report that their clients viewed their workflows as efficient.

“Any firm would welcome these advantages at any time, but they are especially important now, as advisors and firms compete to meet rising investor expectations at scale,” wrote Fidelity.

A February report by ThoughtLab, Deloitte, and FNZ found that nearly 70 percent of investors wanted the same digital experience with their investment providers that they got with other digital companies. That report also found that 60 percent of Gen Y and Gen Z thought they would no longer need an advisor by 2030 because of advances in technology.

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