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6 Technology Tips for Advisory Practice Growth

As society continues to embrace digital trends, it seems that the future of wealth management will hinge on technology. Beyond attracting Millennials, either as investors or fellow advisors, keeping current with tech trends will allow you to stay ahead of the market and protect your firm.

As stated by Mitchell Caplan, “Advisors who manage more assets and generate more revenue spend substantially more on technology and adopt technology into their practice at twice the rate of the average advisor.”


How can you reach this return? The following 6 areas of emphasis provide ample opportunities for you to analyze and implement technology for your practice in an effort to keep current with the ever evolving landscape of digital utilization for financial advisors.

1. Video Conferencing

According to a recent Spectrem Group article, video-chatting is a communication tool that many investors would consider using to facilitate communication with their advisor. This method allows for personal interaction and augmented face-time with clients who may otherwise be unable to meet with you.

Moreover, video-chatting may prove to be a valuable tool for connecting with Millennials, especially UHNW Millennials. Spectrem’s research indicates that Millennial investors are the largest subgroup of investors who communicate with their advisors via video-chat on a regular basis, as shown in this table:


The data reported seemingly indicates that integrating video-chatting services in your firm can significantly help expand your ability to connect with clients. 2 Years ago Spectrem found that only ~25% of investors were willing to use video-chatting to communicate with advisors.

As such, it is likely that in the coming years, more investors will be willing to use face-chat as a medium for connecting and communicating with their advisor.

2. Social Media

Many advisors have recognized the unique client communication opportunities provided by an online presence. More advisors appear to be leveraging social media than in previous years.

According to Putnam Investments 2015 Social Advisor Study , which assessed over 800 financial advisors nationwide, social media is becoming increasingly more vital to many aspects of the industry.

Financial Advisors Using Social Media

According to Putnam, 81% of advisors use social media for business. In fact, social media is becoming increasingly more indispensable. As much as 79% of advisors acquire new clients through social media.

The data indicates that the median asset increase gained from social media activity is approximately $2mil. As such, it appears prudent to ensure that your firm is effectively leveraging social media.

3. Data

According to a Tech Trend’s article on Investopedia, if you’re not already utilizing small (client) data, such as demographics, you may be missing out. According to the entry, this sort of data is now being “harnessed and analyzed to better match a client’s life circumstances, investment objectives, and risk tolerance.”

In fact, some of this information may be derived from connecting with your clients via social media and analyzing the progression of their life stages. Data, both small and large, can be an extremely useful asset if properly utilized.

4. Client portals

Data consumption and technological advances seem to go hand in hand. I don’t mean data as in some arbitrary allotment devised by a telephone company to limit the extent to which a consumer may browse the internet. Rather, I am referring to the information people digest while browsing on the internet. As such, it seems logical that more clients would want to have access to their investment information.

In fact, according to a recent Harris Poll survey of affluent investors, 79% of investors indicated that regular access to their investment information, at any time of day, was important. Given this demand it is not surprising that 73% of respondents indicated that they use online sites or portals to view said information.

5. Mobile friendly

Perhaps one of the most important tech related investments you can make is ensuring that your company’s website and tools are mobile friendly. Mobile traffic is certainly taking charge, as the following illustration shows. While mobile sessions do not always have the highest engagement, they are still worth the investment. Catering to a client’s desires for convenience is critical.


In addition, having a website with a high mobile ranking (according to Google’s ranking system) is one of the many factors that determines your Google rank and associated position during a Google search. As a result, investing in the optimization of your mobile site can improve your company’s visibility on the World Wide Web.

Beyond the trends of the overall population, Phoenix Marketing International found that over half of a group of investors under 35 with $1mil of investable assets are more comfortable managing their wealth on their mobile device. As such, we can see that mobile platforms are vital to the future success of both your individual firm, and the industry as a whole.

6. Cybersecurity

As technological advances continue to permeate the market, our business continually adopt strategies for success that deepen our reliance on both technology and the internet. Many of these tech based strategies have a lot to offer, especially for small firms. However, it is important to note that while technology is beneficial, there are also potential dangers.

financial advisors cyber security

SIFMA says, “Small businesses are becoming increasingly more dependent on [technology] in an effort to increase efficiency and revenues. Through this dependency they become larger targets for cybercriminals looking to exploit technological vulnerabilities.” These exploits are potentially problematic.

The 2016 Internet Security Threat report by Symantec indicates that 43% of all cyber-attacks are targeted at small businesses with under 250 employees. Moreover, according to this same report, 10.8% of all cybersecurity breaches occur in the finance, insurance, and real estate sector with a staggering 120 million identities exposed.

According to ExternalIT’s 2015 cybersecurity report some of the more common cybersecurity deficiencies in the financial advising industry are: a lack of an official security information security policy, employee’s using personal devices and no or inadequate business continuity plans. For more information on this topic, please refer either to the ExternalIT report or to the FINRA guidelines.

In Conclusion: Considering the ROI of Tech for Financial Advisors

Unfortunately, one statistic stands out. That is, 54.2% of advisors determine the ROI of technology purchases on cost alone. This method of cost analysis seems outdated this day in age. Investments in different avenues of technology may require a large investment in time and resources to fully implement, but they offer impressive potential returns. Or, in the case of cybersecurity, peace of mind and secure data.

Do not discount the potential ROI of technology. You will soon see that your advisory firm is falling behind as the industry, as a whole, is increasingly becoming more reliant on tech.