Most advisory firms believe technology is the wave of the future, but do they really know how to maximize its potential as a disruptive strategy for growth?
In the InvestmentNews 2022 Adviser Technology Study, InvestmentNews Research, along with sponsors Allianz and Emotomy, examined trends affecting how over 200 advisory firms use technology, including gaps between firms’ actual experience with technology and its potential to improve client experience and drive future growth.
#1 Requested Tech Feature for Advisory Firms: Integration
According to the study, 86% of advisory firms believe technology is significant to their future growth, but only 34% believe that growth will be driven by technology. Why such a discrepancy?
Many firms have already invested in the technology they believe is important to their success, but that doesn’t mean all of them use it to capacity. Only about half of respondents say they are fully using the technology they already have available. Many firms have customer relationship management (CRM) and/or document software, but only 64% say most of their professionals use it.
More than half the survey respondents listed lack of integration between software applications as a primary obstacle to optimal use of technology. Fragmentation is a consistent trend in this study, with firms making little progress toward connecting various systems. Of all software types, CRM software is the clear integration winner, with 62% of respondents agreeing that their CRM software is the most integrated system.
Although this may be helpful for advisory firms’ workflow, it’s also important to ensure clients have a positive experience when they engage with the firm so they become repeat customers.
How Tech Can Help Client Experience Strategy
Most advisory firms in the study (65%) agree that enhancing clients’ digital experience is important. This is consistent with client demands. 73% of consumers surveyed said they would find value in a portal to access their accounts. Additionally, many consumers say they want more visualization, personalization, and coordination.
Although news reports on trends like artificial intelligence and cryptocurrency make them popular topics of conversation, consumers’ actual tastes aren’t that fancy. Relationships still matter. Beyond personalized attention, a high percentage (88%) of consumers value visualization tools to help them understand outcomes and manage risk. Easily accessible tools and information help consumers simplify complex information and place greater confidence in their advisers.
Where the Money Goes: Cybersecurity and Marketing
Giving clients access to easily comprehensible information builds confidence, but that trust is broken quickly when security is breached. In the survey, 58% of firms cited cybersecurity as their highest concern. It’s no wonder — global threats in cyberspace are growing. Spending on cybersecurity by advisory firms is likely to increase given the rise of international risk, malware, and digital crime.
Marketing is another high-cost item for advisory firms. Unfortunately, digital marketing budgets don’t always conform to strategies that pay off. For example, most new clients looking for an adviser ask for personal referrals or search for information online. Most firms, however, prioritize social media and email marketing in their marketing budgets. Unfortunately, this money is mostly wasted. Fewer than 5% of consumers use social media to find a new adviser. Advisory firms would better match potential consumers’ search patterns if they focused their marketing efforts on website design, search engine optimization, and unique content.
Although advisory firms continue to invest in technology to meet client demands, they have a mixed record of success. The InvestmentNews 2022 Adviser Technology Study shows that clients prefer individualized financial services and easily digestible information to the latest buzz. Firms want to improve client experience but are also focused on protecting themselves from cybersecurity threats and software integration. Ultimately, if a firm prioritizes only one of these, it may miss out on opportunities to use leverage technology as a growth strategy for the future. A smart technology-driven growth strategy incorporates a multi-faceted approach to improve both adviser and client experience.
Ready to streamline your workflow and improve client experience with a new document management strategy? Docupace’s software can easily integrate with your CRM and other software. Contact communications@docupace.com to learn about solutions for your firm’s specific needs.
Ryan George is the Chief Marketing Officer at Docupace. He is responsible for the company’s brand awareness, early-stage sales pipeline, content strategies, customer and industry insights, internal and external communications, design, and events. George actively engages in leadership roles in both the financial services and marketing communications communities. He a member of the Forbes Communications Council, an invitation-only, fee-based organization of senior-level communications and public relations executives, the CMO Council and the CMO Club.
