Innovative technology can help transform advisors' workflow — but adoption takes time.
Just because broker-dealers and custodians may offer innovative tech solutions doesn't mean advisors will utilize them.
“Our firm is not embracing the technology available. They are falling behind,” said one advisor in Financial Planning’s annual Tech Survey.
The majority of respondents to the survey said they didn’t use tools like macro risk software or social media management tools.
Nearly a quarter, or 65, of the advisors surveyed said they didn’t use software to manage their client’s portfolio. The survey also found 9% of advisors don't use CRM software — the most widely used tool.
Overall, advisor software use has not grown substantially over the past two years.
The number of advisors using CRM software only went up by a little less than four percentage points. The number of advisors using financial planning software actually went down in 2018 from the year-ago period by a little more than three percentage points.
While many advisors say they want
“We haven't purchased any new technology since opening the doors in 2012,” said one advisor.
So what’s the hold up?
It might have more to do with which advisors are choosing not to adopt software, according to Jon Patullo, managing director of technology platform management at TD Ameritrade Institutional.
“Any advisor that is out there looking to grow is definitely leveraging technology,” he says.
Additionally, some advisors might be focused on the cost, rather than the reward.
“Sometimes [they] look at a technology as an expense" when it’s more of an investment, Patullo says.
Slow adoption has little to do with the complexity of the technology, according to the survey.
While chatbots are the tool least used by advisors at only 5%, they are considered the easiest tool to master.
From CRMs to robo advisors, planners share what's in their toolkit.
On average, the 300 respondents reported that no software was above average difficulty to master.
While products may not be too complex, they still require training, according to Patullo.
“You need to take the time to learn the system to really get the most out of it and to see if it’s for your organization,” Patullo says.
For advisors that do invest the time and money, the benefits can mount up.
Throughout the survey, planners left comments on how technology had improved communication with their clients, helped connect them with new and younger investors, helped train junior advisors and saved hours of time.
“[It] used to take advisors three months to rebalance all their accounts,” Patullo says. “Now we’ve brought that down to minutes, essentially. In a couple clicks they can rebalance all their accounts.”
