Anyone looking for proof the wealth management industry is at an inflection point should look at how technology is changing the very nature of the job. That change resonates everywhere from wirehouses to RIAs – with new tools and devices in use, new SEC and FINRA regulations and a shift towards younger advisors.

RIAs like Chicago-based Main Street Financial have launched their own digital tools for clients and other advisors. In 2013, executives at the firm launched Oranj, a real-time account aggregation tool that lets advisors see clients’ held-away assets. This year, the firm launched Main St. Advisor, an app that lets clients open accounts electronically and conduct virtual meetings with advisors, who leverage low-fee investment management software to oversee portfolios.

Hard data might capture this industry inflection point better than any anecdote. According to Fidelity’s 2013 RIA benchmarking study, 77% of high-performing advisory firms use technology to enhance the client experience. The 2014 independent advisor outlook study by Schwab found that 56% of advisors said supplementing their service with automated investment management could help drive growth. A joint study in 2014 by McKinsey and the World Economic Forum discovered that 80% of global banking IT executives believe cybersecurity will have major strategic implications for their firms during the next few years.

All signs point to the need for advisors to change, simply in order to remain relevant to clients and prospects. Technology like web-based applications and cloud-based desktops enable new ways of operating, and increase efficiency in ways that were not possible a decade ago.

With cloud desktops and similar platforms, advisors can have access to all their software – including CRM, portfolio management and document management – through a single web-based portal.  In today’s world, this is considered table stakes just to keep up with high-performing competitors and to attract younger advisors.  Firms that fail to embrace technology will sacrifice growth and profitability in the long run. Their business models are unlikely to survive when the next generation takes over the practice.


Advisors also need to focus on the security of their clients’ and firm’s data. This is becoming an increasingly central focus across the industry, including to regulators. Moving your IT to the cloud can help increase levels of security, however it requires the proper due diligence and tools to ensure protection.

There’s no denying that larger forces are affecting the advisor business model. Take the shift toward younger clients and the need for younger advisors. In a mere five years, millennials will comprise half the workforce. They will gravitate toward firms that give them the tools they prefer to use, and toward advisors who inspire innovation. Meanwhile, firms embracing this technology will improve the client experience and do more with fewer staff. It’s no secret that fee compression means advisors will need to increase the amount of clients they serve, just to continue to generate the same level of revenues. Continuing to leverage and adopt technology as a core part of the business model will be one of the keys to success.


Studies have shown that the most effective firms are increasing their spending on IT infrastructure. CEOs and COOs often prioritize dollars spent on overhead, but they don’t always prioritize what they get for those dollars. Cloud computing for example can bring cost savings to firms currently devoting a large portion of their budget to maintaining an in-house IT infrastructure.

Five years ago, keeping your technology in-house might have been the less expensive option. That’s no longer the case. Cloud computing reduces the cost and complexity of managing your IT infrastructure as the cost of maintaining and keeping your local infrastructure up-to-date to support security, mobility, business continuity and disaster recovery have begun to outstrip the cost of shifting to a cloud platform.

RIAs using cloud technologies also benefit from greater productivity and collaboration. Advisors can work with more clients and improve client service when they are able to access their information and files from anywhere, whether on the move or at a client’s location. Simply put, the cloud lets RIAs turn their focus to growing their business rather than worrying about their IT. 


Upgrading technology, particularly through cloud-based platforms, gets advisory firms out of the hard-to-manage IT business and lets them focus on the core aspects of their practice. That’s why advisory firms must choose their technology vendors carefully. All providers are not created equally. These vendors should cater to advisors’ needs.

The best cloud-based IT outsourcing vendors create cutting-edge solutions through platforms that can evolve for the future along with the IT landscape. Platforms should be unified, so advisory firms can control and monitor all their various software together. Cloud-based solutions are best for integrating these otherwise disparate tools. Vendors that let users work on PCs and Macs, as well as on the tablets and smartphones of their choice, any time and anywhere, offer the most freedom. But they also must provide comprehensive cybersecurity that protects clients and advisors alike.

Change is sometimes painful, but top firms embrace and thrive on it. Going forward, advisors will have to evolve their practices every few years. They should get started now.

Sam Attias is vice president, financial services practice, at technology outsourcing firm External IT.

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