The most successful advisors understand that technology is an ally to drive greater growth — and achieve greater profits. Year-over-year, our annual Advisor Authority Study of nearly 1,600 RIAs, fee-based advisors and individual investors nationwide, has been tracking the trends, and one thing is clear: tapping the power of technology continues to be a distinctive trademark of the most successful advisors. All advisors should take a page from their playbook.

THINK LIKE A CEO
Successful advisors think like CEOs. They are forward-looking strategists who create greater value and unlock it for their clients, their employees and for themselves. Each year, when we zero in on two types of successful advisors — the high AUM advisors who individually manage $250 million or more, and the high-earning advisors who make over $500,000 in yearly income from their advisory business — the data consistently shows that they use more technology, and spend more on technology, to build a more effective practice. And as we have seen in previous years, these top performers have adopted technology at nearly twice the rate of the typical advisor, to create efficiencies, achieve scale and drive profitability.

Year-over-year, the pursuit of profitability continues to be RIAs’ and fee-based advisors’ single most important practice management concern. And year-over-year, successful advisors are more likely to harness the power of technology to outperform the competition — and drive greater growth. This year, the successful segment of high AUM advisors is even more tech-obsessed, saying that technology is both their No. 1 priority when managing their practice — and their single most important solution to enhance profitability, according to this report. Clearly, successful advisors understand technology’s tremendous power to disrupt, disintermediate and disaggregate at every point along the value chain. From their perspective, the only thing more expensive than adding technology is not adding technology.

COMPETITIVE CUSTOMER EXPERIENCE
Studies show that the customer experience, defined as the way an advisor and investor interact at all points in their relationship, is a clear competitive advantage. Research also confirms that the most effective customer experience is one that is tuned in to clients’ unique needs and puts their best interests first. This year we examined how successful advisors leverage technology to create a more effective customer experience, align with client expectations — and gain an edge in today’s competitive market — ultimately attracting more new clients, retaining more satisfied clients, and capturing a greater share of wallet.

Investors say a holistic approach to financial planning is among the top reasons they choose to work with an advisor. They also demand products and solutions that are transparent, lower cost, higher value and more choice. Over the next 12 months, successful advisors are more likely to adopt the latest account aggregation platforms to take a more holistic approach — consolidating data from multiple sources, utilizing products from multiple providers, and managing assets seamlessly across taxable and tax-deferred vehicles.

Investors demand more customization. Over the next 12 months, successful advisors are far more likely to leverage artificial intelligence and data analytics to understand client behavior and preferences. They are also more likely to leverage risk management and tax-optimization tools, with real time market data and greater computing power, to build customized client’s portfolios using sophisticated investing strategies and specialized techniques. And this year successful advisors are nearly twice as likely to add robo advisors as an efficient way to manage a portion of assets for their clients, from the entry level investor up to the ultra-high-net-worth.

ENHANCED HUMAN TOUCH
Successful advisors continue to use technology to enhance — not replace — the human touch. This year’s study revealed they are far more likely to integrate interactive websites and mobile technologies into their practice over the next 12 months, so they can serve different generations of clients in exactly the way they expect, from boomers at their desktops to millennials on their iPhones. With robust CRMs, they capture actionable data, tracking who visits their website, opens emails, answers phone calls, and which content and messages resonate best. With predictive profiling, they can anticipate clients’ needs and concerns — almost better than clients know themselves. With real-time personalization, they can give clients the information they want, precisely when they want it.

But in an era of instantaneous, multichannel communication, successful advisors still say face-to-face remains their number one way to communicate. Yes, you need to be a digital advisor. It can complement your practice. But it’s no replacement for the human touch. As clients’ wealth grows, as their financial life becomes more complex, their demand for guided advice will also grow. And as consumers continue to become better informed in an increasingly complex market, they not only seek guided advice, they seek unbiased advisors who put their best interest first.

REFINING SUCCESS
The most successful RIAs and fee-based advisors are forward thinkers and technology adopters. Year-over-year, data shows that advisors who leverage technology are the top performers who can build a stronger practice and sustain greater profits. Technology continues to alter the way they provide advice, manage portfolios, and communicate with clients. This year we have seen how the latest tech innovations — especially artificial intelligence, risk management tools and mobile technology — provide new opportunities to create a more efficient back end for their business and a more effective front end for their clients.

Ultimately, successful advisors use technology to achieve the right balance: spending less time on the business of managing their practice, and more time on high value activities like building relationships and advising clients. Our research continues to confirm that when you combine the power and convenience of financial technology with a human advisor focused on serving a client’s best interest, you have the best chance to define and refine your own path to success in an industry where clients continue to demand greater value and competition continues to increase.

Mitchell H. Caplan

Mitchell H. Caplan

Mitchell H. Caplan is CEO of Jefferson National, now operating as Nationwide’s advisory solutions business.
Craig Hawley

Craig Hawley

Craig Hawley is general counsel and secretary at Jefferson National, now operating as Nationwide’s advisory solutions business.