Is your firm's tech stack driving away financial advisors?

Client relationships aren't the only ones that matter in wealth management — a firm's bond with its advisors is equally important. Advisors are the engine of this industry, and when they decide to move on, their clients are often close behind. 

Advisor attrition has more than one driver, but depriving advisors of the right tools and technology with which to efficiently serve clients is a big one. Sixty-five percent of advisors surveyed for Advisor360°'s 2024 Connected Wealth Report said their tech needs improvement; a whopping 92% said they would switch firms over bad technology; and, most alarmingly, 44% already had. 

Advisor360°

The biggest complaint of those advisors surveyed: Bad data is slowing them down and eroding client trust. One way to keep top talent and attract next-gen advisors is to employ a technology stack and data strategy that makes the advisor's life at work better — more productive, more meaningful and more profitable. 

To do this, firms must ensure that their tech delivers in three key areas.

Advisor productivity

Advisors want technology that gives them an edge, but many firms' systems for financial plan analysis, account opening and investment management are far less streamlined than they could be. 

I saw this dilemma unfold in real-time at an RIA aggregator that doubled its AUM in five years through acquisitions. But instead of spending time acclimating to the new firm's culture, incoming advisors and their teams were swamped with repapering conversations and client onboarding tasks. Even worse, the old CRMs didn't integrate with the new systems, creating the need for all manner of time-consuming manual entry. To say integrations were tricky is an understatement. 

READ MORE: How the relationship between financial advisors and technology is changing everything

This common scenario leaves advisors feeling frustrated with the amount of time they spend on administrative tasks. Advisors want technology that integrates seamlessly across activities (CRM, trading, reporting, etc.), but they also need digital assistants and automation. Eighty-four percent of advisors we surveyed want AI-enabled platforms and automation to help solve for this in the front office, back office or both.  

Firms that are ahead of the curve are already using AI-enabled tools both to accomplish routine tasks, like scheduling appointments and composing follow-up emails, and to streamline workflows. What's more, AI is evolving to the point where it can assist with higher-order work like rebalancing retirement accounts and proposing renewals on life insurance and policy updates.  

AI and machine learning can also help advisors make better decisions and customize client service. For example, advisors we're working with are starting to use machine learning to employ predictive modeling to help isolate a client's risk profile and suggest the right investment strategy. Machine learning is also helping to analyze behavior — including how often clients view their accounts and what type of information they access — to help advisors create customized service strategies.

Personalized advice

Advisors' reliance on technology to serve diverse client needs will continue to grow. It's not surprising that they want tools that help provide tailored investment advice and financial planning solutions for different demographics with diverse needs. Advisors need a digital experience that offers a single, holistic lens into their clients' full financial lives. To put personalization into practice, advisors need the complete picture for each client in one place — that's portfolio performance, insurance policies, physical asset tracking, statements, tax integrations, etc. 

Time and again, I've seen this game-changing capability in action. Consider the regional bank advisors competing — unsuccessfully — with a national rival for private wealth clients, in part because they lacked scale and a brand name. What turned things around? Technology that made it easy to compile financial plans incorporating all account types and assets — insurance, investments, estate solutions and even assets held-away assets. These advisors could finally prove their case for providing full-service, customized client care. 

Firms with technology that deliver on a personalized wealth planning experience and a thoughtful client experience make growth easier for their advisors.

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Good data

Helping advisors increase productivity and give personalized advice comes down to better data management and integration. Plenty of firms invest in the high-end sports cars of technology when they update their tech stacks, but without the right data foundation, it's like driving those pricey cars on a dirt road — they don't get the speed and performance they want.

Automation removes the inertia in the advisor's day-to-day, making it easier to serve clients. But just as a sports car needs a paved road for optimal performance, automation falls flat without the best data. Without fast, accurate and accessible data, software output is inherently flawed, compromising the effectiveness and reliability of automated workflows for firms and their advisors.  

Personalized services can be achieved through data aggregation, and custom insights can be delivered through smart and thoughtful leveraging of AI. 

In my experience, having the right data solution is transformational: Think an insurance broker using AI to create customized client service strategies; or an advisor who — truly — cuts their account-opening time in half; or a bank that creates comprehensive, accurate client reports in seconds with a single click. All of this is possible with a technology platform that has the right data solution. Firms that do this well give their advisors more opportunities to reach unprecedented levels of productivity, grow organically and serve more households. 

Advisors want to feel good about where they work, which means they need tools that help them serve clients better and give them a competitive advantage. Firms that don't heed the call for better technology will see it quickly become a deal breaker as dissatisfied advisors continue to vote with their feet, taking client assets with them.