Advisors Say Tech Both Help And Hindrance


By Karen DeMasters –

Although a large majority (82 percent) of small- and medium-size RIAs say using technology has helped their business, a sizeable group also say they still have problems with it, according to a survey released Monday by Trust Company of America.

According to the 2018 Entrepreneurial Advisor Survey, 71 percent of RIAs say they achieve greater efficiency in accomplishing tasks by using up-to-date technology and 43 percent say technology has enabled them to comply better with regulations.

But despite the advantages that technology provides, “many advisors have found that new investments in technology don’t always go smoothly. Increasingly, advisors (44 percent) are finding that despite large investments in client relationship management systems, client reporting and portfolio management software, they are frequently not satisfied with the outcomes,” the report said.

In addition, incomplete or inadequate integration was cited by 43 percent of the advisors as a top challenge this year. Thirty-eight percent said they cannot customize the technology to their specific needs and 34 percent said they do not have enough staff time to fully use their technology.

The survey of 227 RIAs included firms with $25 million to $250 in assets under management. Trust Company of America is an independent custodian with $18 billion in assets under custody.

RIAs cited a wide range of areas where technology can be of help to their firms. The largest number (21 percent) said customer relationship management is the best use of technology, 16 percent said portfolio management, 15 percent financial planning, and 14 percent account aggregation.

“The right technology can not only address the demands of more technology-oriented, do-it-yourself investors, but also can automate more analytical aspects 
of the business, allowing the advisor to focus more time on customer service,” the survey said.

Technology also brings the risk of hacking. Ninety percent of advisors have a plan in place to protect clients’ information, but 10 percent still do not.

In addition to asking about technology, the survey asked advisors about their top challenges for 2018. The largest group of RIAs (33 percent) named attracting new clients as their biggest challenge for the year. Twenty-seven percent said compliance and regulation is their biggest challenge and 23 percent cited scaling their businesses.