The rising need for customized solutions represents a major hurdle for those advisors unable to find deliver those solutions more efficiently at scale. “Advisors need help scaling, and they’re looking for better insights and better analytics to help them grow, reduce their reliance on paper processes and provide better client engagement,” says Smith.
Perhaps unsurprisingly given the focus of advisors on risks, the key elements advisors seek in a portfolio management platform are those that streamline and support the management of risk and tax efficiencies. Advisors report that robust proposal and comparison tools, easy tax-efficient trading and strong portfolio alerting and reporting functions are their primary considerations when evaluating customization solutions.
Finding the right technology that checks all of these boxes can be a time-consuming process. And as more financial technology companies enter the field and compete with one another, the choices can become paralyzing for advisors, particularly in an industry that has historically been reluctant to adopt new technology.
The presence of digital investment advice platforms, or robo-advisors, appears to be offering a starting point for many in the industry. Nearly four in 10 advisors (38%) currently use a digital investment advice platform to build and/or manage their client portfolios. For advisors looking to take advantage of these types of platforms, the key is finding the right partners to deploy them seamlessly on both the front and back end of an advisor’s operations.
As digital investment advice platforms mature, their offerings have become more robust. For example, with the right technology partner, advisors can develop portfolios by customizing a set of modular solutions derived from a third party. “With the right framework, you can craft an approach to respond to macroeconomic issues such as inflation risk either automatically or en masse, reducing the time required to adjust a set of custom portfolios from days to hours or even minutes,” says Smith.
It is worth an advisor’s time to find the right solution for their specific situation and needs. Finding the right technology they can trust to fulfill a particular need is essential to their ability to offer clients personalized investment services at scale. Given the general unwillingness to engage with these tools, however, advisors have an opportunity to separate themselves from the rest of the field. Those who make the time to adopt the right technology for them will have a unique value proposition that elevates their client experience above that of their peers, while also providing important growth opportunities.