Wealthtech provider Orion shared the results of both its third annual Advisor Wealthtech Survey and an inaugural survey of 1,000 investors during its annual Ascent conference in Orlando this week.
It was the investor survey that held what I thought were the most interesting and, for advisors, most potentially impactful findings.
Big Inheritance Equals Greater Chance Your Client Drops You
First, we find that of the many reasons respondents were provided as choices for possibly dumping their current advisor, the most common was “receiving an inheritance of more than $1 million,” in which 24% of respondents were very to extremely likely to switch. If you throw in those selecting “somewhat likely,” that percentage grew to 47%.
While we are not provided any underlying explanation for the response—it was just a survey—the finding that almost one in four advised clients out of 1,000 would be very to extremely likely to change advisors is a finding worthy of more study.
I do have to temper my intrigue at the finding above by keeping in mind that while there were 1,000 participants in the survey, 700 of those respondents were non-high-net-worth investors with less than $1 million in investable assets. Only 300 were HNW with $1 million or more to invest, but 57% of all participants had been with their advisors for five years or more.
I interviewed Orion CEO Natalie Wolfsen prior to the conference and discussed some of the results.
“This is really driven by tax as well as other things. If you’re ultra-high net worth or high net worth, regardless of how close you are to wealth transfer, there was a lot of concern that with a potential non-change of administration or hope with the change of administration that inheritance tax laws might be extended might not be,” she said.
“So, folks we're doing a lot of longer-term estate planning going into this election cycle,” said Wolfsen.
The percentage shrank to 18% for those who would be very or extremely likely to switch advisors if the inheritance was only between $500,000 and $1 million (and shrank to 40% if we lumped in those also selecting somewhat likely). It fell again to 10% (likely to extremely likely to change) if the inheritance was less than $500,000.
Perhaps while most investors with an advisor trust their advisor to manage their portfolios as caretakers, they might not trust them or feel they know them quite well enough to handle a windfall of more than $1 million.
It does seem strange, though, given that the survey found that 95% of investors were somewhat (32%) or very satisfied (63%) with their advisors overall. However, when segmented by generation, we find that 70% of baby boomers are very satisfied with their advisors, while only 55% of millennials can say the same.
Healthcare Planning Needed
Something else I was looking for but had to delve a bit more deeply to find was how investors felt about healthcare planning. It turns out that 38% of HNW investors wanted this service but lacked it from their current financial advisor. This makes sense given that 34% of the respondents are already retired and likely have health concerns more top of mind than those who are younger and working.
I’ve contended for years that holistic financial planning is incomplete without health planning (guidance on health insurance, long-term care insurance, contingency planning for the lack of it, etc.) and that there should be technology to support it that is fully integrated with financial planning applications. Caribou and its HealthPlanner software, which was recently acquired by Move Health, are a prime example of this technology.
Another service on this chart is titled “Retirement planning and asset decumulation,” which I find an unfortunate title. This is a service 60% of advisors claim to offer, yet 23% of investor respondents selected it as a service they wished their advisor did provide. Use of “retirement planning” rather than retirement income planning is unfortunate because it is too general; most financial plans are inclusive of planning for retirement, but what they often lack is retirement income planning, which I think the survey creators assume is covered by the phrase “and asset decumulation.”
All too often, I find that advisors, with kudos from the insurance and annuity industry, lump products from the latter as the core aspect or component of retirement income, and it is often tools and calculators that advisors rely on to make calculations for those clients in or near retirement. Meanwhile, over the years, a class of third-party software has emerged that helps advisors perform holistic, decumulation phase planning for this group of clients.
Applications or platforms that include IncomeConductor, IncomeDiscovery, IncomeLab and a few others are examples of these tools. I would like to see them better tracked or included in similar surveys. The 2024 T3 Inside Information Software Survey showed that total market penetration of this category (which labels these tools as retirement distribution planning tools) grew from 10% in 2021 to a little over 15% of advisors using them in 2024. I’m hopeful that this pace will pick up if not by choice among advisors, then out of necessity as 11,400 Americans will reach age 65 every day in 2025 or 4.18 million in total for the year, according to Alliance for Lifetime Income research announced in January.
Orion’s Wealthtech Survey of Advisors
I found the advisor wealthtech survey less interesting. Many things were similar year-over-year. For example, the biggest gripe among advisors about their tech stacks remains the lack of integration, referred to as “disconnected solutions;” 24% of advisors selected this as their top technology pain point versus 25% last year.
Two things did catch my eye as I looked closely at the results.
First, was that 43% of advisors planned to increase their investment in AI-powered tools in 2025 versus 24% who planned to spend the same as last year. At first glance, it was interesting to find that 68% of advisors reported using some type of AI technology. This, however, covers too much ground and could include everything from free generative AI from OpenAI or Google for basic web research to a portfolio analytics package. We have reached the point where all our surveys on AI usage need to be more granular and start exploring the specific types of tools or products advisors are using.
The second finding that interested me was that 27% of advisors plan to increase their spending on lead generation and sales enablement tools. My hope is that this spending goes toward the newer class of innovative, AI-powered, more client—and advisor-personalized products that would include providers like Aidentified, Catchlight, Datalign Advisory, FINNY AI, and others.
In the latest advisor report, 585 advisors were surveyed in December; 285 respondents came from Orion’s internal databases, while 300 were selected from an independent third-party sample.
