Do you have plans to investigate or purchase new technology and software? If you have a technology plan (and you should!), you can take advantage of the existing research to help guide you and reduce the number of vendors that you need to assess. I want to share two of my favorites.

Their research offers advisors actionable insights, giving you a sense of how other advisors use the technology, as well as if the software is wowing other advisors or coming up short. They are well worth an hour of your time.

The 2019 InvestmentNews Adviser Technology Study

The 2019 InvestmentNews Adviser Technology Study can be downloaded for a charge. Here are the insights I found most interesting.

monitor with magnifying glassClient experience drives technology decisions. The buzz-phrase “client experience” is everywhere. There are conferences devoted to it, it is in TV adverts and software is designed around it. The study cited that client experience was the top consideration for 72% of firms when deciding to invest in technology, compared to 65% the previous year. In general, this shows that the industry has switched from focusing on client profitability as the key driver of technology choice.

Risk is being used as a tool for client engagement. The usage of risk analytic tools jumped in 2018 from 34% of firms to 46%. There are a couple of reasons for this. Firstly, the great success that Riskalyze has had in the market. They have changed the model from recording the investor risk score as a compliance chore to a way of engaging a prospect or client in a collaborative conversation of their finances. Secondly, the firming of the regulatory landscape, first through the now-defunct DOL rule and now to SEC’s Reg BI.

Account aggregation. Unfortunately, although there is some debate about this, the reliability of account aggregation has not improved much over the years. However, for financial planning advisors, it is a must have – being able to see the net worth of your client is so important for planning. Last year, the adoption rate for firms that use account aggregation moved from 53% to 68% – a significant jump.

2019 Software Survey – Joel Bruckenstein / Bob Veres

Every year at the T3 Advisor Conference, Joel Bruckenstein and Bob Veres release their  software survey. It is always one of the highlights of the conference.

They have updated the standard study format with a couple of interesting twists. Firstly, they focus on not only the market share of a specific firm, but also on the average satisfaction rating among software users. This is interesting, as it often identifies the upcoming and fading firms better than their market share percentage. Secondly, they identify software that advisors are thinking about adding. This again gives another indication of what software is trending upwards. This study can be found in its entirety on the T3 website. Here are the specific findings I found interesting.

The mature financial planning software sector: In mature market sectors, you tend to find firms with large market share that have won in the competitive landscape. There are then a whole lot of smaller companies trying to come up with disruptive models. Financial planning technology is clearly at this point. MoneyGuidePro® has 26% of the market and eMoney has 23%. No one else has more than 5% of the market. The twist here is that this year, Envestnet® acquired MoneyGuidePro® (eMoney was acquired by Fidelity in 2015). Add to this Orion acquiring Advizr this year and you’ll see there are now very few truly independent financial planning technology firms left. The effect on the companies that have been acquired varies, depending on the strategy of the acquiring firms. It is likely that Advizr will be integrated into Orion’s technology quickly, MoneyGuidePro® into Envestnet® over the long term and eMoney into Fidelity somewhere in the middle.

The mature CRM sector: The CRM sector is even more evolved than the financial planning technology sector. Redtail is represented as having 57% market share! The Redtail satisfaction rating is also one of the highest of the sector. The only blip on Redtail’s horizon is that more firms are thinking about adding Salesforce (this is mainly for the larger RIAs).

The immature Digital Marketing Tools sector: This is a new category in this year’s study. As advisors turn to technology to help with their key tasks, it would appear obvious that marketing would be important. Most advisors are not natural marketers, and technology can help keep them organized and on task. FMG Suite has made big and swift inroads with an 11% market share. This is fast growth in an immature market.

In conclusion, good technology studies are useful to advisors if they are read either as enjoyable bedtime reading for background purposes or as part of a yearly technology plan where the advisor wants to take action. It is worth finding these two studies.

The firms and individuals mentioned are not affiliated with SEI or its subsidiaries. There is no guarantee risk management will be successful.

An online survey was conducted with 272 independent financial advisory firms by InvestmentNews Research, between January 10th and March 1st, 2019.


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