Fidelity Report: Advisors Who Embrace Tech Are Being Rewarded

Tech-Savvy Wealth Management Firms Are Seeing Stronger Growth, Better Client Experience And Higher Advisor Satisfaction, Fidelity Says.
Marissa Herr, Head of Technology Consulting, Fidelity Institutional, and Jessica Liberi, Head of Platform Technology
Marissa Herr, Head of Technology Consulting, Fidelity Institutional, and Jessica Liberi, Head of Platform Technology
Jeff Berman, Contributing Editor & Reporter, Wealth Solutions Report
Jeff Berman, Contributing Editor & Reporter, Wealth Solutions Report

Advisory firms that embrace technology best practices are seeing stronger efficiency and growth, better client experiences and higher advisor satisfaction than their peers, according to the findings of a new study from Fidelity Investments released Monday.

Digitally empowered firms are three times more likely to use technology to differentiate the experience they offer clients, and this is paying off for advisors and investors, Fidelity said.

Fidelity identifies a digitally empowered firm based on its application of technology best practices across three areas: strategy, design and activation.

Such advisory firms are growing significantly faster than their peers, in terms of clients and AUM, according to Fidelity.

Such advisory firms are growing significantly faster than their peers, in terms of clients and AUM, according to Fidelity.

Advisors also tend to be more satisfied with their careers while working for a digitally empowered firm, and report higher compensation and an ability to provide a better client experience, according to Fidelity’s findings.

Fidelity’s research also found that digitally empowered firms of all sizes and from various channels – including RIAs, wirehouses, independent and regional broker-dealers – are “signaling an equal opportunity for all leaders to gain a competitive edge with a more dedicated focus on technology,” the company said.

“Tech-forward” advisors are more likely to report that their processes are efficient across several key functions, and also say their clients share the same perception, according to the firm.

By saving time when it comes to money movement, trading and portfolio rebalancing, account maintenance, customer onboarding and financial planning, “digitally empowered advisors can focus on deepening client relationships and growing their business,” Fidelity said.

“Our study underscores the impact of technology as a growth driver for wealth management firms that harness its full potential,” according to Marissa Herr, Head of Technology Consulting at Fidelity Institutional.

“Those who think deliberately about the platforms, integrations, and tools that best support the needs of their advisors and clients today have a huge opportunity to create market differentiation,” she said.

Digitally empowered firms are also more likely to have a firm-wide tech strategy and a distinct process for evaluating solutions, according to Fidelity.

Employees who work for these firms are also more likely to “capitalize on the efficiencies offered through technology,” including automated workflows, Fidelity said.

These advisors are almost twice as likely to say their most valuable day-to-day platforms are well-integrated, according to the findings.

But the advisors’ work doesn’t end there, Fidelity said.

“Firms spend significant time evaluating and introducing new technology, but it’s just one part of the equation,” according to Jessica Liberi, Head of Platform Technology at Fidelity Institutional.

“Activation is equally important,” she said. “A firm can only reach the full potential of its technology stack if advisors know how to implement the tools strategically selected to support them.”

Fidelity’s 2023 Financial Advisor Community – Technology Stack Survey was conducted as an online blind survey, with Fidelity not identified, and was conducted Nov. 9 to 24. An independent firm not affiliated with Fidelity Investments conducted the study.

Participants included 426 advisors, including some firm leaders, partners and other technology decision makers who work with individual and/or small business investors and are licensed and credentialed, Fidelity said.

Jeff Berman, Contributing Editor & Reporter at Wealth Solutions Report, can be reached at jberman@wealthsolutionsreport.com.

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