Financial advisor practices that embrace technological upheaval in productivity and efficiency

Consultant practices that more extensively incorporate the use of technology in their practice are growing faster than practices that do not. The Cerulli Report—America’s Wealth Management Technology 2024.

Cerulli’s research found that advisors perceived as heavy users of technology outperform other practices in terms of new client growth rates and assets under management (AUM) growth rates. Almost 30% heavy technology Users have been identified as high-growth practices over the most recent three-year period 9% are light users.

Improved efficiency and productivity are undeniable outcomes of technology use. Cerulli data found that heavy technology users performed better on average than light users across practical productivity measures. These improved metrics include the number of clients served per employee in the practice, the number of clients per productive consultant, the number of clients served per professional staff, and the number of clients per senior consultant.

Instrumental advisors are most likely to improve operational efficiency Electronic signature (65%), CRM (44%)And Video conferencing (29%). These technologies rank among the first, second, and fourth most widely used technologies, respectively, among the most frequently used technologies within consultant practices.

„When used effectively, technology is a valuable growth driver,” he says Michael Ross, director. „However, practices are not necessarily high-tech. Incorporating too much technology into a counselor’s practice can have the opposite desired effect.

According to CerulliChallenges to the effective use of technology that advisors often identify are compliance restrictions that restrict functionality or impose other limitations on advisors’ ability to use them. Technology (73%), Lack of integration between tools/applications (71%) And Not enough time to learn and implement (70%).

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„Advisor practices must employ a technology strategy that closely aligns the types of clients they serve, the specific services they provide, and how they deliver them,” Ross says.

„Understanding how to use the tools available to advisors to have the greatest positive impact on their practice is critical. Educating advisors on best practices and helping them collaborate and learn from their peers can have just as much, if not more, impact than building the next generation of existing tools and technologies.”

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