Advisors who are adept at using technology have more assets under management and make more money than advisors who are indifferent to technology, according to Fidelity.
A new report released Tuesday on what Fidelity Clearing & Custody Solutions calls eAdvisors shows they have advantages in almost all areas of their practices over advisors who are not dedicated to the use of technology.
The Fidelity 2016 eAdvisor study, “Setting the Pace: How eAdvisors Elevate the Client Journey and Outperform Peers,” says the number of advisors seriously dedicated to using technology increased to 40 percent from 30 percent since 2014.
On average, eAdvisors are using twice as many different technologies as their peers, and they are also using these technologies more extensively within their businesses. The result is tech savvy advisors have 42 percent higher assets under management than those who have not totally adopted technology and have 32 percent more assets under management per client.
They also have more clients with $1 million or more in assets, 24 percent higher compensation and a higher satisfaction with their firm and career than others.
What’s more, the study shows that eAdvisors are running their businesses in smart, strategic ways and thinking about the future, says Fidelity. More than half (54 percent) have client segmentation strategies, versus 40 percent of other advisors. They also are more likely to be planning for the future by serving more Gen X and Gen Y clients.
“Advisors who embrace technology are going to be the ones who scale, grow and ultimately win,” says Tricia Haskins, vice president, practice management and consulting, Fidelity Clearing & Custody Solutions. “While there’s still a lag in adoption, it’s less about the lack of appetite for technology, and more about not knowing where to begin.”
Fidelity has identified things advisors, who are not using technology as well as they should, can do. They should create a strong online presence to generate leads and engage with prospects and clients. For instance, more than half (54 percent) of eAdvisors use Google Analytics to track website traffic, versus only 28 percent of tech-indifferent advisors, allowing them to measure website efficacy and adjust as needed, Fidelity says.
Advisors who want to enhance their tech use should think in terms of using it to make a client’s experience simpler, not more complicated. It also should be used to create a holistic view of a client’s life and finances.
They also should use technology to communicate and collaborate with clients to maintain and deepen the relationships. Technology can make clients feel more involved in decision making, Fidelity says.