Advisors understand the importance and effectiveness of technology and are planning to increase the use of it at their practices in the coming year, according to new research published by Orion.

More than 500 financial advisors participated in an online questionnaire as part of Orion’s second annual “Wealthtech Survey.” Of those who participated, 52% said they plan to invest in more client-facing technology in the coming year. Only 10% said they have all the tech they need.

Even though advisors want to use more of it, they are likely not properly using what they already have, the study suggested, as only about half said they have successfully integrated technology at their firms.

That number is still too low for Brian McLaughlin, president of Orion Advisor Technology, who said the reason is that an advisor’s full understanding of how to properly use tech in their day-to-day operations may not be sufficient.

“You see new technology and you add it into the stack, but you don’t actually apply the discipline to understand how that would fit in with the rest of the tools you use,” he said.

AI is also affecting the industry and financial advisors. About 38% of those surveyed said AI and machine learning will be the most disruptive influences on the wealth management industry. Only 23% said that in last year’s survey.

Given the impact many see AI having, advisors are becoming less reluctant about incorporating it into their workflows; 30% said they would incorporate it within the next couple of years, which is up significantly from the 18% in last year’s survey, the firm said.

“That’s a pretty big jump for such a bleeding edge technology that has had positive and negative press in general,” McLaughlin said.

Financial advisors are still apprehensive about the role AI will play in their lives and how reliant clients might become on it, even when compared with advisors themselves, McLaughlin explained. However, advisors should embrace the technology and learn to use it to effectively interact with their clients.

“AI is going to mature over the next few years, and as it matures, it will be much better to have a deeper understanding than your peers if you can,” he said. “You can only do that by learning it early.”

Advisors are also looking to increase the time they spend in front of clients. To accomplish that goal, many have turned to outsourcing. Based on the respondents’ answers, they expect to increase their outsourcing expenditures by 4% this year. 

For the past year, the two areas where most advisors used outsourcing were in compliance and regulatory reporting, along with portfolio accounting, each cited by 46% of respondents. Meanwhile, 38% said they outsource their investment management, 36% outsource their trade execution, and 34% outsource their client reporting and communication.