The right technology can make a big difference for an RIA practice — allowing financial advisors to compete with large wirehouses and address increasingly complex client needs. According to a recent study commissioned by Million Dollar Round Table (MDRT), 95% of respondents believe it’s important that advisors are both technologically savvy and use updated technology-based tools in their practices.

The conversation around RIA-focused technology often centers on automation, but it’s really all about building scale, not just automating existing processes. That’s why it’s important to understand what you’re trying to accomplish with a technology platform before you decide to implement it.

The Importance of In-House Advocacy 

Regardless of which platform you choose, it helps to have an in-house champion — someone on your staff who understands the ins and outs of technology and is dedicated to its success.

In addition, RIA leadership must provide a firm commitment to implementing technology and providing sufficient resources. We’ve seen numerous deployments stumble due to resource constraints. That’s unfortunate because there are so many things you can do with today’s technology with the appropriate support and resources.

Here are three areas where RIAs can incorporate technology to improve their practice.

1. Model-based Management 

One of the most compelling features of today’s advanced RIA technology is model management. Managing assets at the model level builds scale by affecting multiple accounts with a single transaction.

For example, let’s say you need to reallocate assets within a portfolio. Traditionally, you might have executed individual trades within each client’s account. Using model-based management, you can simply adjust the position at the model level with a few clicks. That, in turn, affects the positions of each client holding that portfolio.

2. Account Aggregation

Account aggregation is another feature of today’s RIA technology. The need is clear: Studies have shown that up to half of the wealth held by advisors’ clients isn’t represented in the advisor’s book. That’s not only a lost opportunity for the advisor, but it also clouds the client’s financial picture — making true financial planning a challenge.

Account aggregation provides a compelling solution by allowing clients to keep all of their financial information in one place. For advisors, it means a more complete understanding of a client’s situation, which can lead to more meaningful conversations and improved service.

3. Artificial Intelligence

In recent years, large technology firms have invested billions of dollars in artificial intelligence, although this field is often misunderstood. Artificial intelligence doesn’t replace the role of an advisor, but instead allows advisors to make sense of complex scenarios.

Using artificial intelligence — or “augmented intelligence,” as we call it — an advisor can incorporate millions of variables to produce outcomes precisely tailored to a client’s financial needs.  The industry is in very early days on this front, but the technology is growing rapidly.

Time to Upgrade?

So, how do you know when it’s time to make a technology upgrade? Often the implementation decision is based on an advisor’s pain points. Whether that’s an inefficient workflow or time-consuming legacy practices, it’s important to address pain points across all levels of the organization. If an RIA has reps in the field, each one of them has a different set of issues and requirements — and a potentially unique use case for technology.

We also advise consistent communication with clients and employees on what you’re trying to accomplish with the technology — engaging as many constituents as possible. Having open communication right out of the gate can go a long way toward increasing adoption rates.

These are exciting times in the world of RIA-focused financial technology. Selecting technology that fits your specific needs can make your business more efficient while better meeting the needs of your clients.


James Capps, Senior Vice President, Institutional Technology, joined E*TRADE Advisor Services (f.k.a. TCA) in 2014 and now serves as Senior Vice President of Institutional Technology for E*TRADE, responsible for the technical vision, development, and operation of the firm’s institutional network architecture and technology platforms.