Advisors Who Use More Tech Tend to Outperform: Cerulli

Financial advisors who are considered heavy users of technology tend to outperform other practices in terms of client acquisition and assets under management growth rates, according to recent research from Cerulli Associates.

Some 30% of heavy technology users are those with higher-growth practices over the most recent three-year period, compared with just 9% of light users. In 2023, the most active technology users offered 10.2 services, versus 7.2 services offered by light users.

Heavy technology users average materially better performance than light users across practice productivity metrics, according to Cerulli data. These improved metrics include higher numbers of clients served per staff member across the practice — the number of clients per producing advisor, per professional staffer and per senior advisor.

Sixty-five percent of advisors attribute most operational efficiency improvement to e-signature, 44% to customer relationship management and 29% to video conferencing. Cerulli noted that these three technologies also are among the most frequently used within advisor practices, ranking first, second and fourth, respectively.

“When used effectively, technology is a valuable growth driver,” Michael Rose, Cerulli’s director of wealth management, said in a statement. “However, more tech is not necessarily better for practices. Simply incorporating more technology within an advisor’s practice can have the opposite desired effect.”  

Cerulli found that advisors most frequently cited these challenges to the effective use of technology: 

• Compliance restrictions that limit functionality or impose other limitations: 73%
• Lack of integration between tools/applications: 71%
• Insufficient time to learn and implement: 70%

“Advisor practices should use a technology strategy that closely aligns with the types of clients that they serve, the specific services they offer and how they offer them,” Rose said. 

He said that educating advisors on best practices and enabling them to collaborate and learn from their peers will likely have as much of, if not greater, an effect than introducing the next generation of an existing set of tools and technologies.