Technology has made as big a difference for registered investment advisers (RIAs), as it has for other types of financial adviser, enabling them to scale up and provide a much more sophisticated approach to their clients’ financial needs.
It is well known that regardless of the type of business, using software to automate processes improves productivity and has a positive effect on the bottom line; however, software for IFAs (independent financial advisers) and RIAs is about more than just automation, which is why it is important to identify your goals when choosing a technology solution. Three of the areas in which advisers can benefit from technology – model-based management, account aggregation and artificial intelligence – are explained below.
This concept enables RIAs to manage their clients’ assets at a model level. Where multiple trades would traditionally need to be executed to reallocate assets – one for each client – model-based management means that just a few clicks will adjust the positions of all clients who hold the portfolio at once.
Having a complete understanding of a client’s financial position is essential to providing useful financial advice, especially when planning for life events such as retirement. IFA software offering a solution that enables advisers to see the complete picture, including wealth that is not on their books, enables advisers to provide a better service tailored to their client’s situation.
AI is an area that has had a mixed response from many sectors, not least because of the misunderstanding and fear that it could replace roles traditionally held by humans. One such example is robo advice. As described by Deloitte, the latest versions of robo advisers have evolved to feature self-learning investment algorithms that take information from detailed profiling questionnaires and changing market decisions to identify the most appropriate asset mix for customers.
In reality, robo advice has found its own niche in the investment market and advisers have learned to incorporate the technology to improve their service. For RIAs, artificial intelligence means that a much greater number of variables can be incorporated into helping them create outcomes that most accurately match their clients’ requirements.
These are just some of the benefits technology can bring to advisers and their clients, and it is important to select the one that best fits the needs of both.