Technology is a key enabler for registered investment advisors (RIAs) to fulfill the rapidly evolving demands of wealth management clients for engaging yet simplistic experiences when working with their financial advisors. However, aligning technology initiatives with an RIA firm's core value proposition and strategic goals is essential before diving into technology details.
- Articulate your value proposition
Start by clarifying the value you aim to deliver as a wealth management firm. Understand your unique selling points and the specific client experiences you want to offer to the different client profiles you strive to serve. Define and clearly articulate the value you are providing to clients, which will also attract prospective clients to your firm. Communicate the value proposition to everyone within your firm so that everyone internally understands and buys into the “why” of the firm's existence and each person's instrumental role. This foundational step of defining the value proposition lays the groundwork for all subsequent decisions. The value proposition should be revisited and refined periodically.
-
Establish roles and responsibilities
Clearly define roles and responsibilities within the firm to ensure accountability and alignment with your firm's objectives and value proposition delivery. Think about each role at the firm with intentionality. Define each role's output and deliverables as a function of the firm's overall value proposition and establish success criteria to measure the output's effectiveness and impact. Based on each person’s role, identify where they should be spending their time to operate at the top of their license. Identify tasks that people are spending time on where the opportunity cost of time spent is high and preventing people from delivering the utmost value and throughput. Explore options to eliminate and streamline tasks that waste time or don’t add value. -
Define experiences, processes, and workflows
Consider each client profile's target experience for working with your firm. For example, define how an investment management client works with the firm, how a financial planning client works with the firm, how a goals-based client works with the firm, and so on. Then, lean into the roles and responsibilities that have been defined and think through the experience you need to create internally for your advisors, client service teams, and operations teams to deliver those client experiences efficiently. Map out the processes and workflows to deliver every step of the identified experiences. Periodically solicit feedback from clients and internal stakeholders to gauge how processes and workflows can be improved. Review, streamline, and optimize these processes to enhance efficiency and effectiveness in client service delivery in a scalable and repeatable way. Ensure that processes have checks and balances, reviews and approvals, and quality control measures to maintain high quality of execution and integration of each process and workflow.
-
Implement a data management strategy
A comprehensive data management strategy is foundational to delivering compelling client experiences. It involves identifying the comprehensive data set required to make the best decisions as a fiduciary when serving clients. It also involves having full confidence in the quality of the data. An effective data management strategy enables users to utilize the data without further manipulation, massaging, or questioning its accuracy. Accomplishing this involves determining data sources and establishing seamless flows across systems and teams to minimize redundancy and manual entry. Robust data integrity management practices, including running regular audits and reconciliations, should be employed to maintain data accuracy and security. Furthermore, leveraging technology and fully aggregated data facilitates delivering “personalization at scale”, identifying deeper insights into client needs and preferences, enabling the firm to deliver more personalized and value-added services. -
Assess current infrastructure
While it would be ideal to have unlimited resources and a “white canvas” to implement technology, the reality for most RIA firms is that they have made existing technological investments and already have operational systems. Therefore, there's a need for a meticulous evaluation of the current technology infrastructure vis-à-vis the firm's objectives. Identifying core components of the tech stack that are indispensable and functioning effectively within the existing setup is imperative.
Once the core of the tech stack has been established, direct attention should be paid to auxiliary platforms that underperform or fail to integrate seamlessly with the core systems. Objectively documenting issues with these platforms and outlining the desired functionalities are crucial steps. These requirements then serve as guiding principles in the decision-making process regarding optimizing the infrastructure. Based on this objective assessment, decide whether to upgrade or replace the identified applications.
Develop a business case to justify the investment, considering ROI, scalability, and alignment with your long-term strategic goals. The strategy should prioritize addressing one platform at a time to ensure thorough attention and quality execution in one area and remove too many variables before moving on to the next. This phased approach ensures focused efforts and enhances the likelihood of successful integration and operation of the new technology within the firm's ecosystem. - Training and adoption
Implementing comprehensive training programs is essential for equipping your team with the skills and knowledge necessary to effectively utilize new technology tools and systems. By investing in training, you empower your employees to leverage these tools efficiently, enhancing productivity and driving innovation.
Additionally, establishing routines for receiving and implementing enhancement requests ensures that your technology evolves in line with your organization's needs, fostering continuous improvement.
Identifying superusers within your team is crucial for promoting optimal technology usage. These individuals can serve as advocates, mentors, and resources for their peers, driving adoption and maximizing the benefits of the technology investment. Moreover, establishing governance frameworks ensures that the technology is used following best practices and organizational policies, mitigating risks and ensuring compliance.
Regular collaboration with technology vendors is also essential to validate that the technology is effectively utilized. This includes confirming adherence to best practices and addressing any unintended customizations that may deviate from optimal usage. By maintaining an ongoing dialogue with vendors, you can leverage their expertise to optimize your technology ecosystem and effectively achieve your business objectives.
By following these steps, RIAs can strategically navigate the complexities of technology infrastructure, aligning their systems and processes with their firm's objectives to deliver exceptional client experiences and drive sustainable growth.
Interested in reading the US WealthTech Landscape Report 2024? You can read the report online here.
ABOUT THE US WEALTH LANDSCAPE REPORT 2024
The US WealthTech Landscape Report 2024 has been designed to showcase the pivotal role that technology plays in the evolving landscape of US wealth management.
With the rapid pace of change in financial services, understanding technology's impact on this sector is more crucial than ever. This US-focused Landscape Report features a series of insightful articles that explore the trends, challenges, and innovations surrounding technology adoption in wealth management. Contributions come from a range of organizations, including Advisor360, Alpha Tech Partners, Aureus Advantage, Croesus, Diamond Wealth, ERI, First Rate, J.P. Morgan Wealth Management, Malka Media, Pirker Partners, Seismic, and Transcend Capital Advisors.
The report also features a section dedicated to a series of solution provider showcases, offering insights into the offerings and capabilities of the firms featured. This section is designed to provide an overview of a selection of solutions available on the market today, showcasing some of the available technology tools and partners that might address your business needs. Finally, we culminate the report with the directory section that introduces our online Solution Provider Directory (SPD) and references the size of market relevant to the US wealth management sector.
Interested in reading the US WealthTech Landscape Report 2024? You can read the report online here.
ABOUT THE WTLR SERIES
Our goal with our WealthTech Landscape Reports (WTLRs), is to collate relevant, insightful content and comments from both wealth managers and vendors operating in a specific region. Each WTLR is founded on a curated directory of hundreds of relevant technology and related solution providers to the business needs of the wealth management community in focus. The directory is supported by a rich variety of thought leadership articles and interviews with industry participants from both buy and sell side, plus a section of Solution Showcases. We also look at country, regional, and sectoral trends.
If you are interested in contributing to our WealthTech Landscape Report series, don't hesitate to get in touch.
Discover our latest reports!
