Welcome to the January 2022 issue of the Latest News in Financial #AdvisorTech – where we look at the big news, announcements, and underlying trends and developments that are emerging in the world of technology solutions for financial advisors!
In this month’s edition, we look back at the four major trends underway in the financial advisor ecosystem that shaped the big AdvisorTech events that occurred in 2021, and what the trends portend for the year(s) to come.
The first driving trend is the ongoing shift of the financial advisor value proposition itself – from the sale of financial services products, to the sale of financial advice itself – which in turn is slowly but steadily reshaping the entire advisor technology stack. Starting with a growing pressure on financial planning software to go deeper – not simpler – and an expansion of various ‘advice-support’ and plan monitoring tools that augment planning software. Which is leading advisor CRM systems to increasingly become the hub, as new startup planning tools build first to CRM systems (not brokerage platforms or portfolio management tools). And an expansion of tools to support more advice models beyond ‘just’ the traditional AUM model (from Assets Under Advisement [AUA] to subscription and retainer models).
The second trend reshaping advisor technology is the growing focus on back-office automation, as it becomes increasingly clear that “robo-advisors” were never a threat to real financial advisors… but the efficiencies they bring are highly relevant to enhancing the productivity of human advisory firms! Which is driving a new wave of investments into both business process automation systems, and more generally anything that can improve the expediency of back-office workflows (from ‘simple’ client note-taking to more complex multi-system workflows), along with greater automation of compliance technology (“RegTech”) in particular. And the need for more integration across platforms – to achieve those efficiencies – is spawning a new wave of solutions that make it possible for advisors to either begin to warehouse their own data (to facilitate their own integrations), or be able to accomplish everything in a single “all-in-one” system that houses all the data and provides all the necessary services (so advisors can just focus on the business itself!).
In next week’s continuation of our 2022 recap, we’ll look at the remaining two AdvisorTech trends – the hunger for (re-)igniting organic growth as advisory firms scale, and how evolving investment trends (given high market valuations and low bond yields) are fueling some of the biggest opportunities in AdvisorTech (as advisors historically will pay even more for solutions that help to create revenue!).
In the meantime, be certain to read to the end, where we have provided an update to our popular “Financial AdvisorTech Solutions Map” as well!
*And for #AdvisorTech companies who want to submit their tech announcements for consideration in future issues, please submit to TechNews@kitces.com!
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