As technology continues to transform the financial services industry at breakneck speed, wealth managers are working to not only keep pace, but to move to the front of the pack.
Future-proofing your business requires a concerted effort and a sound tech strategy crafted with an eye on what’s next. Experts say it’s about acknowledging the kind of technology your firm needs and leveraging those tools to craft a digital transformation plan that won’t need to be torn up or redrafted six months later.
“Having a plan is critical. Technology has this way of sneaking up on you in the sense that it's not a problem until you're like, ‘Oh my gosh. I have a problem,’” said Kyle Wiggs, founder ofUX Wealth Partners, an AI-driven turnkey asset management platform for financial advisors. He added that his company recently polled independent advisors to ask if they felt having a chief investment officer or a chief technology officer was more critical in today’s climate.
“Overwhelmingly and by a landslide it was having a chief technology officer, which tells us a lot of things,” Wiggs said. “One, it tells us that (advisors) are less confident in technology than in investments. And I think it also speaks to the importance of technology’s place at the same time … the world is moving so fast. How do you keep up unless you just have endless resources?”
But just having the desire to improve isn’t enough to achieve success, as there are a number of challenges to consider when adding new tools to your stack. Chief among them are integration issues and knowledge limitations among clients or staff.
“There are some legacy firms out there that we work with that still do things like billing by hand and aren't maximizing the efficiency of their firm, so it is vitally important now, more than ever, to be able to get yourself in a situation where you're being proactive about your tech stack,” said Brad Roth, co-founder and chief investment officer ofTHOR Financial Technologies, an AI-driven model portfolio provider with $1.2 billion in assets under advisement. “We've seen this emergence in the fintech space, and there are so many options. So being able to kind of create yourself a network of all these different products and truly understand how they work together and how they're going to work for you is a challenge.
“There is a lot of really great new tech that is a lot leaner, a lot faster, a lot more open source to allow more integration. But if you're not being proactive with some of this stuff and really vetting it, it can be difficult to keep up.”
The formula for developing a technology strategy that both meets your business needs today and stands up to the uncertainties of tomorrow is a tricky one to come up with, and far from one size fits all. Getting it right means advancing innovation, driving business growth and keeping your organization from being left behind.
But what do you stand to lose if you get it wrong?
New research conducted by Arizent, Financial Planning’s parent company, explores the state of digital transformation across various industries in an effort to identify the factors that are critical to developing a future-ready technology strategy. Insight from management level professionals and decision-makers provides a framework to help organizations understand if they are putting the right practices in place and using technology effectively to achieve the best outcomes.
Here are eight takeaways from the research’s findings. The entire reportcan be found here.
THOR supports forward-thinking advisors who believe data and research is essential in providing their clients differentiated and productive investment advice. THOR Financial Technologies, LLC, in the course of its model portfolio business, does not custody assets or trade client assets. When providing model portfolio services, THOR Financial Technologies provides registered investment advisors with suggested asset allocations and model weightings as it relates to ETF’s, Stocks, Mutual Funds, and Bonds. In such cases, it is the third-party investment advisor's sole discretion to act on the information provided.