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See How Top Independent RIAs Embrace Tech in an Ever-Changing Market

In the first installment of our Betterment Advisor Solutions Survey, we asked 500 growing independent advisors with AUM of $10-$250 million, to tell us how they’re harnessing technology to better serve clients—and to scale.

By Betterment Editors

Published Sep. 12, 2024

See How Top Independent RIAs Embrace Tech in an Ever-Changing Market Sep 12, 2024 8:05:41 AM In the first installment of our Betterment Advisor Solutions Survey, we asked 500 growing independent advisors with AUM of $10-$250 million, to tell us how they’re harnessing technology to better serve clients—and to scale. The big takeaways? The RIA’s tech stack is evolving to better meet their needs, and the adoption of AI is way ahead of schedule. Other trends that surfaced include: The evolution of the Millennial advisor How tech and AI fuels the fastest-growing advisors A rise in retirement planning Keep reading or download the survey now to dig into the top trends, expert analysis, and insights on how to grow your business today. Independent Advisors Leverage Tech Innovations to Thrive Amid Industry Shifts What inspires financial advisors to break out on their own in the first place? While accessing better technology and maximizing earning potential both ranked highly, the primary reasons RIAs chose to go independent was for more freedom and flexibility. This suggests that today’s RIAs value the ability to make their own decisions, customize their investment strategies to suit their clients’ needs, and have more control over business operations without being constrained by a larger firm. Let’s see how they’ve gotten on… Navigating a shifting landscape As you might expect, advisors’ assets under management have grown this year, with more than 40% of them increasing AUM by 10% to 24%. Impressively, 36% of financial advisors experienced growth of 25% or more—with 14% seeing growth of 50% or more! What advisors look for in a custodian The custodial platform is at the core of an RIA’s tech stack. Digital account onboarding, risk analysis, and CRM all rank as at least somewhat important to daily operations. Notably, billing (52%), financial planning software (51%), and performance reporting software (51%) emerged as the top three essential tools, highlighting their critical role in maintaining efficient and effective business operations. All of which underscores the crucial role technology plays for independent RIAs. By offloading some admin tasks and streamlining processes, financial advisors can deliver more value to clients through increased one-on-one time and more personalized advice and financial planning. When asked what would they do with more time, these were the top five responses: 43% investment management and financial planning 43% serving and meeting with current clients 42% professional development 40% meeting with prospective clients 39% marketing my business “Independent advisors have very little time to do anything other than financial planning and communicating with clients. That’s especially troublesome to hear when we know independent advisors are seeking better work-life balance, but they likely have very little time outside of work, not to mention all of the other tasks they may have to take on as an independent advisor like marketing or HR administration.” —Devon Klumb Head of Sales at Betterment Advisor Solutions Financial advisors who are unable to harness the full power of technology and automation may find themselves spending more time on the nitty-gritty details of running a business, instead of focusing on high-value tasks that truly drive growth. The rise of AI Despite numerous hot takes on the takeover of AI, we found that independent advisors are embracing—and integrating—the technology into their business practices. Four out of five advisors surveyed are using AI at their firms today, and of the 20% who aren’t yet, nearly two-thirds say they have plans to integrate AI at their firms in the future. Interestingly, financial advisors who experienced the most growth (25% or more growth in the last year), are also the most likely to be using AI. This shows that advisors understand the benefit of offloading admin tasks in order to devote more time to clients. The biggest deterrent? Poor customer service and training were said to be the main factories preventing advisors from weaving more tech into their practices. “There has been so much discourse around how artificial intelligence could put advisors out of jobs, but we prefer to think that advisors who learn to use AI at their practice will be that much more powerful and future-proofed.” —John Mileham CTO of Betterment Learn more in our latest Betterment Advisor Solutions Survey.

The big takeaways? The RIA’s tech stack is evolving to better meet their needs, and the adoption of AI is way ahead of schedule. Other trends that surfaced include:

The evolution of the Millennial advisor
How tech and AI fuels the fastest-growing advisors
A rise in retirement planning

Keep reading or download the survey now to dig into the top trends, expert analysis, and insights on how to grow your business today.

Independent Advisors Leverage Tech Innovations to Thrive Amid Industry Shifts

What inspires financial advisors to break out on their own in the first place? While accessing better technology and maximizing earning potential both ranked highly, the primary reasons RIAs chose to go independent was for more freedom and flexibility. This suggests that today’s RIAs value the ability to make their own decisions, customize their investment strategies to suit their clients’ needs, and have more control over business operations without being constrained by a larger firm. Let’s see how they’ve gotten on…

Navigating a shifting landscape

As you might expect, advisors’ assets under management have grown this year, with more than 40% of them increasing AUM by 10% to 24%. Impressively, 36% of financial advisors experienced growth of 25% or more—with 14% seeing growth of 50% or more!

What advisors look for in a custodian

The custodial platform is at the core of an RIA’s tech stack. Digital account onboarding, risk analysis, and CRM all rank as at least somewhat important to daily operations. Notably, billing (52%), financial planning software (51%), and performance reporting software (51%) emerged as the top three essential tools, highlighting their critical role in maintaining efficient and effective business operations. All of which underscores the crucial role technology plays for independent RIAs.

By offloading some admin tasks and streamlining processes, financial advisors can deliver more value to clients through increased one-on-one time and more personalized advice and financial planning. When asked what would they do with more time, these were the top five responses:

43% investment management and financial planning
43% serving and meeting with current clients
42% professional development
40% meeting with prospective clients
39% marketing my business

“Independent advisors have very little time to do anything other than financial planning and communicating with clients. That’s especially troublesome to hear when we know independent advisors are seeking better work-life balance, but they likely have very little time outside of work, not to mention all of the other tasks they may have to take on as an independent advisor like marketing or HR administration.”

—Devon Klumb
Head of Sales at Betterment Advisor Solutions

Financial advisors who are unable to harness the full power of technology and automation may find themselves spending more time on the nitty-gritty details of running a business, instead of focusing on high-value tasks that truly drive growth.

The rise of AI

Despite numerous hot takes on the takeover of AI, we found that independent advisors are embracing—and integrating—the technology into their business practices. Four out of five advisors surveyed are using AI at their firms today, and of the 20% who aren’t yet, nearly two-thirds say they have plans to integrate AI at their firms in the future. Interestingly, financial advisors who experienced the most growth (25% or more growth in the last year), are also the most likely to be using AI.

This shows that advisors understand the benefit of offloading admin tasks in order to devote more time to clients. The biggest deterrent? Poor customer service and training were said to be the main factories preventing advisors from weaving more tech into their practices.

“There has been so much discourse around how artificial intelligence could put advisors out of jobs, but we prefer to think that advisors who learn to use AI at their practice will be that much more powerful and future-proofed.”

—John Mileham
CTO of Betterment

Learn more in our latest Betterment Advisor Solutions Survey.