Tech-savvy “eAdvisors” are outperforming their peers across several metrics, leading to key distinctions between those who utilize technology to their advantage and those who don’t — including attracting more high-net-worth clients and earning higher compensation, according to a new study.
Fidelity’s 2016 eAdvisor survey shows that the number of advisors using technology solutions increased to 40% in 2016, up 10 percentage points since the last survey in 2014. While these number suggest there is still a ways to go in terms of overall market penetration, consider that advisors who use a broader range of technologies than their tech-indifferent peers had:
- 42% higher assets under management (AUM), up from 40% in 2014;
- 35% more AUM per client, up from a 14% gap in 2014;
- more high-value clients ($1 million+);
- 24% higher compensation ($306K versus $248K); and
- greater satisfaction with their firm and career.
In addition, the study suggests that tech-savvy advisors are running their businesses in “smart, strategic ways,” with more than 50% having client segmentation strategies, versus 40% of low-tech advisors, leading to “enhanced productivity and asset/revenue growth.” In looking to the future, tech-savvy advisors are also serving more Gen X and Gen Y clients, and are preparing to implement digital advice within the next two years to enhance their services.
Fidelity identifies four best practices that tech-savvy advisors utilize for maximum impact:
- embracing a strong online presence to generate leads and engage with prospects and clients;
- using technology to both simplify and enhance the client experience;
- taking advantage of technology solutions to create a holistic view of clients’ lives; and
- communicating and collaborating via technology to maintain and deepen client relationships.
The study emphasizes that tech-savvy advisors capitalize on their online presence and are almost twice as likely to have a clear call to action on their websites compared to other advisors. In addition, advisors who incorporate online, paperless tools are more likely to be recommended by investors, who find such services time-saving and convenient. Fidelity research shows that e-signature options are offered to clients by two-thirds of tech-savvy advisors, and nearly all (94%) provide electronic delivery of statements and reports, along with online access to such documents.
Another important distinction is that by a significant margin, tech-savvy advisors appear to be using data aggregation tools to their advantage, with 87% of them using the tools, compared to 46% of low-tech advisors – an increase of 18% from Fidelity’s 2014 study.
