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23 August 2021

The Paradox of Choice When it Comes to Advisor Technology

In his famous book, The Paradox of Choice, noted psychologist Barry Schwarz writes about the conundrum facing many of us when it comes to making decisions. This seminal book analyzes the psychology surrounding the decision-making process when there are too many choices which, paradoxically, becomes a problem instead of a solution. Schwarz suggests eliminating choices can greatly reduce anxiety for consumers.

With today’s technology innovations, there are many specialized options and opportunities to meet any combination of needs, that it becomes virtually impossible for firms to research them all. When combined with a fear of missing out, the decision-making process can easily become overwhelming. In the advisor space in particular, where the industry itself is becoming more and more nuanced, specialized solutions and purpose-built functionality may not apply to all market segments. In fact, according to advisor, consultant, and blogger Michael Kitces, there are now more than 300 separate wealth management advisor technology applications—an astronomical growth rate for what was once just a tiny sliver in the technology universe1.

How then, do advisory firms –particularly those with unique needs such as broker-dealers, family offices, and breakaway firms – make sense of all of the choices in order to select the right technology to move their business forward? Our whitepaper, The Universal Wealth Management Platform: How One Operating Model Serves Multiple Wealth Segments, explores the concept of a universal wealth platform and illustrates how it can apply to different types of wealth firms. According to the paper:

A universal platform can quickly and easily be configured to support the needs of different types of wealth firms and business models. Such a system will have the core functionality every wealth business needs, such as reporting, client portals, mobile apps, and data feeds from leading custodians and clearing firms. Importantly, it also offers direct integration capabilities, in collaboration with specialized solution providers, to provide a seamless, customized experience for both advisors and clients across different business models. Operational right out of the box, a universal wealth platform can get firms up and running quickly, easily scaling and customizing features for different business models.

There are many benefits to starting with a strong foundation and then bringing in best-in-breed integrations. Most notably, it solves that sticky problem of where to start and will alleviate any anxiety from not being able to conduct due diligence on over 300 different wealth tech applications. While doing so, firms are also able to improve the client experience, grow efficiently, lower costs, gain scale and productivity while reducing risk. To fully understand how a universal wealth platform can serve as the foundation of an advisory technology stack, download the complete whitepaper today.

Regardless of your size or structure, the Black Diamond® Wealth Platform has the flexibility, infrastructure, and power to support your unique wealth management business. Learn more by requesting your personal demo.

1.  Kitces, Michael, “The Latest In Financial #AdvisorTech,” May 3, 2021.