What are wealth managers’ top business objectives going into 2023? And how do those objectives shape their technology decisions and investments?
The 2022 WealthStack Study from Wealth Management IQ set out to answer those questions – and in the process, uncovered a gold mine of insights into how advisory firms think of and use technology to advance their strategies. SS&C’s Black Diamond Wealth Platform was a sponsor of the study, and Product Manager Shahyan Aly took part in a recent webinar to present the findings.
To answer the first question, the top three business objectives for next year are:
- Improving the client experience
- Adding more clients
- Deepening relationships with existing clients
To that end, advisors are looking for technology to help improve efficiency and productivity, deepen relationships and improve client communications, and provide services aligned with their client’s evolving needs. But, again, notice the recurring theme here: clients. As a result, firms appear to be pivoting from a back-office technology perspective to enhancing client engagement.
The most interesting aspect of the study, however, was the different technology “philosophies” of the study respondents and how that affected their business results.
The researchers asked the responding firms to classify themselves into one of three categories:
- Innovators: Firms who view technology strategically as a way to deliver a differentiated client experience and drive growth; 28% of respondents saw themselves in this category.
- Operators: Firms that invest in technology primarily to improve operating efficiency. A majority (59%) agreed with that philosophy.
- Laggards: Firms that do not prioritize technology and believe they need to use it more effectively. 13% of respondents said that this described their firms.
Interestingly, technology investment levels were fairly consistent across all three groups – suggesting that the value of technology has less to do with how much a firm spends on it than with how a firm chooses and uses it. “Innovator” firms rate technology as significantly more important to their growth, even critical, than firms in the other two categories. Moreover, Innovator firms report significantly higher levels of satisfaction with the return on investment from their current technology stack compared to Operator and Laggard firms.
These findings suggest that firms that embrace new technologies are generally happier with the results they achieve than other firms. Moreover, those that view technology strategically as a means of advancing their business objectives rather than primarily to gain efficiency will be further along on the journey toward a superior client experience.
That tracks closely with our product strategy on the Black Diamond team. We learned from advisors long ago that controlling operational overhead matters, but not as much as generating growth through more robust client engagement. So the enhancements we’ve made to the platform in the past few years are designed to help advisors communicate more effectively with clients, personalize the client experience, and elevate their value in their client’s eyes.
These were a few highlights of the WealthStack study, but there is much more insight to glean from the findings. So if you are rethinking the role technology plays in your business, we suggest watching the full webinar for a deeper dive.