How Advisors Plan to Use Tech to Boost Growth: Schwab

What You Need to Know

Schwab’s annual independent advisor study shows a big interest in using technology for faster growth.
Data integration is a major goal for many firms, as is studying up on the potential in AI tools.
Cybersecurity is another growing focus and a common area of investment this year.

Independent financial advisors expect technology to remain a driving force behind their industry’s growth in the future, according to Charles Schwab’s 2024 Independent Advisor Outlook Study, with particular interest expressed in the opportunities presented by automation and artificial intelligence.

When asked what they feel is the biggest driver of change in the industry, a plurality of advisors (43%) cited “technology.” The survey responses show they continue to view technology as a critical enabler of their businesses, especially when it comes to creating internal efficiencies.

Even more advisors (87%) agreed that the technology they have embraced has actually allowed them to run their firms more efficiently. Advisors also feel that technology continues to play a key role in how they engage with investors, with 82% saying it is important to how they work with existing clients and 57% saying tech has become more important for attracting new clients.

In addition, roughly two in five advisors (37%) plan to invest even more in technology to enhance the client experience in the year ahead.

“The right technology platform makes the RIA value proposition incredibly personalized and scalable,” wrote Rich Cancro, a report contributor and CEO of AdvisorEngine. “You can deliver your advice to more people without compromising your high standards of client service — if you can overcome your own resistance to change.”

How Tech Boosts Growth

The chief area where advisors are utilizing technology to boost growth is in data integration, according to the survey.

Specifically, advisors are keen to improve how they use client data, with more than half (54%) saying integrating data across platforms is an area where they could use more support. This is followed by creating actionable insights from data, also cited by 54%. One-third (32%) would like more help managing their data internally.

The survey shows firms with assets under management exceeding $500 million are more likely to seek help in all three areas — suggesting that as independent RIAs grow, their data needs grow more complex, too.

“The firms using data most effectively are the ones leveraging it to personalize their advice and service offerings — for example, tracking when clients are eligible for Medicare enrollment and providing resources to help them through the process, or proactively offering financial education resources to clients whose children are headed off to college,” wrote Shannon Eusey, a report contributor and CEO of Beacon Pointe Advisors.

Views on AI Tools for RIAs

Businesses across industries have been watching the evolution of AI solutions over the past few years, and RIAs are no exception. Like many other sectors, however, RIAs are also being mindful and deliberate about whether and how they implement AI at their own firms, according to the report.