Tech-Savvy Firms Add Clients, Grow Assets Faster: Fidelity

Wealth management firms that embrace technology best practices report higher than average efficiency, stronger growth, better client experiences and higher advisor satisfaction, according to research released Monday by Fidelity Investments.

These digitally empowered firms apply technology best practices across three domains: strategy, design and activation. They are growing their client base and assets under management much faster than their peers — 20% versus 8% and 22% versus 11%.

Moreover, the research found digitally empowered firms of all sizes and from various channels, signaling an equal opportunity to gain a competitive edge with a more dedicated focus on technology.

“Our study underscores the impact of technology as a growth driver for wealth management firms that harness its full potential,” Marissa Herr, head of technology consulting for Fidelity Institutional, said in a statement.

“Those who think deliberately about the platforms, integrations, and tools that best support the needs of their advisors and clients today have a huge opportunity to create market differentiation.”

A nonaffiliated polling firm fielded an online survey, in which Fidelity was not identified, in November among 426 advisors — including some firm leaders, partners and other technology decision-makers — who work with individual and/or small-business investors and are licensed and credentialed. 

Best Practices in Action

The survey found that 42% of digitally empowered advisory firms have a firmwide technology strategy, compared with 22% of peer firms, and 89% have a distinct process for evaluating solutions, versus 36%. 

Employees of these firms are also more likely to capitalize on the efficiencies offered through technology, and advisors are nearly twice as likely to say that their most valuable day-to-day platforms are well-integrated.