WEALTHTECH INSIDER: 3 Reasons Why Digital Banking is Taking Off in the RIA World


Advances in technology and industry consolidation are blurring the once-tidy lines between different players in the financial services world. Broker-dealers moving beyond commission-based service adopt tech and business models pioneered by RIAs. Banks like Goldman Sachs and JPMorgan acquire their own fintech resources and advisor businesses as they expand their wealth management services.

Where does that leave the independent advisor, as the biggest players in financial services coalesce around platforms of comprehensive service? The ability to offer independent banking services in addition to fiduciary service is emerging as a potential difference-maker for RIAs.

Banking makes advisors indispensable financial hubs for their clients

In many cases, an investor’s financial life is still splintered across multiple accounts and service providers: orphaned 401(K)s, plans disconnected from portfolios, and bank accounts separate from the oversight and coordination of independent advisors. And investors don’t like it any more than you do: a Cerulli study found that half of surveyed investors want a single provider to handle all of their financial needs. However, only a third actually receive this kind of service.

Banking and cash management solutions that connect to an independent advisor’s tech stack pave the way for “stickier” client relationships. With greater visibility into an investors’ finances, an advisor can easily make recommendations and choose offerings that make sense within their long-term plans.

Banking services level the playing field

While investors understand the benefits of unbiased, fiduciary service, one-stop convenience matters. Wirehouses and banks understand this intimately, and have become quick to acquire and deploy wealth management services to make their banking and cash management offerings more compelling. It can be difficult for independent advisors to counter these advantages… and professionals who are considering a breakaway may hesitate out of fear of losing access to banking capabilities.

The emergence of digital banking that integrates into independent advisor tech changes the equation. Advisors can now compete for clients with some of the biggest financial institutions. Breakaways can plan their path to independence with confidence that they will not give up one of their strongest advantages. And it frees RIAs to continue playing to their strengths as sources of fiduciary service.

Banking attracts clients who create growth

High net worth investors have complex financial lives with a lot of moving parts. Someone managing the growth of their own business, along with the education costs of their children, health costs of their parents, and their own retirement plans has too much at stake to entrust their finances to a group of providers who barely talk to each other — or worse, compete with one another for “wallet share.” These clients and prospects expect concierge-level service.

The ability to offer sophisticated banking solutions, such as securities-based lending, makes an independent advisor more attractive to the caliber of clients who can truly help advisors meet their own growth goals and expand the capabilities of their firms. When supported by an integrated wealthtech platform, RIAs can carve out more time to understand and serve these clients with a more complete range of solutions that are relevant to their lives.