The Role of Technology for Recruitment & Retention in Wealth Management

Is technology important in the process of retaining advisors within a business? What influence does it have when bringing new advisors into a business in a competitive market?


By: The Wealth Mosaic

Our survey of C-suite/C-level executives across the various segments of the wealth management industry in the US pinpointed the importance of technology in retaining existing advisors, and in recruiting new ones.

Key findings

  • Inefficient technology affects retention.
  • Involving advisors with new technology is important.
  • Participants noted the worth of technology in future-proofing a business Technology adoption is essential to improve performance.
  • Technology can support the recruitment process.
  • A technology gap exists for the next generation of wealth holders.

Within the paper we explored the importance of technology, which aspects of the advisor’s role were deemed most reliant on and deserving of technological support, and how this dynamic may evolve going forward.

“Technology was deemed a factor well worth communicating in the recruitment process, with firms giving live demonstrations to prospective advisors and encouraging existing ones to share their experiences within the broader community.”

The executives had a range of opinions on these aspects. Some described technology as absolutely critical, while others saw it as one factor amongst many, and placed emphasis on variables such as culture.

Overall, respondents thought advisors are looking for the means to do their job the best way possible, using technology as a support for efficiency as well as providing the best possible experience to clients.

While no single aspect of technology was perceived as more important than another, respondents said that if the advisor was hindered from doing a good job, they were unlikely to come on board in the first place or would start looking elsewhere. However, it is important to note that technology alone would not be an initiator of change. For instance, culture was singled out as something crucial to support advisors.

When it came to how technology is handled internally, participants discussed the value of taking a collaborative and firm-wide approach that included taking on board advisors’ opinions before a new technology was introduced. This approach, it was thought, would be better as advisors would have a good understanding of a new technology and its benefits before any implementation.

Another point of discussion, was the best ways of adopting technology, using methods such as peer groups, established to encourage technology. But advisors are often not remunerated or incentivized to use technology in any of the firms that took part in this research. However, it was thought that advisors with better performance levels would likely be using technology more than those who were not performing as well.

Technology was also deemed a factor well worth communicating in the recruitment process, with firms giving live demonstrations to prospective advisors and encouraging existing ones to share their experiences within the broader community.

Finally, technology’s role in providing an attractive and relevant service proposition to the next generation and thus being important for advisors to have, was discussed. Participants were well aware of this, although the extent to which firms had taken action varied.

In summary, firms vary in their thinking about the role of technology in retention and recruitment. Interestingly, a majority are either actively seeking to improve their technology stack or are well aware of the need to do so. Only a small minority thought it of no importance.

About the participants

We interviewed 10 participants from different backgrounds, including RIA, independent advisory, investment management, and platforms. This makes it hard to compare them in terms of client numbers given the different models. However, the non platforms, the numbers ranged between 320 and 2400 clients. As you would also expect from a diverse list of respondents, assets under management (AUM) varied greatly. The respondents with the greatest AUM held US$1.3 trillion and US$1.6 trillion. Those with the least AUM held almost US$900 million and US$344 million. The middle ‘billions’ range varied from US$1.5 billion and US$114 billion.

We’d like to thank our sponsor and our partner, Pirker Partners for their support in this whitepaper in the WealthTech Insight Series.

You can access the full report, to read online or download, here.