The evolution of the wealth management industry is being driven by factors ranging from rapid firm consolidation and shifting demographics to elevated client expectations and new investment solutions. Underpinning the transformation in our industry is the impact of technology on every aspect of the business. While technological change is nothing new, the rapid pace of innovation, implementation and adoption is staggering. FinTech, WealthTech, and RegTech third-party partners and tools have increasingly eliminated the advantages of legacy enterprises, leveling the playing field between large and small wealth management firms.
We recently spoke with Josh Henrikson, Director of Technology at Trilogy Financial, a Hybrid RIA founded in 1999 in Irvine, California, with over $4 billion in client assets, and learned his perspective on the current and future role of technology in the mid-sized RIA marketplace.
Digital Wealth News: We all know that technology is especially critical for mid-sized firms to compete, but what is the role of technology in the advisor–client relationship?
Henrikson: We see technology enabling the advisor-client relationship. Today’s clients expect more from all of their service providers, including their financial advisors. They want a frictionless digital experience, so advisors need the right technology tools to succeed. Having hardware that performs as expected and software solutions that provide value to the client can make all the difference.
DWN: What specific pain points or inefficiencies can technology solve for?
Henrikson: There are many challenges, but one of the biggest pain points is data accuracy and integrity. It’s an issue that affects firms of all sizes, and we all need to find ways to get more data into our systems, ensure its accuracy, and access it when needed. This is especially true with new artificial intelligence technologies, which are only as good as the data they use.
DWN: How should advisory firms balance high-tech tools with the high-touch human element that advisors provide?
Henrikson: Clients want a high-touch, customized experience with their advisors, and while advisors can leverage resources their firms provide to accomplish this, this technology should never be allowed to disintermediate the advisor. Firms can overcomplicate their tech stacks, throwing too many disparate systems, tools and platforms at their advisors. Technology is great at increasing efficiencies and taking on the most burdensome back-office tasks, but it really proves its value by freeing up advisors’ time so they can build stronger client relationships.
DWN: Which aspects of advisor workflow can be most transformed by tech initiatives?
Henrikson: Client account opening, transitioning advisors, compliance tasks, note-taking, scheduling and client engagement are all areas where digital technology, automation and AI can streamline workflows. At Trilogy, we’ve focused on enhancing our CRM to make it a source of truth, convenience and simplicity for our advisors. The dream of a paperless office is quickly becoming a reality.
DWN: How should wealth management firms gather and incorporate advisor input when evaluating or implementing new technology?
Henrikson: Technology is only genuinely valuable if it helps advisors build, operate, and expand their practices. With so many technology tools available, having a disciplined feedback loop to hear from advisors about their needs is an essential way to cut through the noise. At Trilogy, for example, we established a formal Technology Advisor Board and meet with them regularly. Advisors, firm leadership, and operations staff come together to discuss new technologies being rolled out and provide feedback on current solutions. This type of board can also be used to beta-test tech enhancements before they are deployed in a live environment.
DWN: What common misconceptions exist across the industry about technology’s role in the advisory space?
Henrikson: When we talk with solutions providers who say they have an “all-in-one solution” or who pitch us their products using phrases like “single plane of glass,” we are usually skeptical. Most existing wealth management firms of scale have built out a customized tech stack for their unique needs. Many of these mid-sized firms do not have the time, resources, or expertise to create proprietary tools; they want a third party to provide plug-and-play solutions that complement what they have. Firms need to be flexible and not be held back by vendor lock-in, which makes it difficult to walk away from a partnership that no longer serves their needs.
DWN: Looking ahead, what technology trends will meaningfully change how advisors serve clients in the coming years, and how should firms prepare?
Henrikson: AI is in the early stages of transforming many industries, including wealth management. The technology has already become indispensable for advisors looking to scale their practices while providing enhanced services to their clients. AI advancements have already revolutionized scheduling, portfolio updates, note-taking, communication and other back-office functions. It also has real use cases for compliance, investment management and client segmentation. Firms need to ensure that, as they adopt AI, it is done in a way that enhances both the advisor and client experiences. In addition to AI, cybersecurity and data integrity are also ongoing concerns that technology will need to continue addressing.
