When it comes to tech adoption in wealth management, many hands make light work

Globe and Mail

13-05-2025

Keeping up with innovations in wealth management can be a full-time job. New technology has made the industry more efficient, better at serving clients and more adaptable to changing needs. But these advancements have increased pressure on wealth management firms and advisors to keep pace and ratcheted up the risks of getting left behind in a competitive marketplace.
Today, clients receive highly customized service, content and products. Although they might not have consciously noticed the shift, many are enjoying richer and more meaningful conversations with their advisors, who are more informed about the client's needs and goals, and better equipped with personalized recommendations and solutions.
Technology is fuelling this progress. New tools enable lower operating costs for wealth management firms and free up advisors from time-consuming research and administrative tasks. In turn, advisors can spend more time with their clients, understanding their goals and thus growing their own businesses. That all opens the door to revenue growth and margin expansion.
There's only one sticking point: keeping up with the latest technology is a time-consuming and costly task.
Advisors are under constant pressure to upgrade systems to meet client demands. Wealth management platforms must be adaptable to changing markets and regulation.
It would be difficult for any one firm or individual advisor to develop these capabilities on their own. Luckily, they don't have to, as an entire ecosystem of companies and groups has taken shape.
The first and arguably most important part of that ecosystem is technology and service vendors. These companies, many of which fall into the growing category of 'fintechs,' provide services designed to enhance internal operations and the client experience.
That means wealth management firms and advisors don't need to be technologists. Instead, they need to build internal technology platforms with a modular design that enables something close to plug-and-play integration of external technology tools.
Once that architecture is in place, companies only have to decide which fintech firms they want as partners, and how deep those partnerships should be.
On the first front, partner due diligence is becoming a make-or-break function. By integrating fintechs, wealth management firms are betting on the future, but they must develop a repeatable process to assess not only the vendor's technology offering but also their future strategy, architecture and culture to enable a long-term partnership.
Firms often use a scorecard to evaluate partners' cultural alignment, investments, innovation and use of artificial intelligence for productivity. The goal is to ensure partners are meeting or exceeding the firm's needs and contributing to its overall objectives.
Through partnerships, firms can expand capabilities rapidly, with each partner contributing its own complementary expertise.
Vendors aren't the only partners who can help wealth managers keep up with the pace of change. Wealth management firms and individual advisors should also be active in industry groups that can provide critical insights and best practices on regulatory changes and emerging technology.
The perfect example of how partnerships can help wealth managers navigate industry change is the recent move to T+1 trading. To make the difficult transition to next-day settlement, wealth management firms called on the services of a wide variety of vendors and partners who provided the technology to accelerate back-office functions.
Firms also connected through industry associations to share best practices. This ensured advisor productivity and guided the entire transition, making it manageable for the industry.
No firm could have made this leap on their own. Fortunately, the old saying is true: many hands make light work.
Donna Bristow is chief product officer, wealth management, at Broadridge Financial Solutions in Toronto.