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Top 6 Technologies That Financial Advisors Are Adopting in 2017

Jeremi Karnell
Feb 15, 2017
Throughout the past couple of decades, technology has transformed our lives in countless ways. From how we shop and how we travel to how we work and how we communicate with those around us, the impact of technology is evident in every part of our lives. Jobs that did not exist just a decade ago are now providing stable employment, and investments that were reserved for the richest among us are now accessible to everyone through platforms like exchange-traded funds (ETFs) and index funds.

The financial planning and wealth management world has been just as affected by changes in technology as the world at large. New tools continue to arise, making the job of the financial professional easier, more efficient and more effective for their clients.

As I sit through today's conference agenda at the T3 Advisor Conference in Orange County, CA., I grow impressed with the array of fintech financial advisors have at their disposal. Here is our look at the top five technologies wealth managers, and other industry professionals will be embracing in 2017 and beyond.

1. Automated Investment Technology

With clients growing ever more comfortable with index funds, exchange-traded funds, and other passive investments, there has never been a better time for an automated approach to investing. Financial planning and wealth management firms are embracing automated investment in a big way, incorporating it into their client service and using it to provide lower expenses, better results and a higher level of customer satisfaction.

Automated investing technology is playing a bigger role than ever, and that growth is expected to only grow in 2017 and beyond. While some independent advisors and owners of wealth management firms are still skeptical of so-called robo-investment platforms, others have already incorporated this unique form of passive investing in their practices - with excellent results.

2. Strategic Rebalancing Software

Maintaining the proper asset allocation is one of the fundamental tenets of the financial planning and wealth management industry, but keeping a proper balance has never been easy. With the relative value of stocks, bonds, real estate, and other asset classes always on the move, maintaining a steady asset allocation was often all but impossible.

That is changing, thanks to specialized and highly sophisticated software that performs those strategic rebalancing calculations accurately and in a fraction of a second. Instead of manually calculating client balances and establishing recommended asset allocations based on age and investment goals, financial advisors and the owners of wealth management firms can let the software do the hard work.

Strategic rebalancing software is expected to play an even bigger role in 2017 and beyond, as investors seek lower costs, higher performance and greater safety for assets they cannot afford to put at risk. The benefits of strategic rebalancing software are clear for both wealth managers and their clients, and those advantages are expected to drive the growth of the technology as 2017 gets underway.

3. Regulatory Compliance Technology

The 2017 calendar year promises lots of new regulations, most notably the upcoming implementation of the Department of Labor fiduciary rule in April. While the fiduciary rule requirement that advisors always put the best interests of their clients first may seem simple at first, complying with the new regulation is not so easy.

That is why many financial planning and wealth management firms are busy installing software designed to make compliance with the new DOL fiduciary rule and other industry regulations easier. These technological products can help financial planning and wealth management firms reduce the risk of non-compliance and train their staff members more efficiently.

 4. Fee Analysis Technology

One of the most common complaints among financial planning and wealth management firms is that their fees are too high. The fee structures and compensation packages used by individual financial advisors and wealth management firms vary widely, and that can make comparing costs and benefits difficult for firms and the clients they serve.

 As the 2017 calendar year begins, expect more businesses to embrace the power of fee analysis technology. Customer education is one of the most notable advantages of fee analysis technology, and one that customers are sure to appreciate.

 Instead of simply comparing the fees they pay to that of their investment peers, clients can get a clearer look at the value the fund is providing. From help with tax preparation to hand-holding through market ups and downs, the added value of professional financial planning has always been hard to quantify. The new fee analysis technology allows the owners of financial planning and wealth management firms to finally quantify their value, enhancing client satisfaction and improving customer retention in the process.

 5. Enhanced Security Technology

The need for cybersecurity has never been greater, and nowhere is state-of-the-art security more important than in the world of financial planning and wealth management. With so much money on the line and client confidence so vital, a single security breach could destroy the reputation of the firm.

Expect more financial planning and wealth management firms to deploy the latest in security software and related technologies in 2017, acting to protect the interests of their clients before the bad guys strike. From relatively simple advances like requiring stronger passwords and implementing two-factor authentication to cutting-edge artificial intelligence, financial planning and wealth management firms will use 2017 to enhance their security and prevent costly data breaches.

6. Business Intelligence Technology

In the world of finance, it is what you know that counts. Business intelligence technologies like Truelytics can provide practice owners with significant advantages, and you should expect to see more BI solutions instituted across the board.

 From the analysis and optimization of existing practices to the valuation of practices for sale, business intelligence technologies can provide a world of value across the financial spectrum. Business intelligence can also give practice owners and individual financial advisors insight into what their customers want, something that will become even more important as 2017 gets underway.

The only thing constant in the world of financial planning and wealth management is change, and every new year brings new advances in the industry. Investments in technology are expected to grow into 2017 and beyond, as more firms recognize the importance of client security, lower fees, more strategic rebalancing and the power of passive investing. The five cutting-edge technologies listed above are expected to lead the way in 2017, much to the delight of financial professionals everywhere.

You may also be interested in reading: Artificial Intelligence and Wealth Management: Vive la Revolution


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