How Technology Is Matching the Wealthiest Clients With Advisers

The adviser industry continues evolving as innovation and new technology disrupts the status quo. According to Jefferson National’s second annual Adviser Authority study , tapping the power of technology is one of the clearest distinctions of the most successful advisers and most affluent investors — and all advisers should take note.

This year’s study again shows that the most successful RIAs and fee-based advisers are forward thinkers, marketing innovators and technology adopters. This innovative mindset is driving change in our industry — and all advisers at every level can capitalize on this knowledge to build a more scalable and profitable practice and create a more enduring franchise.

(We surveyed nearly 700 RIAs and fee-based advisers nationwide, and more than 700 individual investors, from the mass affluent to the ultrahigh net worth. Then we zeroed in on two types of successful advisers: Advisers who individually manage a total AUM of $250 million or more, and high-earning advisers, who earn over $500,000 yearly income from their advisory business.)


Year over year, the pursuit of profitability continues to be advisers’ single most important practice management issue. And when asked how they are planning to enhance the profitability of their practice, the push for new clients remains the top driver. More than half (56 %) of RIAs and fee-based advisers say that adding new clients is the top factor for enhancing profitability. Likewise, advisers are focused on targeting more affluent clients (27 %), targeting the younger segments of Generation X and millennials (25 %), as well as attracting and retaining clients’ heirs (25 %).

And again this year, it is the successful advisers who say that technology is key to driving profitability. Adding new technology is more likely to be chosen as one of the most important factors to enhance profitability by high AUM advisers (34 %) than the typical adviser (23 %). Likewise, consolidating existing technology is more likely to be chosen as key to profitability by both high AUM advisers (21 %) and high earning advisers (21 %) than the typical adviser (12 %).

This reinforces the findings of our 2015 study. We learned that the most successful advisers are tech obsessed. They use twice as many technology apps in their practice compared to the typical adviser. The majority of successful advisers evaluate their technology at least weekly, while the typical adviser is more likely to evaluate their technology monthly. Ultimately, we saw that advisers who manage more AUM spend more on technology — and use more technology — to make their job more seamless and achieve greater scale. The conclusion? For successful advisers, the only thing more expensive than adding technology is not adding technology.


This year we revisited the topic of robo advisers and digital advisory solutions. With volatility identified year over year as the top concern related to investing, protecting their practice and protecting their clients’ portfolios, we knew it was important to ask both advisers and investors if they are confident that robo advisers can provide proper management and protection for portfolios in volatile markets. The differences are striking — and reinforced our earlier findings.

This year we see that most advisers remain divided about the effectiveness of robo advice. While 38 % of advisers say they are confident that robo can provide proper management and protection in volatile markets, a nearly equal number (36 %) are not confident. Likewise, in 2015, we learned that when it comes to robo advice the typical adviser is not on board — awareness is low, adoption is slow and the jury is still out. Just one-fifth of advisers use robo advice in their practice, just one-quarter say they are familiar with the robo model, and they are equally divided on the question of whether robo is really an ally or the enemy.

And yet, when comparing the most successful advisers to the typical adviser, confidence in robo increases considerably. This year, more than half (53 %) of both high AUM and high earning advisers alike say they are confident in a robo’s ability to manage volatility. This aligns with our findings from 2015, showing that the most successful advisers are far more likely to be the early adopters of robo advice. They are also employing robo for wealthier and older clients — contrary to popular belief. More than half (52 %) of the early adopters report that they most often use robo for clients with over $1 million in investable assets—and a full 20 % say that they use it for clients with over $10 million in investable assets.


When we asked investors if they are confident that robo advisers can provide proper management and protection for portfolios in volatile markets, one thing is clear — investors believe that technology is no replacement for guided advice. Only two in ten (21 %) investors are confident that robo advisers can provide proper management and protection for portfolios in volatile markets. Even among the more tech-savvy ultrahigh net worth, only 35 % say they are confident in a robo’s ability to manage volatility.



Technology has changed the way that we communicate. But for most investors, relationships still matter and they still seek the human touch. When engaging with their adviser, more than half (53 %) of investors who work with an adviser say they want a high-touch approach. When asked to name their preferred method of communication with an adviser, investors rate phone calls first (35 %), face-to-face meetings second (34 %), and email a distant third (14 %).

While these numbers are relatively consistent across most investor segments, the preferences shift dramatically for the tech-savvy UHNW. Less than one fourth (23 %) say they prefer a high-touch approach when engaging with their adviser, and more than half (54 %) say they prefer a low-touch approach. For the UHNW, phone calls still rated highest (32 %), while the demand for face-to-face meetings declined (23 %), and email rated a close third (19 %). And although the numbers are low, the affluent are also more receptive to text message, video chat, and social media.

Advisers who manage more AUM spend more on technology — and use more technology — to make their job more seamless and achieve greater scale.

How is it that the clients with the most complex financial pictures are the ones least likely to want to meet in person? In speaking with elite wealth managers, it becomes clear that these UHNW investors have complicated lives with less time to spare for face-to-face meetings. They prefer the ease and efficiency of instant communication. For these investors, the quality of information is more important the amount of time spent with their adviser.


The most successful advisers understand the importance of adopting more technology and digital solutions to build a more efficient, scalable and profitable practice on the back end — and an enhanced user experience on the front end. And yet, technology may not be the most important solution for attracting new clients—not even the tech-savvy affluent investors and younger investors that many advisers seek.

For example, when we asked advisers which strategies they are implementing to attract the next generation of clients, the number-one answer is working with a current client’s family and children, which is tied with increased use of social media, both chosen by 36 % of advisers. Following at a distant second was the increased use of mobile technology, selected by 26 %. We also learned that the most successful advisers place an even greater focus on adopting new technologies to attract the next generation of clients — more likely to use social media, more likely to go mobile, and more likely to enhance their website and client portal.

So how did this compare with investors? We asked what would make them more likely to work with a financial adviser, and their priorities were distinctly different. Investors placed much less importance on working with a client’s family and children (9 %), increased use of social media (5 %), and increased use of mobile technology (5 %). Even when looking specifically at the next generation of younger investors — millennials and Generation X — the percentages increase only slightly to 11 %, 8 %, and 8 %.

So what is important to investors when they are choosing an adviser? The number-one factor by a wide margin, selected by 46 % of investors, is the adviser’s years of experience. This is followed by personalized advice for a holistic financial plan (26 %), and serving clients using a fee-based fiduciary standard (24 %). Most other factors quickly drop to the single digits.

As our study reveals, investors care about the issues of transparency and fees — something that all RIAs and fee-based advisers understand. And ultimately, investor optimism increases when working with an adviser. These findings are relatively consistent across all segments of net worth, reinforcing the fundamental principle that technology has its benefits—and there are many. But in the end, nothing can replace the value of holistic, unbiased, guided advice for attracting new clients and retaining current clients.