How technology can help advisors boost their AUM

July 30, 2020 by Anthony Stich

Anthony Stich featured on InvestmentNews

About the author

Anthony Stich

Chief operating officer

Anthony Stich has one goal: to develop a team of exceptional customer success leaders across the globe, empowering them with the latest methods of strategic planning, content development, and lead generation to successfully grow Advicent, the leading provider of SaaS technology solutions for the financial services industry, into a global brand. Published in numerous global outlets including the Journal of Financial Planning,, Investopedia, and bobsguide as well as being featured on Financial Advisor IQ, Asset TV, and Bank Bosun, Stich has swiftly become a thought leader in the FinTech space, providing compelling statistics, a thought-provoking perspective, and much-needed humor in a rapidly-changing industry.

My latest piece on InvestmentNews offers a look at how advisors can justify fee structures and grow AUM with FinTech solutions that seamlessly integrate into their practice.

Read the full article below:

How technology can help advisors boost their AUM

Now more than ever, advisors need to develop the confidence to adequately charge clients for the time and hard work that goes into crafting and maintaining a financial plan. The uncertainty stemming from factors like the current pandemic and ongoing market volatility reminds us that these are no ordinary times for advisors and their clients. Any advisor worth his or her weight should be working with clients to adjust plans in alignment with these factors, and charging fees accordingly.

With fee compression and subscription-based models putting pressure on advisors to monetize their businesses in different ways, and more clients and prospects expecting a more comprehensive, holistic plan, it’s crucial for advisors to adequately (but fairly) charge their clients — an advisory practice is a business, after all!

Since holistic planning requires more time and labor on the advisor’s part, it can be tricky for them to balance the time-spend with the fee to the client. If advisors become more confident in the plans they have created, they will feel more comfortable charging clients a reasonable fee for those plans.

One way to justify the fee with clients and convey the value being provided to them is to explain why a certain plan costs as much as it does by breaking down everything that went into the plan, from administrative work, to due diligence and to building the portfolio. Some of the financial planning technology platforms available in today’s marketplace enable advisors to comprehensively walk clients and prospects through all the workflows and processes involved in creating, monitoring, and amending financial plans via a digital client portal.

Let’s be honest — advisors are good at building relationships and providing advice, but not all of them are good at running a business. But that doesn’t mean there aren’t solutions available to help them. Advisors can automate some of those time-consuming back-office and administrative tasks using various technologies, which can make their practices run more efficiently, effectively and profitably.

Consider the 2019 U.S. Advisor Metrics report from Cerulli Associates, which shows that “heavy” technology-using advisory firms have an average of $238.9 million in assets under management, compared to an average AUM of $106.3 million for their “light” technology-using counterparts. Interestingly, Cerulli found that heavy technology users spend 34 percent less time resolving client service issues and have 24 percent more time for practice management activities, highlighting the effectiveness of technology for increasing advisors’ ability to focus on the most important parts of growing their business.

With so much technology available to advisors, it can understandably be overwhelming knowing where to start, or ultimately which solution to choose. However, that should not deter advisors from adopting advanced technologies into their practices, since the difference in profitability highlighted in the Cerulli report is so crucial.

One suggestion for advisors is to look for two or three solutions that integrate well with how they run their business, and then become proficient at all of them. For example, advisors can consider one solution for financial planning, one for portfolio management and one for client relationship management to cover some of the most critical areas, but ultimately choose the ones that best fit their style.

By mastering these different technology solutions, advisors can become more confident in the plans they build and, in turn, feel more comfortable with the fees they charge for their advice, allowing them to run a more efficient and profitable business.

-- via InvestmentNews, published on July 30, 2020.