The five benefits of investment technology

How are automation and digitization benefiting clients and advisors?

The automation and digitization of financial processes have made it quicker, easier and more cost-efficient to get things done — allowing for more accessibility than ever before. This trend has become increasingly evident when it comes to wealth management, in which investment technology has helped to facilitate broad-based RIA firm relationships specially tailored to the unique and often complex needs of affluent families.

In fact, the use of technology has made it easier to manage necessary but mundane tasks, freeing up clients and wealth advisors to focus on manners pertaining to estate planning and generational wealth. While fintech and other innovative disruptors tend to emphasize the more advanced elements of modern computational wizardry, the real advantage is in how technology takes care of day-to-day needs with minimal oversight.

Understanding client needs

Even with all of the technological capabilities and solutions available, many may not take full advantage of what these tools offer. Although the latest and greatest innovations might naturally appeal to technology early-adopters or the gadgeteers at heart, the individuals and families tend to have a more specific range of concerns that they'd like addressed.

When we sit down with clients to discuss what they're looking for, it often comes down to finding better ways to take care of routine tasks. This might include reducing the number of times clients have to call for bookkeeping and other needs; automating time-consuming processes, such as making wire transfers; and streamlining activities that take time away from more strategic matters.

Five ways technology can help with investments

The use of investment technology is about so much more than saving time and increasing efficiency. Here are five other benefits that have helped to enhance the advisor-client relationship.

1. Greater customization

Each client has distinct needs that can't be addressed with cookie-cutter solutions. One of the biggest advantages of the software we have in place is that they allow us to provide fully personalized advice and services. Whether this means tracking and monitoring day-to-day finances, evaluating and implementing investment and personal finance strategies, or generating customized reports on demand, we can give clients just what they need to help them stay on track.

2. Enhanced decision-making

Many of the wealthy individuals and families we work with have diverse portfolio investments, business interests, personal real estate holdings and financial accounts, which can make it difficult for them to fully assess where things stand. Our technology provides them with a more holistic and transparent perspective. It not only enables them to see investment performance, asset allocations and portfolio risk in one place, but it also allows us to help evaluate opportunities and make better decisions across the entirety of their financial lives.

3. Increased opportunities

As an RIA, it's our duty to provide wealth management advice that is not unduly limited to certain investments or strategies. Unlike the legacy systems that broker-dealer financial advisors tend to rely on, our open architecture platform affords access to a diverse range of investments and strategies, as I've noted in "5 Investing Tips to Get Your Wealth Plan on Track." Clients can invest in financial products from a multitude of providers, instead of just one, creating more opportunities for potential growth.

4. Better collaboration

Clients typically engage with accountants, tax advisors, estate planning specialists and attorneys, who work with us to ensure their needs are appropriately met. Previously, this process often involved time-consuming efforts to gather and distribute the necessary information. However, now, our systems allow us to quickly supply these service providers and other relevant parties with view-only links to the data they need, eliminating costly prep work and enabling them to turn things around at a significantly faster pace.

5. Lower costs

One major benefit of today's high-powered technology is how it can help to reduce costs, both for clients and advisors. In a world where yields are low, expected returns seem modest at best, and the path of least resistance for tax rates is up, many clients are seeking to optimize spending and streamline account relationships. Meanwhile, amid the broad transition toward fixed-fee wealth management services, an RIA firm like ours must be able to operate efficiently and economically or risk not being able to deliver on our promises.

Technology isn't the only answer when it comes to providing the services that clients need and expect, but it can be a crucial means to an end. For wealthy individuals and families, the objective is not just to build wealth, but to create a framework that allows them to better organize and manage their lives. With a better grasp of the big picture and less time spent on taking care of the little things, they can make the decisions that keep them on the right path.

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The views expressed in the article are those of the author and/or person interviewed and do not necessarily reflect the views of Silicon Valley Bank, a division of First-Citizens Bank and First Citizens BancShares, Inc. The materials on this website are for informational purposes only, are subject to change and do not take into account your particular investment objective, financial situation or need. Since each client’s situation is unique, you should consult your financial advisor and/or tax planning professional before acting on any information provided herein.