Platform

Innovate with RIA Fintech

Addepar

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Financial technology, or fintech, aims to improve or automate valuable financial services. RIA fintech is even more specific and refers to tools or platforms that offer a wide range of planning tools directed toward investment and financial planning services. By aggregating, analyzing and reporting client data, and integrating these capabilities with other tools, advisors can provide more accurate financial advice. On top of its many uses for RIAs, the most valuable use case for RIA fintech is providing more time for your clients and advisory work. 

Financial Advisor Technology

Fintech has become increasingly important for financial advisors, and that value will only continue to grow. By using fintech to assist in investment research, portfolio management, performance reporting, trading and rebalancing, wealth management and retirement planning, RIAs and their clients can see immediate returns. Also, client relationship management software (CRM) facilitates outreach to aid in business development and acquisition, as in-person meetings shift to virtual. 

Trends in RIA Fintech

Independent or Hybrid Firms 

Not only are there different types of fintech, technology is used differently by different types of RIAs. A firm’s technology, or lack thereof, can be a decision maker for an independent firm advisor. When seeking a new firm that's a good fit, independent firms often look for those who are using the latest and most accurate fintech. A hybrid RIA will use different types of software for the advising and broker-dealer sides of the business, while an independent RIA will lean on the custodial aspects. Regardless of how it's used, fintech is becoming increasingly influential for RIAs of all kinds. 

Estate Planning

Estate planners often use fintech to get a full picture of a client’s assets. Much like an investment advisor, they’ll need to access data from retirement accounts, as well as other non-digital investments. 

Tax Planning Services 

In a similar vein, tax planning services rely on fintech to not only capture a client’s financial situation, but also help aggregate that data into other programs and software to help with decision-making. 

Clean Data for Better Portfolio Management 

Regardless of the type of RIA or focus, across the board, RIAs are seeking cleaner data. When analyzing portfolio performance, specifically, all-in-one platforms are often the go-to. But the limitation comes with how they aggregate and pull in the information. When an advisor wants the full picture, it’s important to see all the data in one place. That is where a single system of truth can benefit advisors across the board. 

Single System Source of Truth 

When RIAs and advisors lean on all-in-one or other segmented fintech, they are often frustrated by their inability to view a client’s complete financial picture. This clouded view can make it harder to make sound decisions, as well as opening up the data to potential inaccuracies. This has led investors and advisors to move toward best-in-breed platforms, which integrate with existing software creating an optimized view for analysis, reporting and insights. With access to everything in one clear view, all types of RIAs can ensure they’re making the right decisions for their clients. 

Tools Crucial for Financial Advisors

Wealth Management

Wealth managers often look toward fintech to assist with performance reporting first and foremost. Many RIA platforms use an all-in-one approach, which can work for smaller RIAs that don’t need sophisticated reporting. But for growing firms, a wealth management ecosystem proves to be far more valuable. Aggregation of assets, including alternatives, allows for automation rather than manual entry, which saves time and leaves less room for human error. When the data is all available in one place, reporting becomes seamless, customizable and tailored to a client’s needs, which is the ultimate goal. 

Portfolio Management

Portfolio management software’s main purpose is to track, trade and analyze investment performance. With a dashboard, advisors are given a user-friendly view and area to pull reporting at scale, providing a positive client experience. When portfolios can be viewed and evaluated in their entirety in one place, informed decisions can be made from anywhere at any time. 

Reporting

Performance reporting software may be one of the most valuable tools for an RIA. Advisors often look for the ability to access personalized data to make on-demand analyses and provide reporting at scale. Fintech provides a high-touch feel without having to invest too much time, which leaves more brainpower for decision-making and creating personalized experiences. 

Client Relationship Management Software (CRM)

CRMs are often extremely valued because they free up advisor time so more energy can be spent with clients. By organizing data, streamlining processes, billing accurately and automating processes, advisors see an immediate return when relying on fintech for relationship management.  

The Benefits of a Single System of Truth

With the growth of the fintech industry, there are many platforms available to RIAs. The biggest advantage comes in an ecosystem-focused platform. By aggregating and organizing valuable data, day-to-day functions become easier and more efficient. 

What often holds even the savviest RIAs back from making the switch to a new system is the concern that their business will be impacted. That’s where Addepar is different. Running in parallel and integrating with existing systems ensures that nothing falls through the cracks, and advisors see an immediate benefit of accessing all data in one place. To learn more, read our RIA platform comparison guide.