As the wealth management industry continues to evolve, registered investment advisers (RIA) are tasked with keeping up with the latest tech trends in order to remain competitive and provide the best service to their clients.
In 2023, several emerging RIA technology trends have already begun to have a significant impact on the industry, including cybersecurity, client onboarding and compliance technology.
One recent report shows that 57% of financial firms are increasing their technology budgets this year, with a goal of increasing operational efficiency.
But not all tech is seeing a boom. Read on to find out which RIA technology trends are the highest priority for advisers in 2023, and how those trends could affect the larger financial planning landscape throughout the rest of the year.
3 RIA Tech Trends on the Rise in 2023
Financial firms are looking to tech to fill the gaps in their organizational structure as they scale upward, specifically in the areas of cybersecurity, client onboarding and compliance solutions.
1. Cybersecurity
The SEC proposed the Cybersecurity Risk Management, Strategy, Governance and Incident Disclosure rule in March of 2022, which aims to address concerns about the safety of digital data. The rule requires RIAs to report any and all cybersecurity incidents within four business days.
This is just one step in a larger move by the SEC to address cybersecurity, which has been on their annual examination priority list since 2015.
As a result, RIAs are investing more heavily in cybersecurity solutions in 2023 than in recent years. As the recently released 2023 T3 Software Survey shows, cybersecurity software adoption rates increased from 22.45% in 2022 to 24.33% in 2023.
That same report shows that advisers are also increasingly satisfied with their cybersecurity technology, moving from a 7.79 out of 10 satisfaction rate in 2022 to an 8.25 in 2023.
2. Client Onboarding
Client onboarding technology can improve the user experience, enhance efficiency, reduce costs and create a more consistent client experience. Yet, many smaller RIAs are wary to invest abundant funds into technology that will only be used a few times a year.
To tackle this problem, some tech providers are providing onboarding support as part of a larger technology package.
It’s clear that digital onboarding is a great value add for RIAs, especially since a recent Schwab report showed that 31% of paper forms given to clients return as not in good order (NIGO). That same study showed that 4 out of 5 RIAs are already using digital client onboarding tools.
As digital onboarding becomes the norm, advisers face the challenge of finding and implementing a right-fit technology vendor which can provide the best bang for their buck.
3. Compliance
Lastly, compliance takes a spot at the top of the list for RIA technology trends in 2023. Compliance affects each department within an RIA, from client-facing processes to legal operations and beyond. Additionally, compliance errors can have drastic impact on an RIAs reputation, not to mention the potentially hefty SEC fines.
Compliance software can help your firm:
- Monitor employee communications.
- Archive email, social and website communications.
- Secure virtual workplaces.
- Test and improve policies and procedures.
- And more.
Plus, 86% of advisers say integrating compliance technology has made creating a culture of compliance easier.
Whether your firm is a small team or quickly growing, compliance software can help you connect better serve your clients and stay within federal regulations.
Compliance, onboarding and cybersecurity are taking the cake as top RIA technology trends thus far in 2023. As you round out your tech stack this year, consider whether these trends could add to your value prop and help you remain competitive in the industry.