ORLANDO, Fla., June 3, 2015 /PRNewswire/ -- According to
The Third Annual Study of Advisory Success: Confidence and
Concern in the New Digital Age, released today at Pershing's
INSITE™ 2015 conference, advisors are fairly evenly
divided between viewing digital advisors, also known as
robo-advisors, as competition or irrelevant to their business.
Perhaps most surprising in the research was that only 19 percent of
advisors think digital advice can complement their practice.
"There is no question that digital platforms are transforming
the industry," says Ben Harrison,
head of business development and relationship management at
Pershing Advisor Solutions. "Though most advisors are familiar with
digital advice, a relatively small percentage of advisors are
currently using this technology. The biggest opportunity we see for
transformation is for advisors to automate low-value tasks, expand
their reach and profitability."
The survey also found:
- Just over a quarter of advisors surveyed (27 percent) believe
digital advice is irrelevant to their practice
- While nearly another quarter (23 percent) feel that digital
advice represents competition
- By means of comparison, one-third (33 percent) of the advisors
ages 18-34 consider digital advice to be competition, and only nine
percent think they can complement their business
- Comparatively, 27 percent of advisors between the ages of 35-54
view digital advice as competition, while only 16 percent of
advisors over the age of 55 view them as competition
In general, price was cited by respondents as one of the most
threatening factors of digital online financial providers. More
than three quarters of advisors surveyed say the low cost of
digital advice will pose some sort of threat to their practice.
This data is underscored by the finding of a different study that
found more than half of investors surveyed agreed that the
investment advice most financial advisors offer is not worth the
one percent fee.
"It is short-sighted to limit the ways technology can complement
a business to only digital advice," said Kim Dellarocca, managing director at Pershing.
"Digital advice is important, but it is only one area where a firm
needs to evolve their technology strategy to deliver a wealth
management experience that mirrors the expectations of today's
consumers and workforce."
The study suggests action steps for advisors to transform
digital innovations into drivers of positive change and business
growth, including:
- Plan your approach to technology adoption. Advisors
should understand where they sit on the digital spectrum and create
a plan for where they want to be. Most begin by automating
repetitive or low-value- tasks in their business. Once implemented,
only then should they systematically work towards adopting
increasingly sophisticated tools.
- Make high-touch practices even more efficient and
more personal. Digital tools, like those that automate client
communications can help preserve the "high touch" experience many
advisors are known for, but in a more efficient and more personal
way that is customized to clients' specific interests.
- Improve your profitability and technology appeal. By
automating key tasks that support the delivery of wealth management
services, advisors can increase their margins and productivity.
Advisors can use that gained time and resources to focus on higher
valued activities like service delivery and more in-depth financial
planning. Infusing technology into your business with greater
self-service tools and more automation, not only adds to
profitability, but creates a more modern feeling for client
communications and interactions that today's tech savvy investors
crave.
- Articulate your value. As investors and advisors both
respond to digital advice trends, it is more important than ever
for advisors to educate their clients about the work they do on
their behalf– and the distinct value and wisdom the advisor offers
in relationship to the fees they charge.
- Be realistic about focus of the practice. If advisors
have an appetite for tech-enabled growth, they should invest time
and money in the latest capabilities. If not, their focus should
shift towards financial planning or serving wealthy or hands-off
investors.
To obtain a copy of Pershing's Third Annual Study of Advisor
Success: Confidence and Concern in the New Digital Age, please
visit http://www.pershing.com/success.
About Pershing
Pershing and its affiliates
provide global financial business solutions to advisors, asset
managers, broker-dealers, family offices, registered investment
advisor firms and wealth managers. A financial services firm
located in 23 offices worldwide, Pershing provides
business-to-business solutions to clients representing 5.8 million
active investor accounts on the U.S. platform. Pershing affiliates
are members of every major U.S. securities exchange, and its
international affiliates are members of the Deutsche Borse,
Australian Stock Exchange, Irish Stock Exchange, London Stock
Exchange and Toronto Stock Exchange. Pershing LLC (member
FINRA/NYSE/SIPC) is a BNY Mellon company. Additional information is
available on pershing.com, or follow us on Twitter @Pershing.
About BNY Mellon
BNY Mellon is a global investments
company dedicated to helping its clients manage and service their
financial assets throughout the investment lifecycle. Whether
providing financial services for institutions, corporations or
individual investors, BNY Mellon delivers informed investment
management and investment services in 35 countries and more than
100 markets. As of March 31, 2015,
BNY Mellon had $28.5 trillion in
assets under custody and/or administration, and $1.7 trillion in assets under management. BNY
Mellon can act as a single point of contact for clients looking to
create, trade, hold, manage, service, distribute or restructure
investments. BNY Mellon is the corporate brand of The Bank of New
York Mellon Corporation (NYSE: BK). Additional information is
available on www.bnymellon.com, or follow us on Twitter
@BNYMellon.
Methodology
Harris Poll conducted the
online advisor survey on behalf of Pershing from April 14 – May 1,
2015 using sample from the Harris Poll Panel of Financial
Advisors. A total of 350 interviews were conducted among the
following groups:101 among RIAs (independent RIAs not working at a
wirehouse or affiliated with a regional brokerage); 100 among
wirehouse advisors (those working at wirehouses or regional
brokerage firms); and 149 among other advisors (those working at
insurance agencies, independent broker-dealers or banks). This
online survey is not based on a probability sample, therefore, no
estimate of theoretical sampling error can be calculated. A
complete survey method, including weighting variables, is available
upon request.
Contact:
Cassandra Osei
+1 551-222-5046
cassandra.osei@pershing.com
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SOURCE BNY Mellon