Financial advisor transition software has become crucial for registered investment advisor (RIA) firms seeking to attract top talent. With M&A activity continuing to rise and no signs of slowing down, having the right transition tools can determine whether advisors choose your firm over competitors.
Technology for RIAs typically involves wealth management, investment management, customer relationship management (CRM), client engagement, portfolio management, and tax planning systems. Financial planning software is also crucial. These tools boost productivity, automate back-office tasks, and ultimately help clients meet their financial goals. A firm’s tech stack can also aid with the business’ marketing efforts as the company tries to draw in new high-net-worth clients and prospective clients through lead generation and other business development activities.
Advisor transition software serves a critical purpose – it enables successful M&A and advisor recruitment. Think of it as the bridge between winning talent and creating value from that talent.
The Real Cost of Manual Processes
Most firms still rely on paper-based transitions and file management, creating serious problems for growth. The numbers tell the story: 88% of firms prepare documents manually, extending the transition process beyond 10 days. Meanwhile, clients now expect quick responses – within 90 minutes for emails and 90 seconds for text messages. This gap between client expectations and manual processes can hurt your ability to attract and retain both advisors and new clients.
RIA Transition Technology
In the transition process, the level of data aggregation and tracking investments, let alone transitioning them, that is needed requires tools for an RIA firm that streamline operations and ensure the secure collection of clients’ information. Before RIA practices added at least some level of automation to the advisor and account transitions process, it was often clunky, cumbersome and fraught with logjams due to lost paperwork or clients not completing the data collection process.
Technology continues to create greater efficiency in the industry particularly with advisor transitions services. After all, with a larger swath of practices planning to acquire or merge with others as advisors are retiring or to gain scale and access to more services, these businesses will need technology to achieve M&A success. All of this data gathering is crucial to assure that client relationships are maintained and as many clients as possible are transferred to the new firm. When it comes to the acquiring firm, the faster that transition can be completed, the quicker they can fully realize their investment in the new company.
The RIA tech stack should be a critical part of business growth and providing an exceptional client experience. As onboarding is a client’s first impression — which, as many know, advisors don’t get a second chance to make a good first impression — it’s important that an individual RIA utilize tools to gather all the necessary client information and provide an enjoyable client experience. The RIA tech stack should also provide financial advisors with every opportunity to start their new businesses successfully.
Wirehouse to Independent Transition Software
Financial advisors who are making the leap from broker-dealers to RIAs require all the tools, including tech tools, to create a smooth transition. Of all of the advisor transitions, this is the most challenging as advisors must pursue new leads; there are also a great deal of regulatory and compliance checks that need to be performed to enable this type of transition to be a success.
At the same time, the independent RIA channel is thriving and several advisors are leaving wirehouses to go to RIAs. According to Diamond Consultants’ 2023 Advisor Transition Report, wirehouses lost about 350 advisors while independent firms gained more than 550.
As advisors transition to independence, they have the opportunity to select their technology and other tools for perhaps the first time in their careers. This is a time when they are designing their services to suit their target clients. They will be evaluating what tools belong in their technology stack including a client portal, financial planning software, performance reports generators, and even AI tools if they find them appropriate for their clients.
But as these former wirehouse advisors transition, it’s vital that client data, if any is allowed to be moved to the new firm, is handled properly particularly from a compliance standpoint. Some advisors may be allowed to maintain some existing clients while others may have to start from scratch in their independence. Technology that ensures compliance on this front as well as cybersecurity safety given all the sensitive client data that is involved is of the utmost importance.
Advisor Transition Support
Whether advisors are moving from a wirehouse to an RIA or going from one independent firm to another, a great deal of support is required to ensure a smooth and efficient transition. Advisors need their CRM to be up-to-date and populated with all the information they need so they can provide their clients actionable insights soon after joining the new firm. They also require that all of a clients’ assets are transitioned in a streamlined fashion so the client experience is seamless. In this world rife with technology solutions and tools, clients have come to expect that their assets transition as quickly as they can receive a package from Amazon.
Practices that don’t have strong transition capabilities will soon be made apparent and it will cause advisors to think twice about selecting their firm in the future. Though the advisor has already selected the practice they want to next begin their financial planning work, a company’s operations are on audition during the transition process. No one benefits from poor transition protocols.
How Does OnBord Help Advisors Transition?
OnBord provides a simple, secure tool with automated compliance features that saves firms both time and money while onboarding new clients and advisors. With a proven four-step process, the advisor benefits from a seamless transition using OnBord’s mobile-friendly RIA software.
Our tools meet clients where they are and gently nudge them to complete their data input. From a cybersecurity standpoint, clients’ data is never compromised while the RIA practice achieves what it needs for new business acceleration.
At a time when 88% of firms still prepare documents manually, which drags the process out to 10 days, bringing technology solutions into the transition process is vital. People respond to emails within 90 minutes typically and text messages within 90 seconds; these are the tools that OnBord’s services leverage to give the industry the transition software it needs.