We recently surveyed 375 wealth managers about their expectations of integrating technology and how it would benefit their business, based on their age. Our new research report shares that younger wealth managers see game-changing possibilities in the benefits technology can bring to the practice of money management.

No doubt, it’s a challenging time to be a wealth manager. Despite the substantial market growth over the last few years — and the benefits thereof — wealth managers have seen their practices become vulnerable to forces not easily overcome by a rising market. RIAs are looking to retain assets at risk to inter-generational wealth transfer and the fee pressure driven by burgeoning interest in passive investing. They need to invest in growth at the very time when some see their revenues in decline. The answer? The word whispered among many younger advisors is “Technology”.


In an industry dominated by advisors over 50 years old, younger upstarts are looking to technology for a competitive edge and to erode the advantages offered by larger firms. In fact, a whopping 76.8% of advisors under age 40 believe that technology will level the playfield among wealth managers over the coming five years compared to just 27% over 40.

Hence, while older, more established advisors are a bit more dubious of the value technology enhancements can bring to their practice — their younger counterparts are eager to find the solutions that will allow them to expand their services, scale their practices, and build client loyalty.

And while no advisors seem to think that RoboAdvisors will replace them, iCapital Networks’ recent survey of more than 375 wealth managers revealed a meaningful difference in how they expect integrating technology will benefit their business — based on their age.

Clearly, the iCapital Network Research demonstrates that younger wealth managers see game-changing possibilities in the benefits technology can bring to the practice of money management, creating opportunities to focus more of their energy on delivering the personalized service their clients demand. creating a service model that can help them thrive in a changing marketplace.


“Technology can not provide the personalized, expert counsel and recommendations that a seasoned advisor can offer an investor.” said Tom Fortin, Chief Operating Officer of iCapital Network. “But as advisors strive to scale their practices without sacrificing service quality, the right technology can augment the advisors’ efficiency and scope — and help deliver the client experience their investors require.”


METHODOLOGY: BENCHMARKING ADVISORS AND TECHNOLOGY

• This study was conducted in the Fall of 2018 with more than 375 advisory professionals inquiring about their expectations regarding the use of technology within their advisory practices and the benefits they anticipate technology might bring.

• Of the advisors surveyed, about half (46.1%) operate within independent broker dealers, slightly over a quarter (29.4%) service clients at “wirehouses” (large bank brokerages or private banks), and approximately a quarter (24.5%) are RIAs.

• The population surveyed falls into 2 age categories: Those under age 40 (32.6%) and those above 40 years of age (67.4%).

• The Assets Under Management (AUM) of the population surveyed distribute as follows: <$300K (59.4%), >$300K (40.6%).

The survey was conducted on behalf of iCapital Network by RA Prince & Associates, Inc., a globally- recognized research and consulting firm specializing in the study of private wealth creation and management.

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IMPORTANT INFORMATION / DISCLAIMER

This material is provided for informational purposes only and is not intended as, and may not be relied on in any manner as legal, tax or investment advice, a recommendation, or as an offer to sell, a solicitation of an offer to purchase or a recommendation of any interest in any fund or security offered by iCapital. Past performance is not indicative of future results. Alternative investments are complex, speculative investment vehicles and are not suitable for all investors. An investment in an alternative investment entails a high degree of risk and no assurance can be given that any alternative investment fund’s investment objectives will be achieved or that investors will receive a return of their capital. The information contained herein is subject to change and is also incomplete. This industry information and its importance is an opinion only and should not be relied upon as the only important information available. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed, and iCapital Network assumes no liability for the information provided.

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Diane Frankenfield

Diane Frankenfield

Diane is a Managing Director and Chief Marketing Officer at iCapital. Prior to joining, Ms. Frankenfield was Managing Director, Head of U.S. Marketing at Legg Mason. She has a BS in Finance from Pennsylvania State University and an MBA, Business and Industry Economics, from Bentley University and holds FINRA Series 7, 24 and 63 licenses. Additionally, Diane is a Harvard University-certified instructor in business negotiations. See Full Bio.