A recent Investment News article prompted our desire to provide our AdvisorPeak commentary. We feel that more information from the article’s research source may be beneficial to some readers. The article appears to be incomplete in providing enough data to conclude some of the critical facts presented. Our download of the report overview from Celent references vanguard WM technologies?

Here is an excerpt from the article:

The COVID-19 pandemic is redefining the technology investment landscape for the long haul and wealth managers are expected to accelerate spending to reach approximately $24 billion annually by 2023, according to a Celent analysis published Wednesday. 

Yet, accelerated tech spending won’t kick in until mid-2021, Celent predicts, as firms are still recovering from decreased revenues this year. In fact, tech spending this year is expected to drop 3% to $21.4 billion as tech budgets are likely to stay on hold until the uncertainty surrounding the pandemic subsides.” 

At AdvisorPeak, we agree with the Investment News article that tech spending will increase in 2021 through 2023 but disagree on the article’s reference to tech spending decreasing 3% this year based on our own experience and the source of the analysis (who is the report’s client?).

According to the report’s overview, the research shows a ‘high-prioritization from COVID-19’ and to ‘Accelerate investment’ in the following:

  • Digital Onboarding
  • Hybrid Advice Experiences
  • Cybersecurity
  • RPA, Workflow Management
  • Biometric Authentication
  • Virtual Assistant: Chatbots
  • Cloud Migration
  • Data/Analytics

We take this as increasing investments in these technologies that should occur now, especially if advisors do not have these integrations.

Our AdvisorPeak research concludes that most of these reports indicating ‘tech spending’ decreasing are due to reducing Venture Capital funding. The startups not receiving stage 1+ funding are startups in payment systems development or emerging banking technology. The decline in startup financing correlates to decreasing consumer spending. The tech-spending decreases do not account for tech stack spending by financial advisors, regardless of COVID-19.

At AdvisorPeak, we tend to think similarly to what Douglas Fritz wrote for Financial Planning Magazine in March 2020, in Voices: Tech innovation in the time of coronavirus:

“This is not a test. In the midst of unprecedented upheaval caused by the coronavirus pandemic, the time to noodle around “getting innovation right” or having a “functioning technology strategy” is over.

Yet for those who spent the time, hired the right people, shifted their spending and put up with the pain of change, this is the time to shine. Your clients can now connect via video chat, remotely sign documents and easily get answers to their mounting questions.

But don’t expect many thanks: for years now they’ve come to expect it of your firm because you were smart enough to think ahead, invest the money and deliver on those expectations.

For those that didn’t make the shift, this is going to be a painful wake-up call. You should be prepared to address additional frustration that your clients are going through.

In closing, we at AdvisorPeak ask: Are you ready to improve your productivity and ability to remain in compliance? Do you want a tech stack that will carry you into the future? Are you paying for all-in-one components you never use? Schedule a demo with us to experience why our feature-rich software with open APIs is the best solution to a customizable tech stack.