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Digital transformation

Advisor360°, January 19, 2023

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How can wealth management firms increase margins by using new technology solutions? Richard N. Hart III of Advisor360° and Nick Diodati of Charles River Development discuss.

Video transcript

Rich Hart: You know, a little bit about what you've seen with your enterprise clients, right? So markets off 20%. Right? What are your enterprise clients saying about that? Are they still making investments? You know, what's it look like out there for you guys?

Nick Diodati: Our experience is that firms are still interested in moving forward with technology. And I think part of the reason for that is that they view this as long-term investment.

So organizations do realize that the natural trend is toward better applications, better experience, more efficiency, more scale, the ability to drive a return on that overall investment, and continuing to invest in legacy systems or continuing to invest in systems and ecosystems that are bifurcated and maybe nonintegrated is kind of causing them to lose out on the opportunity to improve overall margins.

So the only way that they can continue to improve their margin ability going forward is to look at real technology solutions that afford them that opportunity. Are you guys seeing the same?

Rich: So we are, right? So it's a little bit different. And so for most of our clients and prospects, it's all about digital transformation.

And so you mentioned, you know, legacy systems and things like that. What a lot of our prospects have seen is that they cannot continue the technology's arms race. And so if they can outsource to a proven provider, you know, let that proven provider run the system for them, run the platform for them, help them with their digital transformation so that they can focus on servicing their client, we're seeing that demand.

And even though the market is off, that really hasn't stopped our prospects or our sales pipeline from growing. In fact, it's actually growing, right? Because now the opportunity to cut costs by outsourcing your technology and getting rid of those legacy stacks that aren't helping you build your business or with your advisor satisfaction—

Nick: They're holding you back.

Rich: That's absolutely what firms are saying. And so we think that digital transformation and that strategy to continue to remove your legacy systems, get rid of some costs, focus on your core competency, we see that as a trend that's going to continue for a long, long time.

Nick: I agree with that.

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