Investment Advisor Interests  04/14/2023 NAPA RSS Icon

The Importance of Technology in the Growth of an RIA

By Jon Talamas

The Importance of Technology in the Growth of an RIA

The registered investment advisor (RIA) sector is growing at a rate of about 6.7% year-over-year. Technological tools play a pivotal role in fueling this growth, but it can be hard to figure out exactly what you need in your tech stack as an RIA. Here’s a breakdown of what your RIA tech wish list should include and how each tool can help you run a more efficient business, avoid burnout, reduce paperwork, and make compliance easier.

New Technology to Support RIAs

It’s easy to get lost in an alphabet soup of trending tech acronyms, so here are the ones it’s most important for an RIA to focus on to gain a competitive advantage.


Looking to avoid burnout as an RIA? A customer relationship management (CRM) system may be the first addition to your tech stack. A CRM can handle some of the more mundane yet time-consuming tasks that eat away at an RIA’s day, particularly through automation. Automation for an RIA consists of tools integrating with each other, automatically sharing data, and populating fields you’d otherwise have to fill out by hand.

For example, with a CRM, you can automatically log phone calls and emails you place with clients and leads. Instead of scrolling through your phone or email inbox to figure out the last time you interacted with someone, you can just pull up your CRM. It can show you who you contacted and when, giving you an accurate log of interactions in real-time.

You can then use this data to schedule casual check-ins with clients and consultations and prioritize customer outreach.

Performance Reporting Tools Make Life Easier

Performance reporting tools give you an enormous advantage over other RIAs because they enable you to see and share portfolio performance in a matter of moments. For instance, suppose you get a call from an important client half an hour before a crucial lunch meeting. You answer the phone, and they have a relatively simple yet challenging question: “How is my portfolio doing?”

With a performance reporting tool, you can answer their question in seconds. You simply pull up their portfolio and tell them how their investments are doing. You can also share your screen, take a screenshot and email it, or run a report and shoot the results over—all in time to grab the lobster bisque lunch special.

You can also use performance reporting tools to break down how different classes of investments are doing, identify what’s dragging down your client’s portfolio value, and then use this data to suggest adjustments.

Financial Planning Software Make RIAs More Efficient

Financial planning solutions automate many tasks that make time management for an RIA tough. To illustrate: How long would it take you to perform a comprehensive cash flow analysis for a client that takes dividends on several of their stocks? Financial planning software can do that for you. In addition, you can use it to incorporate other sources of income and then help clients make the best decisions.

For instance, using cash flow data, you can let a client know whether their income will be enough to support their retirement plans. Financial planning software also automatically compares portfolio performance with long-term financial goals. In short, it does many of the complex calculations that devour hours out of your work week.

Cybersecurity Solutions Protect Your Data

RIAs handle sensitive financial information and manage the investments of their clients. As such, they are prime targets for cyber attacks. Cybersecurity solutions can help RIAs protect their clients’ assets and confidential information from cyber threats. Here are some ways that cyber security solutions can support RIAs:

  1. Threat detection and prevention. Cybersecurity solutions can help RIAs detect and prevent cyber attacks such as malware, ransomware, phishing, and other threats that can compromise their clients’ data. With advanced threat detection capabilities, RIAs can identify potential threats and take proactive measures to prevent them.
  2. Encryption. Encryption can help protect sensitive client data from unauthorized access by encrypting it both while it’s being transmitted and while it’s at rest. Cybersecurity solutions can offer encryption solutions to protect sensitive information such as account numbers, social security numbers, and other sensitive data.
  3. Vulnerability assessments: Using a cybersecurity provider, you can perform regular vulnerability assessments to identify and prioritize potential security risks. This helps RIAs understand their vulnerabilities and implement measures to reduce risk.

Trading and Rebalancing Software

Trading and rebalancing software makes it easier to keep clients happy because it automates complicated rebalancing and trade decisions. With this kind of software, you essentially get an automated research assistant and analyst.

For instance, the trading features can alert you to opportunities as well as issues in a client’s portfolio. If a client wants to be alerted before you execute a specific trade, for example, you can set up your software to watch that particular stock. It can then send you an alert when it approaches a key buy or sell level. You then call up your client and tell them what’s going on.

The rebalancing feature can automatically let you know when a client’s portfolio needs to be rebalanced in line with their investment preferences. For example, suppose they want 25% of their portfolio in stocks and 75% in bonds. But the value of their stocks has gone up significantly, and stocks now make up 45% of the value of their portfolio. Your rebalancing software can alert you to this need, help you decide which stocks to sell, and make it easier to get proportions back in line with what your client wants.

Technology plays a vital role in the growth and success of RIAs. From customer relationship management systems to performance reporting tools, financial planning software, cybersecurity solutions, and trading and rebalancing software, technology can help RIAs run their businesses more efficiently and effectively. By adopting the right technology, RIAs can streamline their workflows, reduce paperwork, automate tedious tasks, make compliance easier, and better serve their clients. As the RIA sector continues to grow, embracing the right technology can give RIAs a competitive advantage and help them stay ahead of the curve.