HAL 9000 is just around the corner.
The lean economy is accelerating the development and dependence on technology for many business sectors—and RIAs are no exception.
The release of the latest results of the 2012 Scottrade Advisor Services Study, commissioned earlier this year, finds technology adaptation and incorporation was topped only by client acquisition, preparing for new regulations and advising in a volatile market as a major challenge for advisors. The first three, however, are ongoing and reactionary challenges an advisor must do to keep his business afloat, while technology appears for the first time.
"It's about controlling what you can, and preparing for what you can't," Brian Davis (left), director of Scottrade Advisor Services, told AdvisorOne on Friday (also see "The Spirit of Scottrade," Investment Advisor magazine's July 2012 cover story). "Advisors can't control the market, but they can control being in front of clients and creating proper expectations with the clients. They rank having the right back-end resources and technology to spend more time with clients as a top business challenge. What technology does is give them back the commodity of time."
As for the clients themselves, market volatility has left many investors with more questions than answers, particularly for younger investors. Despite having the most time until retirement and the highest tolerance for risk, RIAs report that the majority of Generation X (ages 29-44) and half of Generation Y (ages 18-28) clients are maintaining their investment risk profile. The study also found two-thirds of advisors are telling Gen X clients and three-fourths of advisors are telling Gen Y clients they will need at least $2 million saved in order to retire.
