Top 7 Software & System Integration Challenges for Registered Investment Advisors

The wealth management industry, specifically RIAs (Registered Investment Advisors), is fast-paced and highly competitive. Investment firms need to focus on delivering not only investment results but also an outstanding client experience.

The 2024 Franklin Templeton Survey analyzed 150 RIAs to identify trends in IT modernization, technologies, and client expectations, especially regarding acquiring and managing complex, diverse client accounts.

Four of the study’s core findings are:

• 85% of RIAs see a critical or moderate need for technology to improve day-to-day client service activities and communication.
• 79% of RIAs agree that an RIA firm’s digital infrastructure is increasingly important in hiring and retaining first-rate professional talent.
• 89% of RIAs agree that a high-quality digital experience is an important competitive differentiator.
• 71% of RIAs plan to make a moderate or aggressive investment in client onboarding and account holdings data management technology over the next two years.

The reality is that many RIAs use outdated solutions that cause trouble not only for clients but also for their daily back-office work or even their core business of managing investments.

In this guide, we’d like to share the most common software and IT challenges that RIAs face and how to solve them in a sustainable and cost-effective way.

Why Should You Trust In Our Financial Industry’s IT Expertise?

Before discussing the challenges RIAs face, we’d like to provide some background information on our industry know-how and expertise.

At Euvic, Inc., we specialize in working with financial services institutions like banks, fintechs, and wealth management companies, including RIAs, OSJs, brokers/dealers, etc. We’ve been in the business since 2005, boasting almost two decades of experience plus hundreds of successful client case studies. We know your challenges and have the solutions.

Companies like Private Advisor Group trust in Euvic’s expertise: A major financial advisory firm with $29 billion AUM. Private Advisor Group supports over 750 independent advisors across the U.S. and is ranked #8 by Barron’s Top RIA Firms.

The Private Advisor Group Case Study explains how we helped them modernize their IT landscape to increase their productivity by up to 300%.

The backbone of our US-based office is a global team of 5,000+ A-player engineers, primarily based in Poland. Combined with our 100+ managed expert teams, we have a unique combination that gives you a competitive advantage. Our local US leaders have many years of experience partnering with financial service firms to deliver on their most ambitious goals, leveraging modern technology solutions.

Top 7 Challenges for RIAs & Leveraging Software to Solve Them

Working closely with financial service institutions and RIAs, we’ve identified their biggest challenges and developed tailored solutions. Eliminating bottlenecks first is the most cost-effective way to increase productivity and profitability.

This can usually be achieved through system integration of existing software solutions and technologies. We can help you modernize your entire IT landscape to increase efficiency, productivity, and service quality. As a result, you will lower your cost, improve performance internally as well as for your advisors and customers, and gain a competitive advantage.

1. Challenge: Accessing Data Across Multiple Custodians

Accessing and managing data sources from multiple custodians like Fidelity, Schwab, Pershing, LPL, etc., is often a manual process that generates friction in daily operations. As a result, analytics and reporting are bothersome activities that could be improved by system integration.

Standardized formatting and data structure with integrations to major custodians can be a game-changer in terms of workflow efficiency, internal productivity, operational costs, and client experience and satisfaction.

Another benefit is improved data accuracy and overall simplicity, leading to improved compliance with regulatory requirements. We’ve successfully executed system integration projects for RIAs, increasing overall business success and future-proofness.

2. Challenge: Calculating and Distributing Advisor Compensation

Registered Investment Advisors usually compensate their advisors based on performance. The calculation is often executed manually, which is time-consuming and prone to miscalculations, delays, and frustration for all parties involved.

To solve this challenge, in-depth expertise in the industry, reliable and compliant systems, and overall experience are required. Our US-based IT experts have built custom platforms for our RIA clients to quickly and accurately determine advisor payouts with a high degree of automation.

We’ve got experience building platform solutions that can be equipped with rules and algorithms to calculate compensation based on your inputs and are fully integrated with the accounting, payment, and other systems you are currently using.

The benefits are clear: We’ve saved hundreds of hours of manual work, reduced painful calculation errors, and provided quicker and more accurate payment turnaround times.

3. Challenge: Inefficient Back Office Systems & Workflows

The back office experience at RIAs is often not the most user-friendly. A cluttered, siloed software landscape causes headaches for the entire administration team. This is a common issue leading to a loss of productivity. Improving these admin workflows can help you free up valuable time dedicated to serving clients and growing the business.

Typical back-office work includes advisor onboarding, tracking and improving advisor productivity, overviewing client data, and managing operations. Our experts are familiar with most established software solutions and have successfully built systems to integrate, enhance, or expand your software solutions. Our custom solutions improve the overall automation-score and help increase productivity.

Our clients can expect a fully integrated system landscape with a seamless workflow, increasing productivity. Investing in efficient backend operations will also enhance advisor retention, simplify recruiting and onboarding new talent, and increase profitability and client satisfaction.

4. Challenge: Responding to Regulatory Requests Quickly

Compliance and regulatory changes are a big challenge for RIAs, especially since they need to register with the U.S. Securities and Exchange Commission (SEC) or a state regulatory agency, depending on the value of assets under the RIA’s management. 

Staying up to date with changing regulations and compliance guidelines requires efficient internal communication structures so advisors can stay up to date.

We’ve built a custom operations platform that provides full visibility and interactivity alongside user/advisory management.

Advisors automatically receive updates, and company-wide compliance can be ensured. Using our solution, you can proactively capture and manage regulatory and compliance requests, reducing risk and turnaround time to respond to regulators.

5. Challenge: Legacy Systems Slowing Down Innovations

Outdated software and IT solutions, often referred to as legacy systems, pose a threat to your entire company due to end-of-support/maintenance, disparate systems, and siloed data, among other reasons.

A lack of modernization of legacy systems will eventually lead to increased costs, safety issues, and user/advisor pain.

Technical debt and outdated infrastructure lead to increased costs and user pain. Our legacy app modernization teams boast experience in custom software development, cloud migration, and integration for financial companies.

Besides the mentioned issues, a lack of system modernization can prevent your company from innovating, which could ensure your future success and guarantee a competitive advantage.

We understand your needs and know how to move your IT to the next level. From automation to improving user experience, our experts have done it before, and we can show you examples of successful modernization and innovation. Schedule a free meeting with our consultants!

6. Challenge: Missing Approach for Leveraging AI/ML Technology

While legacy system modernization is the first necessary step of removing old software and replacing it with new, up-to-date solutions, there are further levels of optimization to achieve.

AI/ML technology provides new opportunities for RIAs, helping them gain a competitive edge. But without in-depth knowledge and practical experience, it’s nearly impossible to access these opportunities.

Our AI experts are at the forefront of technology and can apply the newest opportunities to your business while ensuring regulatory compliance. We conduct workshops to get your team involved and train them to work with the newest AI models and tools for your daily RIA operations.

AI technologies can help you enhance workflows, automate tasks, and improve internal and client experience. Leverage our expertise to reduce costs, drive efficiency, and stand out as an innovator in your industry.

  7.  Challenge: Keeping Up With Cyber Security Best Practices

Wealth management companies, including RIAs and all other financial industries, are among the most attractive targets for cybercriminals. With the number of attacks on financial institutions increasing yearly, cyber security is becoming a more important topic than ever.

Managing client wealth is challenging, but carrying the liability for the client and your reputation is an even more significant burden.

Not having the latest cybersecurity standards in place can leave you vulnerable to threats that can compromise client data and cause a massive loss.

Our cyber security experts are at the forefront of technology and ready to equip you with the latest tools and methods for higher protection against attacks.

Now is the Right Time for RIAs to Level Up their Software Systems & Gain a Competitive Advantage

The Templeton study revealed that leveraging software solutions is one of the most crucial factors for Ria’s current success.

The first part is removing bottlenecks in your workflow productivity, back office, and client management. This can be achieved through system integration and overall IT modernization.

Once you’ve established a strong foundation of your software landscape, you can increase performance, which is when the innovative work starts: Leveraging AI and ML, implementing modern fintech solutions and live connections, setting up client dashboards, improving your customer experience, and streamlining internal matters.

We’ve done it before, proudly presented on our case study overview page, giving you access to proven knowledge and experience.

Why reinvent the wheel? Talk to our specialists. Reach out for a free consultation.