A recent survey shows the use of holistic financial planning software in the USA is rising, as advisors move toward providing a ‘total’ service that extends beyond just picking investments for clients.
The trend toward indexing investments and the emergence of robo-advice are both making investment decisions more like a commodity, where price is the driver. The ability to demand higher-value fees is now with those who can help clients across the entirety of their financial lives.
A recent survey of 5,500 advisors in the US found that 64% are now using financial planning software in their business. Fee-only advisors were the highest users, at 68%, with wire-house advisors the lowest at 44%. Among dually registered advisors 60% were using planning software.
|US Financial Planning Software usage (2019)|
|$200k – $500k||65%|
|$500k – $1m||60%|
|$1m – $1.5m||65%|
|$1.5m – $2m||64%|
|$2m – $3m||61%|
|$3m – $4m||65%|
|$4m – $5m||70%|
|$5m – $8m||70%|
The presence of brokerages/warehouses tends to drag-down the overall usage rates.
Among the brokerage market use of comprehensive planning software is very low. But in ‘full advice’ firms it tends to be very high, being previously reported as being as high as 94%.