Three in ten millennial advisers (29%) said that they will add new technology over the next 12 months to increase the profitability of their practice.
The fifth annual Advisor Authority study commissioned by Nationwide Advisory Solutions has revealed this.
The study, conducted online by The Harris Poll, involved more than 1,800 registered investment advisers (RIAs), financial advisers and individual investors.
Millennial advisers opting for new technology was roughly three times more than baby boomer advisers (11%).
Similarly, two in ten millennial advisers (20%) said that consolidating existing technology was crucial to improving profitability, around seven times more than boomer advisers (3%).
The study also found marked differences in how technology is used by the younger advisers and their seasoned counterparts, and the type of technology they favoured.
Advisers and their favourite solutions
Regarding the solution they are keen on integrating into their practice, most millennial advisers favoured mobile websites and/or mobile apps (48% vs 23%), tools for risk management, risk monitoring and portfolio stress testing (46% vs 33%), and interactive websites and/or client portals (40% vs 23%).
Around 34% of younger advisers favoured Artificial Intelligence compared to 17% of baby boomers and robo advisers (22% vs 11%).
However, the study also found that millennials and boomers agreed that the addition of new clients was the number-one driver of profitability in spite of differing on the importance of using technology to increase profitability.
While 36% of millennial advisers said that addition of new clients was the top factor for increasing profitability, 29% favoured new technology and 28% said that targeting high net worth clients was important.
For boomers, the top-three drivers of profitability were the addition of new clients (55%), younger generation of clients (30%) and attracting and retaining heirs of clients (28%).
Furthermore, the study revealed that 51% of millennial advisers are expected to target fellow millennial investors, followed by Generation X (26%), Generation Z (10%) and baby boomers (9%).
Around 47% of baby boomer advisers are expected to target fellow baby boomer investors, followed by Generation X (33%), millennials (12%) and Generation Z (1%).
One thing in common is that millennial and boomer advisers agreed that technology would help them understand clients’ current needs and behaviour (30% and 35%) to serve clients.
The study also found that millennials are more than twice as likely as boomers to use technology to create investment strategies for better returns (21% vs 9%).
It said that millennial advisers are more likely than boomer advisers to use AI and/or data analytics to understand client behaviour (18% vs 4%) and robo advisers to provide better service (12% vs 1%).