CHICAGO – January 18, 2024 – F2 Strategy, a leading wealth management technology services company, has today released its fourth annual Wealth Tech Outlook Report. Over the past 12 months, as part of this process, F2 Strategy interacted with 85 RIAs, wealth managers and asset managers collectively overseeing $61 trillion in assets under management (AUM). The overall aim was to evaluate the industry, pinpointing strengths and weaknesses in technology adoption while establishing an outlook for the year ahead.
The research delved into critical aspects such as financial planning, custody and the utilization of artificial intelligence (AI) in 2023. Additional data was gathered on firms’ planned activities for the coming year, offering insights into the dynamics of ongoing growth and change. After a busy year for wealth management mergers and acquisitions (M&A), the breakneck pace of aggregation looks set to continue into 2024, with technology central to the conversation.
“The swift expansion, or indeed aggregation, of firms brings forth operational challenges that may result in compliance and legal issues,” remarked Doug Fritz, co-founder and CEO of F2 Strategy. “Technology stands as a linchpin in this transformative journey, now acknowledged as essential to business strategy and deeply woven into strategic plans.”
Below are three key trends uncovered and a brief outlook on how they might shape 2024. Individual trend reports can be found at f2strategy.com/insights.
- Majority of wealth management firms have an AI project in the works today. Wealth management firms are increasingly exploring AI applications for client experience, efficiency and growth, with a notable portion currently utilizing optical character recognition (OCR) or predictive analytics. While AI impact to date has been small and exploratory, firms are poised to expand beyond initial experiments, anticipating both successes and failures as the industry embraces more advanced AI projects.
- Third-party data delivery tools bring more satisfaction than native tools. In 2023, less than half of firms were satisfied with their custodian’s native data download tool, prompting firms to seek innovation from third-party tools rather than relying on unsatisfactory custodian-native options. As a result, 2024 presents an opportunity for wealth management firms to push custodians toward innovation, advocating for the delivery of data in more modern and efficient formats, moving away from outdated legacy file delivery methods.
- Nearly eight in 10 wealth management firms use two or more planning tools. In 2023, without a universal financial planning technology solution, firms resorted to using multiple tools to fulfill their needs. This poses integration challenges, since financial planning is not part of the overall experience if more than one tool is being used. Until this change in approach to technology is implemented, financial planning will remain an add-on to advisors’ core responsibilities.
To download the report in full, please visit f2strategy.com/report/2024-outlook-report and for more information about F2 Strategy, visit f2strategy.com.
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About F2 Strategy
F2 Strategy is a leading wealth management technology services firm helping complex RIA, wealth, bank/trust and family office firms improve their technical capabilities to build exceptional client and advisor experiences. Led by former executives of a wide range of top-rated wealth firms and family offices, F2 Strategy combines their results-driven management strategy with industry-leading, proprietary research to create customized high-tech solutions. A diverse, creative, and people-centric company, F2 Strategy believes the right technology has the power to support, elevate, and empower us all to reach the highest level of fulfillment. F2 Strategy was founded in 2016 in San Francisco.
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