NFP Advisor Services Group Publishes Aite Study on Advantages of RIA Technology Integration

Study Finds Integrated Platforms can Boost Advisor Revenues by up to 30%

Sep 26, 2011, 08:30 ET from NFP Advisor Services Group

NEW YORK, Sept. 26, 2011 /PRNewswire/ -- NFP Advisor Services Group today published the results of a study examining the impact that outsourced technology integration can have on the business of Independent Registered Investment Advisors (RIAs).  NFP Advisor Services Group serves financial advisors and is a business segment of National Financial Partners Corp. (NYSE: NFP), a leading provider of benefits, insurance and wealth management services.  

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The study, commissioned by NFP Advisor Services Group and produced by leading independent research firm Aite Group, concludes that outsourced technology integration tools, such as NFP Advisor Services Group's multi-custodian IndeSuite(SM) platform, provide significant benefits to RIAs, including improved productivity and efficiency, that can boost advisor revenues by up to 30%.

James Poer, President of NFP Advisor Services Group, said, "Against the backdrop of an increasingly competitive wealth management environment, it is more important than ever that RIAs operate lean, efficient businesses that allow them to focus more of their time on client service and prospecting.  As this study clearly demonstrates, an integrated technology platform is an extremely valuable tool that lets RIAs streamline operational processes and maximize productivity."  

The study results demonstrate that, despite the wide range of business applications required to operate their businesses, RIAs' current level of technology integration across applications averages below 50%.  Without a fully integrated platform, advisors sacrifice two days per week, on average, for operational tasks such as data reconciliation, performance reporting and fee billing.  Supporting advisory staff lose even more time without integration, spending three times as many hours on operations as on client acquisition and prospecting.

In a fully integrated environment, the time spent on operations can be reduced by almost one full day per week for advisors and by 40% for support staff, freeing employee capacity for productive relationship management and business development.

Because larger firms employ more support staff, inefficient operations pose an even greater burden on RIAs once they reach a certain size.  Firms with assets under management between $100 million and $500 million could regain an average of 114 days of time previously allocated to operational activities from supporting advisors when they move to a fully-integrated technology environment.

Mr. Poer added, "Underscoring our long-standing commitment to serving the independent RIA marketplace, last year NFP Advisor Services Group launched a turnkey solution – IndeSuite – to satisfy unmet advisor integration needs.  The multi-custody IndeSuite platform integrates operational technologies for processing new business, servicing accounts, managing client data, tracking compensation and other vital day-to-day functions for broker-dealer and RIA business within a single, easy-to-use dashboard.  With this tool, RIAs are able to leverage the full potential of their existing resources to achieve competitive performance and scalable growth."

Additional highlights from the study include:

  • RIAs have put increasing the level of integration among the top three spending items related to technology. The need for integration increases sharply once an RIA has surpassed $100 million in assets under management.
  • Moving from an average level of technology integration to a fully-integrated environment could allow an RIA firm to reallocate the equivalent of five weeks per staff member annually from operational tasks to client acquisition and prospecting.
  • In order to increase integration, RIAs have to change the way they source technology, as the a-la-carte approach often practiced by RIAs can lead to inefficiencies.  As RIAs lack the expertise and technology budget to conduct technology integration efforts, leveraging the pre-integrated platform offered by outsourcing providers is the most realistic way for them to obtain a fully-integrated technology environment.
  • RIAs that opt for an outsourced operating model need only half the operations staff of RIAs with an in-house model. They can significantly reduce the time required to perform processes like data reconciliation and fee billing.  An outsourced model can reduce the time it takes to send out client bills by one week.
  • The outsourced model allows RIA firms to reduce the costs spent on hardware, maintenance, and data backup by 72%. Leveraging the capabilities of an outsourcing provider can also mean improved data security and disaster recovery.

To view the complete results of the study, please click here.

About the Study

Aite Group's independent study - RIA Technology Integration: The True Opportunity Cost of Inefficiency - is based on the results of a March 2011 poll of 146 RIAs, approximately two-thirds of whom employ a hybrid model rather than a traditional, fee-only business.  At least 15% of participants were included in each of the following levels of assets under management: less than $30 million, $30 million-$99 million, $100 million-$499 million, $500 million-$999 million, and more than $1 billion.  Participants were asked a series of questions related to: (1) the current business application and personnel requirements of their operations; (2) their levels of, need for and scale of potential benefits from business application integration; and (3) the financial and operational value of outsourcing for their businesses.

About NFP

National Financial Partners Corp. (NYSE: NFP), and its benefits, insurance and wealth management businesses provide diversified advisory and brokerage services to companies and high net worth individuals, partnering with them to preserve their assets and prosper over the long term.  NFP advisors provide innovative and comprehensive solutions, backed by NFP's national scale and resources. NFP operates in three business segments.  The Corporate Client Group provides corporate and executive benefits, retirement plans and property and casualty insurance.  The Individual Client Group includes retail and wholesale life insurance brokerage and wealth management advisory services.  The Advisor Services Group serves independent financial advisors by offering broker-dealer services through NFP Securities, Inc., a subsidiary of NFP and member FINRA/SIPC, as well asset management products and services.  Most recently NFP was ranked as the eighth Top Global Insurance Broker by Best's Review; operated the third largest Executive Benefits Provider of nonqualified deferred compensation plans administered for recordkeeping clients as ranked by PlanSponsor; operated a top ten Independent Broker Dealer as ranked by Financial Planning and Financial Advisor; had four advisors ranked in Barron's Top 100 Independent Financial Advisors and is a leading independent life insurance distributor according to many top-tier carriers.  For more information, visit

About Aite Group

Aite Group is a leading independent research and advisory firm focused on business, technology and regulatory issues and their impact on the financial services industry. It was founded by leading industry experts in Banking and Securities & Investments. Aite Group brings together a team of business strategy, technology and regulatory experts to deliver comprehensive, timely, and actionable advice to financial institutions and technology vendors.

SOURCE NFP Advisor Services Group