For advisors, automation and multi-custodian relationships are keys to growth

investmentnews.com:

Independent financial advisors view robust technology and multiple custodial relationships as crucial to their firm’s growth, while business expansion is their primary challenge for 2024, according to a new survey by Interactive Brokers.

A strong majority of advisors in the 2024 Interactive Brokers Advisor Insights Survey believe automation significantly enhances their client interactions, with 79 percent of respondents agreed that automation frees up more time to build client relationships. Additionally, 60 percent mentioned that automated processes help new team members acclimate faster, and 58 percent noted that automation in account management reduces overhead costs.

“Automation in day-to-day operations makes processes more efficient, so advisors have more time for clients and cultivating new relationships,” Steve Sanders, executive vice president of marketing and product development at Interactive Brokers, said in a statement Thursday. “Advisors want robust technology that keeps costs low so they can manage their firms the way they want.”

The survey found that 65 percent of advisors seek increased automation in client account management tools, particularly in new account openings and client onboarding. They also believe that client reporting and portfolio management could benefit from more automation.

Advisors are increasingly adopting a multi-custodial model to better serve their clients. Client preferences, service availability, and diverse investment product offerings were cited as the main reasons for this approach. The survey showed 64 percent of advisors use at least two custodians, including 34 percent who employ three or more. Moreover, 60 percent of those using only one custodian expressed openness to