Billion-Dollar RIAs Drive Expansion with AI
Registered investment advisors (RIAs) with over a billion in assets are scaling artificial intelligence (AI) technology to drive advisor productivity and operational transparency, finds research from Cerulli Associates.
These RIAs are utilizing the technology to combat hurdles in their workplace, including improving data visibility and usage (35%), new client acquisitions (33%), and managing advisor and staff productivity (30%). According to the findings, 61% of billion-dollar RIAs have begun or completed a data project as a component of strategic planning initiatives.
“RIAs investing in data warehouses or other data infrastructure can position themselves for the next stage of growth,” says Stephen Caruso, associate director at Cerulli. “In conversations with acquirers, a robust technology infrastructure can play a significant role in an RIA’s valuation, as many buyers consider investments in firms with an established platform from which to grow. Cerulli anticipates that more firms will take steps to build a data solution that unifies client data and further empowers business intelligence.”
Cerulli envisions long-term usage of AI technology among billion-dollar RIAs. Currently, 70% of RIAs surveyed use AI for notetaking or call documentation, while 25% apply the technology for client engagement tracking, CRM updates, and client meeting scheduling. Half of these plans also say they plan on utilizing it client onboarding.
The findings arrive amid increased adoption of AI technology among RIAs. A study by Schwab Advisor Services found that AI adoption has doubled since 2023, with 63% of independent RIAs now implementing the tool in some capacity.
“Technology plays a crucial role in modern RIAs, and a given firm’s needs often necessitate a multi-layered technology stack,” says Caruso. “While many firms face challenges in adopting technology, the outcomes cannot be clearer for firms that can successfully implement new technology and enhance their operations in some capacity. Investing in these advancements will help RIAs overcome their biggest barriers to growth, unlock meaningful gains in client growth and advisor productivity, and reinforce their competitive edge in an evolving marketplace.”
Amanda Umpierrez is the Managing Editor of 401(k) Specialist magazine. She is a financial services reporter with nearly a decade of experience and a passion for telling stories and reporting news. She is originally from Queens, New York, but now resides in Denver, Colorado.