Technology adoption has become a sink or swim situation for financial advisors. Innovations are shaking up many of the traditional areas of financial management largely due to the demands of tech-savvy consumers and changing the face of the financial services industry.

FMG Suite’s VP of Corporate Development, Rick Fox, recently moderated our webinar, “Growing AUM Through Digital Marketing.” The webinar was created to discuss some of the opportunities and challenges currently facing the financial services industry. The interactive seminar resulted in some insightful feedback from a variety of participants, ranging from company presidents to marketing and media specialists.

This is the first installment of our five-part series, where we go in-depth about the webinar and how financial advisors can take this information to improve their business.

From technology adoption to social media, financial advisors today find themselves at a digital crossroads of sorts. These advisors see the changes that are rippling across the financial services industry, and while most understand that these changes are inevitable, too few of them know how to make the necessary adjustments. The webinar opens with a discussion of one of the more pressing challenges facing financial advisors:

How important is ease of use when it comes to a company-wide technology adoption and what makes it scalable?

Simplicity vs. Functionality

I think all of us are better off finding a core set of needs, and what tools will work for those core sets of needs, and then actually placing simplicity filters on top of anybody that you are investigating, and then allowing simplicity to rule the day.”

Andy Barksdale, Senior V.P. of Marketing at LPL Financial

The financial services consumer is all too ready to embrace new technologies, and smart financial advisors understand that they must learn the most effective ways to meet the needs of this “new” market. Advisors who fail to realize this impending reality will find themselves steadily losing market share to their more technologically advanced competitors. Even for financial advisors ready to adopt new technologies, there remains the challenge of implementing that technology effectively.

There’s no shortage of sources promoting the benefits of technology for financial advisors, but there are very few resources that explain how advisors can adopt these solutions to realize the benefits. Despite the introduction of new software, apps, and technology, adoption among financial advisors simply isn’t where it should be.

Today, only two out of five financial advisors are implementing technology throughout their businesses. Moreover, the use of technology in advisory firms has grown to 40% of firms as of 2017, an increase of only 10% since 2014. (Forbes, 2018)

Much of this hesitation to embrace technology comes from the often large gap between simplicity and functionality. Most financial advisors would welcome the most advanced technology and the potential benefits, but they fear that putting the technology into practice will be too difficult. Few of us get the most out of the latest smartphone technology, yet we, too, often can’t resist that cutting-edge functionality.

The same is true when it comes to new financial advisor solutions, but the financial services industry faces many more obstacles that impede adoption. These obstacles make it harder for advisors to realize a return on the investments they make in the latest technology. Too often after a firm integrates new technology, advisors have to figure out how to use it with very little support. They’re left holding a highly advanced, multi-function piece of software, but they can’t use it.

Thomas Fross, President of Fross & Fross Wealth Management says,“… Simplicity means everything. Our team is already busy in doing the mundane normal things that they normally do in their practice, so if it becomes too complicated they’re just going to not do it.” As tech startups continue to bring down the cost of their financial services apps and other programs, the pressure for traditional financial advisors to get on the technology bandwagon mounts. To catch up quickly, advisors may want to forego all those enticing bells and whistles and just get started with the technology solutions that they can implement and use as soon as possible.


Financial advisors must realize that even well-balanced technology that offers essential benefits and ease of use doesn’t necessarily translate into increased capabilities. This disconnect between implementation and capability occurs because the efficiency of how different pieces of technology and different users interact just isn’t there. Using the best technology is often more limited by these gaps in connection than with the actual technology.

When it comes time to “scale” several elements of technology, the disconnect between one element and another can render all that new technology unusable. Even adopting a single technology solution can be challenging, especially if that solution features a significant degree of functionality. The challenge comes from not understanding how the adopted technology will affect different areas of operations. The latest and greatest technological advances for the financial services industry may add functionality in one area but create increased stress or even less capability in other areas.

Contributing to these adoption and scalability challenges is the sheer amount of new technology that is available to financial advisors. The handful of technology elements available a decade ago were typically aimed at a specific task like executing trades and featured limited functionality. With these single-function solutions, it was easy to get everyone in a firm onboard, even if the technology had a steep learning curve. Today, the available choices of different technologies alone can cause “technology paralysis” and leave many financial advisors hesitant to adopt any technology at all or abandon the technology they already have.

Throw in the inherent learning curve and the disconnect between different technology solutions, and the idea of scaling even the most well-designed technology seems all but impossible. It’s no wonder that many financial services firms and advisors often find themselves struggling to coordinate even fundamental technology solutions, like client experience solutions, mobile connectivity, and cybersecurity.

Beware the Bell Curve

“So, I think probably the biggest challenge and the biggest area where we focus  when we are making a transition to new technologies is on communication and training and making sure that people understand why you are doing this, how it’s going to benefit them, and then actually helping them implement it.”

Brian Cody, VP of Digital Media, Waddel & Reed

Implementing and scaling new technology means understanding how that technology will be used and how different users will adapt. Learning how to use new solutions will pose different challenges to different users, from those who are simply disinterested to the users who are ready to embrace the opportunity.

Originally, the Diffusion of Innovation Theory (DOI) was created to explain how populations adopt new technologies and innovations. This widely used social science resource has been utilized across industries to help introduce unfamiliar technology and innovative products better. But the DOI also applies to technology adoption at the enterprise level.

The DOI theory categorizes the five levels of innovation adoption, applicable to both teams and individuals within an organization. These insights can make choosing the right technology easier for financial advisors because they will have a deeper understanding of how the choice will be received. Being able to know the likelihood of adoption by understanding the end-users will also help determine the scalability.

Regarding enterprise applications, these five categories describe departments within an organization as well as the individual user:

  • Innovators (2.5% of a population). Innovators are the visionaries who are willing to try new ideas and aren’t typically averse to risk. These are the users who will actively promote new solutions.
  • Early adopters (13.5%). These are the thought leaders and change drivers within an organization. They may not champion new technology as much as the innovators, but they’re comfortable with change and are inclined to help implement changes once on board.
  • Early majority (34%). These individuals are typically concerned with the benefits of a new solution, particularly the “bells and whistles.” They aren’t overly concerned with how the new technology will be implemented, but they are more than willing to jump right in.
  • Late majority (34%). Skeptics when it comes to most innovation, this population waits until a larger population adopts technology solutions before they are willing to invest their time and effort.
  • Laggards (16%). Every organization has individuals that resist any type of change. While it may be tempting to simply bypass this group when adopting something new, not having these “laggards” on board can affect adoption throughout the organization.

The success of new technology for financial advisors will often depend on the mindset of the people who will be using the technology. Understanding that mindset in individuals and teams will go a long way toward not only selecting the right technology to implement but also the implementation itself. An excellent way to determine these mindsets is to categorize the end users of any new technology solutions using the DOI theory to help define which solution will be the best fit.