Whether it’s client onboarding, portfolio management, or financial planning, technology has permeated practically every facet of the wealth industry. With tech solutions seemingly available for every problem imaginable, that begs the question: is the same true for the advisor succession gap?

The answer, according to research from the Technology and Innovation Committee (TIC) at Advocis, is an apparent “no” – or at least, not quite yet.

In a 2022 survey of Advocis members, the TIC asked what daily activities of theirs are not being adequately addressed by a tech solution. Among the activities identified, the leading answer was “Emergency transition and/or succession planning,” cited by more than 40% of the respondents.

Why tech isn’t on advisors’ succession-planning radar

According to TIC Vice Chair Brandon Chapman, part of the problem comes down to a lack of demand.

“A large chunk of the advisor population has been around for a while, and they’re not necessarily that interested in technology,” Chapman (pictured above, left) told Wealth Professional. “Why would the market build something for someone that doesn't want it? So the biggest issue I think is those decision makers aren't necessarily looking for a tech solution to the succession challenge; they just want a solution.”

Chapman says tech providers generally are spending their time and efforts on younger advisors. They're looking to build software that'll be around for 10 to 30 years which can provide them with long-term recurring revenue – something that succession doesn't necessarily lend itself to.

There are already platforms on the market that allow senior advisors to connect with junior advisors who might be able to take over their book of business, like FindBoB. But as Chapman emphasizes, that's not all there is to succession.

“We also need to consider the workflow of the senior advisor working with the junior advisor, and how technology can help them make that transition from one advisor to the next smooth, as well as maintaining the relationship,” he says.

A give-and-take between veteran and emerging advisors

In many instances, that baton pass entails a significant amount of joint field work and casework. Herman Chan, chair of the TIC, says technology can also be leveraged in that area.

“The emerging advisor can use technology to help with the onboarding and discovery process, and also do some of the planning,” Chan (above, right) says. “After the grunt work of data gathering and analysis is done, the experienced advisor can demonstrate their value through the client interactions where they share recommendations on solutions and courses of action, and then helping the clients to follow through.”

Chan also suggests a divide-and-conquer strategy, whereby seasoned advisors can work with sophisticated higher-revenue clients while emerging advisors can cut their teeth on smaller accounts.

Senior advisors bring a massive cache of wisdom to the table, but a tech-savvy junior advisor can also be worth their weight in gold it comes to succession. Chapman is currently working with an older advisor he's known for about 6 years, who wants him as his successor.

Upon finding out that the veteran still keeps his client files in filing cabinets, Chapman recruited a team member to scan the files and migrate them into Sync, a digital solution he is using, so that everything will be easier to manage when the book transitions over. He also highlights SideDrawer, another document management solution, as an alternative.

“He's also now using AdvisorFlow, a client onboarding solution I developed, with his client reengagement. So his client files as well as his client data are getting organized,” Chapman says. “The financial planning software he was using is also getting decommissioned this year, so now he's looking at Planworth, the software I'm using. We’re really streamlining how he was doing his business with how I'm running mine so that as client relationships transfer over, it'll be a seamless shift.”

Kickstarting tech for succession

For any planning process, having a long runway makes a big difference towards ensuring success – and that means taking the first step early. But when it comes to using tech solutions in their practices, having to learn new software emerged as the biggest factor holding back respondents to the TIC’s survey. While Chan understands the trepidation among some older advisors, he also encourages them to get started.

“There are solutions out there that have been designed with busy advisors in mind. Advisors can take advantage of the combined knowledge of the Advocis Technology and Innovation Committee; we've got people from coast to coast and different backgrounds; some of us are in the industry as field leaders, some run fintech firms, and some are advisors.

“For many seasoned advisors, a great way to start is to set up a client relationship management [CRM] system,” Chan says. “By organizing, segmenting, and clustering their client base, they can get a clearer picture of what their book looks like, and where they should focus their attentions as they delegate to an emerging advisor.”