Escalating Technology Investment Without ROI Clarity

Definition

Wealth advisors face a paradox: they must invest heavily in technology to remain competitive, yet these investments have not meaningfully improved the cost equation or profitability. PwC notes that 'even as asset and wealth managers increase investment in technology, the cost equation remains punishing.' AI and automation capabilities remain in early development stages with limited proven ROI. For small advisors, this creates a capital allocation dilemma: technology spending (software subscriptions, infrastructure, cybersecurity, compliance tools) represents 8-15% of operating budgets, but productivity gains are difficult to quantify and often take years to materialize. Small firms lack IT expertise and economies of scale to evaluate and implement complex systems, making them vulnerable to overpriced, poorly-fitting solutions. Legacy technology stacks become increasingly expensive to maintain while new platforms require substantial switching costs and staff retraining. The risk: technology spending creates cash flow drag without delivering promised efficiency gains.

Why This Matters

Low-code/no-code platforms for advisors, SaaS solutions with transparent ROI metrics, technology consulting for implementation, industry-specific stacks pre-configured for wealth advisors, outsourced technology management, technology evaluation/selection services

Affected Stakeholders

Owner-Advisor, Small wealth management firms

Related Business Risks