RIA Compliance and Practice Management Blog

2022 RIA Tech Survey: Portfolio Management and Reporting Systems

Posted by RIA in a Box

Jul 12, 2022 12:54:41 PM

Outsourcing Portfolio Management for RIA Firms

Registered investment adviser ("RIA") firms add portfolio management and reporting ("PMR") systems to their tech stacks to increase operational efficiencies and strengthen the firm's competitive advantage. Not all portfolio management and reporting systems are built the same, which is why RIA firms must evaluate their business goals and needs before selecting the software that is right for them. Below, we analyze the findings from our annual survey results in response to the portfolio management and reporting systems used by RIA firms, and explore the trends over the years.

RIA Adoption Rate of Portfolio Management and Reporting Systems

The registered investment advisor ("RIA") industry has seen impressive growth over the past few years, particularly in terms of number of registered firms and amount of assets under management ("AUM"). RIA firms add portfolio management and reporting systems to their tech stacks to increase operational efficiencies and strengthen the firm's competitive advantage. Not all PMR systems are built the same though, which is why RIA firms must evaluate their business goals and needs before selecting the software that is right for them. 

RIA in a Box’s annual technology survey revealed 46% of RIA firms report using portfolio management and reporting systems. This marks a slight decrease in adoption year-over-year, and could be due to a shift in priorities and budgeting for RIAs.  This may include a shift in focus toward emerging regulatory priorities, such as the Department of Labor's new requirements on rollovers, cybersecurity risk management and digital marketing.  

Additionally, portfolio management and reporting systems are often one of the more expensive technology solutions within an adviser’s technology stack. The right solution can also deliver a tremendous return on investment by utilizing available integrations and automated features to enhance client experience and streamline operations. 

Portfolio Management and Reporting Software Adoption Year Over Year

2021 Reporting Software (1)

RIA Portfolio Management and Reporting System Adoption by Firm AUM Size

As with many technology solutions used by RIA firms, portfolio management and reporting systems generally show higher adoption rates, as a firm’s AUM increases. What we see in the data is consistent with previous years, indicating new or emerging RIA firms, such as those with less than $5 million in AUM, are the least likely to adopt a portfolio management and reporting system. We have observed the disparity between adoption rates and AUM continues to grow year over year, as adoption rates increase for firms with more than $100 million in AUM and decrease for firms with less than $100 million in AUM. 

Portfolio mgmt 21

The Top RIA Portfolio Management and Reporting Systems

Unlike other investment adviser technology categories, such as customer relationship management ("CRM") software or risk tolerance software, the competitive landscape of the portfolio management and reporting sector remains relatively more fragmented, with no dominant market share leader. Morningstar holds the largest market share at 22% with its Office product, followed closely by Orion and Black Diamond,  (a division of SS&C Technologies). Although we have not observed much movement in the adoption rates of the leading portfolio management and reporting systems, Morningstar, Orion, and Black Diamond continue to improve and distance themselves from the crowded competitive landscape. 

Morningstar Office has continued to grow and remain nimble by offering a wide selection of bundled offerings for small to mid-sized RIA firms. Orion and Black Diamond continue to lead the market for serving larger investment advisory firms. We continue to see a steady stream of new emerging entrants in this category and expect the innovation race to continue as technology providers identify opportunities to cater to RIA firms of all sizes. 

Compared to last year's survey results, Orion's relative market share grew from 19% in 2021 to 20% in 2022. Both Morningstar and Black Diamond showed no changes in market share in the past year. 

RIA in a Box’s annual survey focuses on technology adoption and usage. The survey, conducted in the first quarter of 2022, includes responses from more than 2,000 RIA firms. This proprietary RIA in a Box study is paired with publicly accessible data provided by the Securities and Exchange Commission ("SEC"). The annual study aims to understand different options, which comprise each firm's characteristics, and determine whether specific characteristics impact the growth, size or operational efficiency of RIA firms.   

RiA REPORTING SYSTEMS

Portfolio management and reporting solutions can often be one of the most important technologies for advisers to implement to help guide clients to long-term financial success. The most challenging part is deciding which portfolio management and reporting solution is the right solution for an advisory business given the wide array of benefits and integrations. RIA in a Box integrates with Morningstar Office, Black Diamond, and Orion to provide real-time updates on compliance and registration needs, eliminating the time-consuming demands of tedious manual entry processes.

Stay tuned for more blog posts focused on the core technology solutions available to investment advisory firms. In the coming weeks, we will further explore the top document storage and financial planning software solutions..

 

Topics: RIA Operations, RIA Compliance, RIA Technology

RIA in a Box LLC is not a law firm, investment advisory firm, or CPA firm. RIA in a Box LLC does not provide legal advice or opinions to any party or client. You should always consult your relevant regulatory authorities or legal counsel if applicable.

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