Registered investment adviser (RIA) firms invest in financial planning software to simplify essential tasks, including cash flow analysis, long-term planning, and tax strategy plans. RIA firms must evaluate their firm's needs before selecting the software that is right for them, as the options for financial planning software are numerous and varied. In this blog post, we explore the RIA in a Box annual survey results in response to financial planning software systems used by RIA firms.
RIAs Offering Financial Planning Services by Firm AUM Size
The bar chart below shows an increase in the number of firms offering financial planning services as the size of an investment advisory firm increases, as measured by regulatory assets under management (AUM). To no surprise, this trend is also apparent when we study the adoption rate of financial planning software based on a firm's AUM.
Our survey findings indicate 43% of RIA firms use financial planning software. As the chart below reflects, the industry's financial planning software adoption rate has remained relatively consistent over the past five years.
Financial Planning Software Adoption Rate Year Over Year
Top Financial Planning Software Systems Adopted by RIA Firms
Since we first discussed the five key components of RIA financial planning software tools in 2015, eMoney and MoneyGuidePro continue to be the financial planning software industry leaders, as measured by market share. The dominance of these two industry leaders appears to be slowing lightly. In recent years, MoneyGuidePro and eMoney had a combined financial planning software market share of 77%.
However, our most recent survey results show they have decreased to a 69% combined market share today. It's also important to note that MoneyGuidePro (acquired by Envestnet in March 2019) and eMoney (acquired by Fidelity in February 2015) are now part of larger investment adviser industry conglomerates.
We should also note that since its founding in 2014, Right Capital has continued to see success in the financial planning software category, and now it's in third place with 11% market share. This is quite the rise over the past two years for Right Capital which sat at less than 5% market share in our 2017 survey.
This blog post is the fifth of several to explore technology adoption and usage from the findings from our annual survey of more than 2,000 RIA firms. This proprietary RIA in a Box study was conducted in the first quarter of 2022 and is paired with results from past surveys, as well as publicly accessible data provided by the Securities and Exchange Commission (SEC). The goal of our annual study is to understand different options which comprise each firm’s characteristics, and to determine whether specific characteristics impact the growth, size or operational efficiency of an RIA firm. Our previous posts include discussions on findings on portfolio management styles, portfolio management systems, CRM providers, and risk tolerance software.