Fintech Keeps Solid Hold in Financial Advisories, Study Says

Most financial advisors are all in with fintech.  

That’s one finding of the most recent ISS MI Market Metric Fintech Study, in which 95% of  responding financial advisors told the pollster that they use fintech for trading, clearing, portfolio rebalancing and investment analytics. Only 3.8% said they don’t use fintech for those tasks. 

Fintech includes artificial intelligence, blockchain, cloud computing and big data.   

Relying on fintech for investment analytics is not as popular with advisors, according to this study, in which 26% of the respondents employ asset management software, while 41% select third-party software to handle the task.  

“Despite that heavy usage, there is seemingly little room for third-party fintech providers to offer their services, as over three-quarters of advisors reported using software provided by a home office for trading and clearing,” ISS researchers said in a press release. 

In this set of data, BlackRock emerged as the most popular provider of investment software, offering their products to more than a quarter of respondents.  

BlackRock is also the largest issuer of ETFs, whose total ETFs under management accounts for over $2 billion, according to etf.com data. Those include 411 ETFs traded in the U.S., and the iShares Core S&P 500 ETF IVV, is the largest, with $343 billion in AUM.  

Vanguard, the second-largest ETF issuer, stood out as the most popular manager for direct indexing software. 

One in five surveyed advisors described Vanguard’s platform as the best, according to the ISS press release.  

Direct indexing is becoming more popular with advisors because it allows them to customize ETF holdings for their clients, especially for high –net worth clients. Asset managers have noticed that their software for direct indexing and portfolio construction is solid, with 24% and 29% of advisors, respectively, using their software. 

Follow Michelle Lodge on Twitter @lodgemich