Tax, Estate Planning Drive Next Wave of Advisor Technology
Wealth management firms are expanding beyond conventional portfolio management to meet client demand for sophisticated financial planning, driving rapid adoption of specialized tax optimization and estate planning technology, according to new research from Boston-based consulting firm Cerulli Associates.
The shift comes as financial advisors broaden their service offerings to capture wealthier client demographics. According to the firm’s latest report, Cerulli Edge—The Americas Asset and Wealth Management Edition, financial advisors now offer an average of 7.6 distinct services. However, the breadth of these capabilities remains heavily tied to client affluence, forcing practices aiming for higher-wealth tiers to implement more comprehensive planning suites.
“Serving affluent clients requires increasingly sophisticated advice capabilities,” said Michael Rose, director at Cerulli Associates. “Advisors moving upmarket must be able to offer clients income tax planning, estate planning, charitable planning, and more.”
To support these complex offerings, wealth managers are significantly upgrading their technology stacks. While 55% of advisors currently provide trust and estate planning services and 40% offer income tax planning, a substantial wave of technology adoption is imminent.
Cerulli’s research reveals that 47% of advisors who do not currently use portfolio tax optimization software expect to integrate it within the next 12 months. Similarly, 37% of advisors not currently using specialized estate planning technology plan to adopt such solutions over the same timeframe.
“The increased emphasis on technology among more financial-advice-oriented advisor practices is not surprising,” Rose added.
Cerulli projects that holistic financial planning will remain a primary catalyst for technology investment across the wealth management industry. As firms strive to deliver customized advice at scale, tax optimization and estate planning software are expected to lead future software integration and budget allocations.