A rundown of the key findings and overall themes of InvestmentNews' flagship adviser technology benchmarking study, addressing the driving factors behind how and why firms invest in technology, the factors they weigh the closest in making those key decisions, and the strategies they implement to better their firms. InvestmentNews Research collected firm-level data from over 300 independent advisory firms in December 2014 - January 2014. Firms submitted truncated P&L data, including measures of operating expenses, profits, revenue, assets, client and staff. "Top Performers", or the most profitable and productive firms, and "Innovators", the firms who utilized the most technology at their firms, were identified as cohorts used to benchmark the industry.

1. InvestmentNews 2015
Adviser Technology Study
Top-line Results and Key Findings

2. Study Overview
• Survey fielded from November 20, 2014 – January 12, 2015
• Responses from over 300 firms
• Requested top-line financials for 2013 and estimated 2014
• Seeks to identify how financial advisers align their technology needs
and investments with their firm goals.
• Benchmarks the practices of the best-performing firms, as well as
among those with the most innovative use of technology

3. Participating Firms: Affiliations and Service models
The 2015 study is InvestmentNews Research’s third adviser technology benchmarking survey. The first iteration, published in 2011, looked
exclusively at the RIA channel. In 2013, the survey was opened up to the broker-dealer population.
RIA IBD Dually Registered
64.4%
11.7%
23.9%
Financial planning Investment advisory
Investment management Wealth management
61.9%
16.0%
10.0%
12.1%

4. Participating Firm Financials
(values are averages) 2013 2014 % change
AUM $331,412,116 $374,121,217 12.9%
Revenue $1,959,902 $2,306,977 17.7%
No. of Clients 544 627 15.3%
Professionals - 4.0 -
Total Staff - 9.0 -
Total Technology Spending $66,289 $80,507 22.4%
Total Operating Expenses $1,025,444 $1,150,571 12.2%
Tech Spend as % of Revenue 4.2% 4.2% -
Tech Spend as % of Expenses 9.6% 9.8% -
Operating Profit Margin 46.4% 49.0% -
Revenue per Staff - $248,222 -
Revenue per Professional - $714,409 -

5. Source: InvestmentNews 2015 Adviser Compensation & Staffing Study
Common-Size Income Statement
Value Amount % of Revenue % of Overhead
Total Revenue $3,241,255 100.0% -
Total Direct Expense $1,297,141 40.0%
GROSS PROFIT $1,944,115 60.0% -
Staffing Expenses $570,686 17.6% 49.7%
Occupancy Cost (Rent, Utilities, etc.) $108,531 3.3% 9.4%
Technology Cost $79,971 2.5% 7.0%
Marketing and Business Development $64,142 2.0% 5.6%
Professional Services $61,024 1.9% 5.3%
Office Expenses $47,435 1.5% 4.1%
Travel $30,994 1.0% 2.7%
Other Expenses (Taxes, Licenses etc.) $186,732 5.8% 16.2%
Total Overhead Expenses $1,149,379 35.5% 100.0%
OPERATING INCOME $794,736 24.5% -

6. Sharp uptick in Technology Spending
Advisory firms raised their technology spending 22.5% in 2014. While overhead grew by 12.2%, technology spending grew twice
as fast as overall operating expenses, making it likely among the fastest growing expenses in 2014 for most firms.
$66,291
$80,613
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
$90,000
2013 2014
Total Tech Spend
$32,985
$17,784
$4,771
$10,751
$38,666
$21,280
$9,822
$10,84417.2% 19.7%
105.9%
0.9%
-5.0%
15.0%
35.0%
55.0%
75.0%
95.0%
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
$45,000
Software Technology-related
consulting or
outsourcing
All other technology
expenses
Hardware
2013 2014 % Change

7. 2015 Tech Spending Outlook
Over half of advisory firms anticipate increasing the amount they spend on technology in 2015 – just 6% said they would
decrease.
In 2013, 50% of participants said they would increase spending, and 9% said they would decrease.
In which areas do you plan to invest? Average Ranking
Software 1.6
Hardware 2.8
Technology training 2.8
IT consulting or outsourcing 2.9
55%
6%
39%
We will increase
spending
We will decrease
spending
We will keep
spending the
same

8. Technology investments: Top considerations
“Expected benefit to client” gained significant ground as a response to this question, up from 22% in our 2013 survey.
3%
5%
6%
6%
33%
45%
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%
Expected cost
More time to focus on business development activities
Increased profitability
Expected benefit to staff
Expected benefit to client
Productivity gains

9. Client Experience or Productivity Gains?
Invest to reap Expected Benefit to Client Invest to boost Productivity Gains
Increased their tech spend by 53% year-over-year, and are more likely to
increase spending in 2015 (59%)
Increased their tech spend at a slower rate (12%) year-over-year, and are less
likely to spend more in 2015 (48% said they plan to increase tech budget)
Less likely to rely on partners for technology investment decisions (69%) Rely more heavily on firm partners (81%), rather than committees, dedicated
staff, or outsiders to make tech decisions
Increasing capacity more likely to enact change in tech systems Improving workflows much more likely to prompt firms to consider a change in
tech systems
Far more likely to weigh client satisfaction when evaluating tech (21% vs. 2%)
and integration (14% vs. 1%)
More likely to weigh productivity measures (33% vs. 22%)
Has fewer software solutions, but is more likely to access them all regularly (at
least 1/week) from a mobile device.
Has more software solutions, integrated software and mobile applications.
More likely to have fully automated integration between software systems
(30% vs. 20%)
Is less likely to have fully automated integration.
More likely to offer robo-advice now (6%) or plan to in the future (12%) Much less likely to offer robo-advice now (1%) or in the future (7%)
Have bigger clients (average AUM of $5M) Have smaller clients (average AUM of $1.5M)

10. Questions to consider:
Where is your firm in its technology lifecycle?
What are your primary firm-wide objectives?
How will your plan to increase/decrease technology
spending change in the coming years?

11. Technology & Staffing
- Consultants are now the leading source of tech support services, a shift from two years ago, when “knowledgeable staff”
was the most popular response.
- When it comes to decision-making, however, firm management retains tight control, with 90% of firms saying partners or
partner-led committees are the primary decision-maker for technology investments.
37.1%
30.9%
21.1%
7.2%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
Consultant(s) or
third parties
Knowledgeable staff
(those who know
technology but have
a different primary
role)
Technology
outsourcing
Dedicated IT staff
Primary source for installation, implementation,
training and support
78.9%
10.8%
3.1% 2.1%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
Partners or
dedicated
management such
as CEO, COO
Committee
(multiple
departments)
Dedicated IT staff Consultant(s) or
third parties
Decision-maker regarding technology
investments

12. Software solutions used
The popularity of software solutions has only increased, with all but two product categories showing strong increases in overall usage among our
current study sample vs. our 2013 study – Portfolio Rebalancing software in particular saw a massive spike in use, up to 54% of advisers using,
from 37%. The average participant in our study utilizes 5 (4.6) software solutions at their firm – up from 4 (4.2) in our 2013 study.
30.3%
36.9%
62.5%
53.3%
66.6%
75.7%
85.5%
28.6%
53.7%
58.6%
62.1%
74.9%
80.6%
89.9%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
Compliance Portfolio rebalancing Document
management
Account aggregation Portfolio
management
Financial planning CRM
2013 2015

13. Product Satisfaction
3.7
3.8
3.9
3.9
3.9
4.0
4.2
0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0
Portfolio management
Compliance
Account aggregation
Document management
CRM
Portfolio rebalancing
Financial planning
5 = Very satisfied
4 = Satisfied
3 = Indifferent
2 = Dissatisfied
1 = Very dissatisfied

14. How do you envision technology-driven
growth taking place at your firm?
55.6%
26.5%
18.0%
0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0%
Fully utilizing my firm’s currently technology
Investing in new and emerging technologies
Technology will not play a significant role in my firm’s ability to grow
Which of the following would be the most critical to achieving your goals for growth?

15. Section III
Technology challenges

16. Integration remains elusive
21% of respondents say that they’re systems are fully integrated, up slightly from 2013, when 19% of participants said the
same. 53% have some level of integration, and 26% report zero integrated systems.
*respondents could select all choices that apply
2.3%
5.2%
5.2%
10.5%
18.0%
56.4%
0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0%
Improved response times with clients
Increased accuracy
Improved client satisfaction
Reduced manual input time
Improved productivity in general
Greater efficiency of our process
What is your primary reason for integrating
systems?
7.0%
10.7%
11.8%
12.8%
16.6%
17.6%
26.2%
27.8%
38.0%
0.0% 10.0% 20.0% 30.0% 40.0%
Inability to get real-time data feeds
Lack of support from our custodian or
broker-dealer
Can’t keep up with the pace of new
technology
Low return on investment
Lack of software vendor support
Lack of internal resources for investing in,
and maintaining, a solution
One or more systems that we would like to
integrate are currently manual
Unable to identify an appropriate solution
Insufficient staff time for developing a plan
or implementing fully integrated systems
What are the main obstacles limiting
integration?*

17. Does your firm have a mobile strategy?
25.4%
68.1%
6.5%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
Yes No Not sure
Does your firm have a mobile strategy in place for more effectively
using smartphone and tablet technologies over the next 1-3 years?

18. Mobile & Cloud: changing the face of advice
• 73% utilize the cloud
• 56% of firms have a mobile-accessible client-facing portal
• 82% of respondents use a tablet, up from 62% in 2013.
• 45% access core applications via their mobile device, up from 43% in
2013.
• 69% access their CRM via mobile application, most of all core apps
• 38% said improved client communications will rival enhanced
productivity (40%) for having the most significant impact as a result of
mobile usage over next 1-2 years. (just 24% said same of client
communications in 2013)

19. Section IV
Top Performers and Innovators

20. Proof Points: Top Performers
At firms that rated highest in adviser and staff productivity, profit margins, and levels of product integration, technology is an
established means of improving efficiency and adding value for clients.
• Believe fully utilizing tech will be critical to
achieving growth (69% vs. 51%), and only 7% (vs.
22% of all others) say tech will NOT play a
significant role in firm growth.
• Top Performers more likely to increase their tech
spend in the coming year – and much less likely
(2% vs. 7%) to decrease.
• Top Performers are more likely to evaluate their
firm technology based on efficiency than all others.
• Advisers at top performers spend 85% of their time
on “core” activities, versus 73% for all others.
• Not a single Top Performer cited cost as a primary
concern when investing in technology.
• Top Performers are overwhelmingly more likely to
have a mobile strategy in place at their firm (38%
vs. 21%)
68.9%
24.4%
6.7%
51.4%
27.1%
21.5%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
Fully utilizing my
firm’s currently
technology
Investing in new
and emerging
technologies
Technology will not
play a significant
role in my firm’s
ability to grow
Which of the following would be most critical to
achieving your goals for growth?
Top Performers All Others

21. Proof Points: the Innovators
Innovators are firms who use the most software, mobile and cloud solutions, have the most integrated technology systems, and have an
expressed mission to embrace new technology. These are our innovators: firms with the deepest commitment to leveraging adviser technology,
and they experienced nearly twice the growth of all others in 2014, increasing their revenue by 36% in 2014 (all others grew revenue by 19%).
• Spent 5.5% of revenue on technology (all others:
3.9%)
• Achieve higher profit margins – 48% vs. 45%
• Generally have smaller clients ($1M vs. $3M in
AUM), but post equal or better productivity ratios
in Rev. per Staff and Rev. per Professional
• Their advisers have more time for core activities
(81% vs. 73% of their time spend)
• Are much more likely to invest in technology
training than all others
• Are much more likely to evaluate their current
technology twice per year or more (62%) than all
others (39%)
21.1%
51.4%
43.0%
52.1%
71.8%
78.9%
90.1%
54.0%
74.0%
88.0%
96.0%
96.0%
98.0%
100.0%
0.0% 20.0% 40.0% 60.0% 80.0% 100.0% 120.0%
Compliance
Document management
Portfolio rebalancing
Account aggregation
Portfolio management
Financial planning
CRM
Software Solutions Used
Innovators All Others