RIAs That Excel at Technology Do Not Look Like Tech Firms Technology should be used to enhance the advisor-client relationship but should never stand between the advisor and the client.
I had the privilege of participating in Dimensional Fund Advisor’s recent Applied Business Strategy Workshop with DFA’s Regional Director, Charles Savari. The opening question Charles posed during our session was, “What does a firm that excels at technology look like?” This led to an interesting conversation where I pointed out that, in my view, many RIAs are putting too much emphasis on technology and not enough on the relationship with the client. As I said during our conversation, we don’t ship products in the RIA industry it is a service business. Technology should be used to enhance that relationship but should never stand between the advisor and the client. To that end, I strongly believe RIAs utilizing technology to its fullest extent, ironically enough, do not look
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Editor s note: This is adapted from the Morningstar Direct U.S. Asset Flows Commentary for December 2020. Download the full report.
December capped a wild year in markets and fund flows. Equities sold off sharply in 2020 s first quarter, but the S&P 500 rallied to close at a record high on Dec. 31. Actions by the Federal Reserve midyear helped shore up bond markets. Amid the upheaval, investors appeared to rebalance away from equities and toward bonds in record numbers, often eschewing open-end mutual funds in favor of exchange-traded funds.
All told, long-term mutual funds and ETFs collected more than $86 billion in December. For the year, long-term funds gathered $212 billion, though that was well below the $356 billion average annual inflow from 2010 through 2019.