If firms are to attract the next generation of wealthy clients, they need to do more to acquire the necessary technology, according to a new study by Pershing and Aite, reported in WealthManagement.com.

Almost 70% of advisors think they need to reach new market segments to drive their growth, and 62% think a digital advice platform would help them achieve such a goal, yet a mere 5% either use a robo now or plan to launch one, according to the survey.

Rob Cirrotti, managing director of investment and retirement solutions at Pershing, tells the publication he thinks the current regulatory environment has been a distraction for RIAs and broker-dealers.

Cirrotti says instead of investing in technology that would help their businesses grow – such as becoming more digital and changing their operating models – firms have been obligated to make investments in other areas, such as compliance and keeping up with regulation.

Supporting Cirrotti’s assertion, the Pershing study found that 71% of advisors polled said political and regulatory uncertainty was the main challenge to their business, followed closely by the Department of Labor’s fiduciary rule (67%).

The Pershing study found that as a percentage of technology spending, financial planning tools were the largest recipient, with 33% of total outlay.

Creating or maintaining an “integrated digital client experience” was the next biggest budgetary area at 20%, followed by customer relationship management (19%), risk management tools (14%), and “customized proprietary technology” at 14%, WealthManagement.com reports.

Cirrotti says that even with the impediments that the political and regulatory landscapes may hold, broker-dealers nonetheless need to make investments in their growth strategies. He thinks demand for advice will outpace supply, so firms will need to generate more capacity and find innovative was to deliver advice.