The Covid-19 crisis has dramatically changed the way financial advisors engage with clients.

Prior to the coronavirus pandemic, most RIAs' efforts to integrate digital tools or offerings were still nascent and few made client use and adoption a priority, according to a report from research and consulting firm Aite Group commissioned by Chicago-based wealth technology firm Envestnet.

The coronavirus lockdowns, social distancing and significant market volatility elevated the importance of digital engagement, the report notes. Post-pandemic, digital transformation will not be just “nice-to-have” for RIAs, but a "must-have" to stay competitive, according to the report.

Some of the report’s findings were based on a pre-pandemic survey on digital transformation, conducted between April 2019 and June 2019. Aite Group surveyed 400 financial advisors in the U.S., including 98 RIAs and 48 hybrid RIAs or RIAs with a broker-dealer affiliation.

The report did not quantify advisors' approaches, but it did outline some of the best practices in RIA digitization, including developing a formal strategy, dedicating technology resources, segmenting clients and conducting vendor reviews.

Client communications and training are the most critical but also the most frequently overlooked steps for RIAs in driving client adoption of digital tools, according to the report.

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