Financial planning is increasingly becoming table stakes in terms of the services that retail investors expect from their financial advisors. Yet, there is still a sizeable portion of advisors who do not offer these services or whose service offerings are limited in scope. Cerulli believes that technological innovation is likely to be the most impactful driving force for the adoption of financial planning among advisors, according to The Cerulli Report—State of U.S. Wealth Management Technology 2025.

Among those advisors who do not offer financial planning services, by far the most frequently cited major reason for not doing so is that the advisor’s core strength is in investment management (80%), followed distantly by insufficient staff/human resources needed to offer financial planning services (46%) and a lack of interest in financial planning (46%). Given the benefits that inure to advisors who offer financial planning services, many wealth management firms are motivated to drive adoption of these services, but they are challenged by how to do so. One approach some firms have taken is to offer advisors home-office-based financial planning teams that can perform a substantial part of the planning process, but so far, the outsourcing of financial plan creation is limited, with only 4% of advisors doing so.

Instead, Cerulli believes technological innovation is more likely to serve as a tailwind in the adoption of financial planning among advisors, particularly the incorporation of artificial intelligence (AI)-like capabilities that can ingest and analyze a client’s financial information and identify valuable planning opportunities while automating to some extent the time-consuming analysis that historically has been performed by human advisors. “The marketplace has already begun to see financial-planning-related software begin to incorporate AI-like capabilities that can do this to varying degrees,” says Michael Rose, director. “Cerulli expects to see continued innovation in this area, as a way to empower more advisors to offer planning services, to support advisors at identifying planning opportunities with greater expediency, and to uncover opportunities that may otherwise be overlooked.”

According to Cerulli, the usage rate of financial planning technology varies, with general financial planning software used by 92% of advisor practices that offer the service. While these solutions can be effective at enabling advisors to perform a general analysis of a client’s financial affairs to develop a financial plan, for many advisors—particularly those who are oriented toward providing services to the high-net-worth client segment—it can be beneficial to have more specialized financial planning tools.

The usage rates of more specialized financial planning technology, such as stock option planning (41%) and estate planning (45%), are lower, but this is influenced by the number of advisors who incorporate that within their scope of advice. Cerulli believes that as more financial advisors embrace planning and build out teams capable of providing more sophisticated services, the long-term outlook for more specialized financial-planning-related products is positive, but the quality of the user experience and overall rates of satisfaction will create a barrier to adoption.

“Overall, technology plays an essential role in the ability of advisors to perform financial planning, enabling them to perform the complex financial analysis associated with creating financial plans, which is demonstrated by the almost ubiquitous usage rate of financial planning software among advisor practices that offer the service,” says Rose. “With the help of technology, advisors can lead more engaging and digitally driven discussions, which will ultimately lead to better outcomes for advisors and clients alike,” he concludes.