Federated Hermes survey: Top business concern for advisors is making better use of AI/technology to reach more clients

Surveyed advisors highlight AI adoption, aging clients and a shift toward ETFs as key forces shaping independent advisory practices.

Rhea-AI Summary

Federated Hermes (FHI) released results of its 2026 RIA and Independent Advisor Survey on advisor technology use, AI and allocation trends.

The U.S. survey of 300 client-facing advisors (each overseeing at least $25 million) shows nearly half view better use of technology to reach or engage clients as their top business concern. 56% see artificial intelligence as an opportunity and 8% as a threat, with 70% expecting AI to improve practice efficiency and 61% expecting more time for client engagement or business development. A majority 53% of advisors aged 60+ are concerned about an aging client base, while about 48% of retail clients are 60–80 years old.

For the first time, ETFs represent a larger share of average client portfolios than mutual funds (29% vs. 26%), and 64% of advisors plan to increase ETF allocations while 45% expect to reduce mutual funds. Alternatives remain about 2% or less of portfolios, but 26% of advisors use them in a moderate portion of accounts and 22% are open to learning more. Federated Hermes reports $911.6 billion in assets under management as of June 30, 2026 and about $3 billion in ETF assets across 12 actively managed strategies as of Aug. 30, 2026.

Market Context

FHI was up 1.89% before publication, while listed peers ranged from -0.48% to +0.35%; the survey arr...

Analysis

FHI was up 1.89% before publication, while listed peers ranged from -0.48% to +0.35%; the survey arrived against a mixed peer backdrop rather than a shared same-direction move.

Key Figures

Survey sample: 300 financial advisors AI opportunity view: 56% AI threat view: 8% +5 more

Survey sample

300 financial advisors

2026 RIA and Independent Advisor Survey

AI opportunity view

56%

Advisors viewing artificial intelligence as an opportunity

AI threat view

8%

Advisors viewing artificial intelligence as a threat

AI efficiency expectation

70%

Advisors expecting AI to improve overall practice efficiency; 62% last year

AI time benefit

61%

Advisors expecting AI to free time for client engagement or business development

ETF portfolio allocation

29%

Average client portfolio assets

Mutual fund portfolio allocation

26%

Average client portfolio assets

Planned ETF allocation increase

64%

Advisors planning to increase ETF allocations over the next year

Key Terms

artificial intelligence, etfs, semi-liquid funds, commodity trading advisors

4 terms

artificial intelligence technical

"56% view artificial intelligence as an opportunity for their practice"

Artificial intelligence is the ability of computers and machines to perform tasks that typically require human thinking, such as understanding language, recognizing patterns, or making decisions. For investors, it matters because AI can enhance efficiency, uncover new insights, and enable smarter strategies, potentially impacting the value and performance of companies that develop or utilize this technology.

etfs financial

"ETFs are now preferred over mutual funds in client portfolios"

ETFs, or exchange-traded funds, are investment funds that hold a collection of stocks, bonds, or other assets, and can be bought or sold on stock exchanges like individual shares. They offer investors an easy way to diversify their holdings and access different markets or sectors without buying multiple individual assets. Because they are traded throughout the day, ETFs provide flexibility and can help investors manage risk while pursuing their financial goals.

semi-liquid funds financial

"private equity draw-down funds, semi-liquid funds, hedge funds"

Investment pools that offer some but not full daily access to cash, typically because they hold assets that take time or special conditions to sell. They let investors redeem money on a periodic schedule, after a notice period, or subject to limits (like gates, lock-ups, or redemption windows); this matters to investors because it affects how quickly they can convert holdings to cash and how stable the fund’s price may be, like a savings account that only lets you withdraw at certain times.

commodity trading advisors financial

"hedge funds and commodity trading advisors"

A commodity trading advisor (CTA) is a person or firm that, for compensation, gives advice about trading commodity futures, options on futures, or foreign exchange and often manages client accounts or pooled funds that trade those instruments. Think of a CTA as a specialist portfolio manager for futures and commodity-related strategies; investors care because CTAs influence exposure to markets, risk, returns and are typically subject to registration and oversight by regulators.

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• Advisors concerned aging client base hinders practice growth opportunities
• ETFs overtake mutual funds in client portfolio assets for first time

PITTSBURGH, Sept. 22, 2026 /PRNewswire/ -- Federated Hermes today announced the results of its 2026 RIA and Independent Advisor Survey, now in its sixth year, revealing how independent advisors are navigating business growth, technology adoption and investment trends in an evolving market environment. The research surveyed 300 financial advisors across the U.S., each with oversight of at least $25 million in client assets under management.

The 2026 findings show that for nearly half of advisors, the top business concern was making better use of technology to reach more clients or create more meaningful engagement with them. Reflecting this sentiment, 56% view artificial intelligence as an opportunity for their practice while only 8% regard this technology as a threat.

For advisors, AI is already quickly moving from experimentation to practical application. Seventy percent believe AI will help improve the overall efficiency of their practice, up from 62% last year, while 61% expect AI to free up more time for client engagement or business development. Among advisors already using AI, the technology is beginning to deliver tangible productivity benefits, including improved meeting follow-up, more complete documentation, better capture of action items and expanded advisor capacity. At the same time, the findings underscore a growing need for education and support, with more than half of advisors saying they want to learn more about AI integration from their asset managers.

The survey also showed that experienced advisors are worried about growth challenges amid changing demographics, and this is particularly true among older advisors. A majority (53%) of advisors aged 60 and over say they are concerned about their aging client base and ability to attract younger clients. Nearly half (48%) of advisors' retail/individual clients are between 60 and 80 years old. Yet only 31% of advisors operating on teams recruited younger advisors in the past year to improve team production.

Within advisor allocation trends, survey data revealed that for the first time, ETFs are now preferred over mutual funds in client portfolios. ETFs represent 29% of average client portfolio assets versus 26% for mutual funds. Looking ahead, advisors expect their anticipated investment choices to accelerate that trend, with 64% planning to increase ETF allocations over the next year, while 45% expect to reduce mutual fund holdings.

Meanwhile, alternatives remain a modest component of client portfolios, but advisor interest appears to be gaining momentum. Allocations currently stand at roughly 2% or less across private equity draw-down funds, semi-liquid funds, hedge funds and commodity trading advisors. Still, the findings point to meaningful opportunity for broader adoption: 26% of advisors report using alternatives in a moderate portion of client portfolios, while 22% are not currently recommending them but are open to learning more.

"This year's survey spotlights the forces reshaping independent advisory practices—from AI-driven efficiencies and changing demographic challenges to rising interest in alternatives and the continued shift toward ETFs," said Bryan Burke, president of Federated Securities Corp. and who leads global sales efforts for Federated Hermes. "It also reflects the continued momentum behind ETFs, a trend we have seen first-hand, having crossed $3 billion in ETF assets across our 12 actively managed strategies, as of Aug. 30, 2026."

Burke added, "Advisors are looking for practical ways to put active strategies to work across asset classes. Right now, as they evaluate mutual funds, ETFs and other solutions, fixed income is getting a lot of attention, especially one- to three-year Treasuries—along with U.S. large-cap stocks. Our goal is to help advisors turn insights into stronger portfolios and deeper client conversations."

Advisors can contact Federated Hermes to learn more about insights, portfolio solutions, and practice management support.

About Federated Hermes

Federated Hermes, Inc. (NYSE: FHI) is a global leader in active investment management, with $911.6 billion in assets under management, as of June 30, 2026. We deliver investment solutions that help investors target a broad range of outcomes and provide equity, fixed-income, alternative/private markets, multi-asset and liquidity management strategies to more than 11,000 institutions and intermediaries worldwide. Our clients include corporations, government entities, insurance companies, foundations and endowments, banks and broker/dealers. Headquartered in Pittsburgh, Federated Hermes has more than 2,200 employees in London, New York, Boston and offices worldwide. For more information, visit FederatedHermes.com.

# # #

Investments are subject to risk and fluctuate in value. Diversification does not assure a profit nor protect against loss.

An anonymous, online survey of the Greenwald Research Insiders Panel, was fielded between June 16 and July 6, 2026. The survey had a margin of error of +/- 5.7% at a 95% confidence level. Advisor respondents had to be client-facing with at least three years of experience and at least $25 million under management/advisement as well as deriving at least half their income from retail/individual clients. Quotas were set to target at least 200 pure and dually registered RIAs, with the remainder being registered representatives only. The survey is augmented by 10 anonymous interviews with RIA survey respondents.

These views should not be construed as a recommendation for any specific security or sector. Investments are subject to risks and fluctuate in value.

Federated Securities Corp. is Distributor of the Federated Hermes Funds. 

 

View original content:https://www.prnewswire.com/news-releases/federated-hermes-survey-top-business-concern-for-advisors-is-making-better-use-of-aitechnology-to-reach-more-clients-302886032.html

SOURCE Federated Hermes, Inc.

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

How was the 2026 Federated Hermes advisor survey conducted?

An anonymous online survey of the Greenwald Research Insiders Panel was fielded from June 16 to July 6, 2026. It included 300 financial advisors, with a margin of error of +/- 5.7% at a 95% confidence level.

What were the requirements for advisors to participate in the survey?

Respondents had to be client-facing, have at least three years of experience, oversee at least $25 million in assets under management or advisement, and derive at least half of their income from retail or individual clients.

What mix of advisor registration types did the survey target?

Quotas were set to target at least 200 pure and dually registered RIAs, with the remaining respondents being registered representatives only. The survey findings were also augmented by 10 anonymous interviews with RIA respondents.

What business support does Federated Hermes say it offers advisors?

The company states that advisors can contact Federated Hermes to learn more about insights, portfolio solutions and practice management support aimed at helping them turn research findings into stronger portfolios and client conversations.

What is Federated Hermes’ overall business scale and focus?

Federated Hermes reports $911.6 billion in assets under management as of June 30, 2026. It provides equity, fixed-income, alternative/private markets, multi-asset and liquidity strategies to more than 11,000 institutions and intermediaries worldwide.