Wirehouses and banks are pulling ahead of independent registered investment advisors in AI adoption, with a new J.D. Power survey showing 73% of captive advisors now use AI tools compared to just 42% at independent broker/dealers and RIAs. That 31-point gap - up from 25 points last year - is widening as large institutions pour billions into AI while many smaller firms remain in experimentation mode.
The adoption gap in numbers
Both segments saw solid year-over-year gains: captive advisor AI use rose from 44% to 73%, while independent adoption climbed from 19% to 42%. Still, Mike Foy, managing director and head of wealth intelligence at J.D. Power, said the disparity reflects structural advantages. "The large banks and wirehouses have bigger technology budgets, and they also have more direct control over what advisors have or don't have from a technology standpoint," he wrote via email.
David DeVoe, founder and CEO of DeVoe & Company, sharpened that point for the pure-RIA space. "J.P. Morgan spent roughly $2 billion on AI last year," he said. "The largest META-RIAs are investing eight figures annually in technology and AI, while many independent advisors are still tinkering with tools like ChatGPT." A separate DeVoe & Company survey of 100 RIAs with at least $100 million in assets found that 59% describe their AI approach as experimental - individual use for marketing, notetaking, and similar tasks. Only 14% called themselves heavy or experienced AI users, and 7% use no AI at all.
Vendors and large RIAs accelerate AI builds
Technology platforms serving the RIA space are racing to close the gap. Envestnet pledged $1 billion in 2025 for technology and has signaled it will likely exceed that figure, partly through AI-focused innovations. Orion announced its Denali AI system is now available to enterprise-level RIAs, with plans to open access to all advisors later this year.
Large RIAs are also making their own moves. Carson Group upgraded its AI assistant in March to pull data from across proprietary and connected vendor platforms with a single query. Savant Wealth Management committed $50 million over three years to build an in-house AI operating system. Cerity Partners hired fintech founder Will Peng as its first chief innovation officer to bring AI into workflows and client experience. Mariner announced a five-year partnership with AI workforce provider Humanity Labs, while Merit Financial Advisors partnered with OneVest for its agentic wealth operating system.
Agentic AI - systems that can act autonomously on behalf of advisors - is beginning to move from concept to production. Wealth Management's 2026 WealthStack Study found that 11% of surveyed firms already have an agent in production, and 13% are running a pilot project. Another 21% reported no agentic AI use at all.
M&A implications of the AI divide
For RIAs weighing a sale, AI capability is becoming a differentiator among buyers. Jess Polito, founder and principal of Turkey Hill Management, sees the effect firsthand when showing seller clients what acquirers are building. "There is an AI arms race on right now among the buyers," Polito said. "We're doing the usual technology stack demos with clients, but some of the buyers are showing off what they can do or are working on." She said the technology gap can influence a seller's choice but hasn't yet become a primary reason to sell, given how new the tools are.
DeVoe believes that will change. "Although AI will make it easier for smaller firms to run their business, we expect AI will ultimately drive more advisors toward selling externally," he said. "The No. 1 driver for an RIA to sell is to gain the benefits of scale. AI and technology are key and growing components of the value of that scale." For now, AI remains a minor decision driver in M&A, but DeVoe expects its weight to "increase steadily over time."
Why this matters for management
The AI investment gap between institutions and independents is creating a scale advantage that compounds over time. Leaders at mid-sized and smaller RIAs need to decide whether to allocate serious budget to AI infrastructure - knowing that vendor tools are improving but may not close the gap with firms spending eight figures annually - or to accept that the technology deficit will eventually pressure margins and client retention. The firms winning the AI arms race will gain operational efficiency and client experience advantages that are difficult for late adopters to replicate. The timeline for that decision is shortening.
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