From the July 2009 issue of Boomer Market Advisor • Subscribe!

Save the boomer client - Best tech tools that do more with less

If time is money, then it's high time for advisors to take full advantage of the tech tools at their disposal.

As an advisor and technology expert, David Drucker, CFP, understands better than most the edge advisors can gain by using best-of-breed tech tools. And during times of economic turbulence, technology becomes an even more vital tool for helping advisors do more with less, according to Drucker, whose company runs the annual Technology Tools for Today conference for financial professionals and publishes a monthly newsletter of the same name.

For advisors, he says, "technology is something you have to be constantly on top of. If you have been in business a while, it can really pay to stand back and do a very broad-based system analysis - to question everything you have done on the technology side to this point, then take a big gulp and make changes if necessary. It's one of those things you can't not do. What If there's something out there that could significantly cut man-hours? This is how you find out."

Where to start
Whether it's investing in new tech tools or better exploiting those already on hand, advisors owe it to themselves to find out exactly how technology can help their practices, says Brian Davis, business development manager for St. Louis, Mo.-based Scottrade Advisor Services, a provider of custodial trading services for registered investment advisors.

"Given the current economic environment, most advisors are not looking to add additional staff," Davis says. "The focus has shifted to affordable technology solutions. By investing and utilizing technology, advisors can improve their time management and increase communication with their clients."

More clients are switching advisors as a result of the financial meltdown. Technology tools - from integrated financial planning and modeling platforms to CRM software to data and document management systems and beyond - can empower advisors to take advantage of the client migration, contends Drucker.

"Advisors who are ready for [the wave of investors seeking new advisory relationships] will experience a pick-up in business," he says. "Advisors should be investing in things like CRM software now to get ready for the influx. Those are the kinds of tools that allow you to be super-organized. And the more organized your office is, the better service you are going to be able to provide."

Tech tools also can help advisors keep existing clients by freeing up time for the one-on-one interactions that tough times tend to demand. "Service is an area we can't afford to cut back on," says H. Brian Adcock, an advisor and executive vice president at Adcock Financial Group in Tampa, Fla. "Technology enables us to have those face-to-face conversations and be more proactive with our clients."

For advisory practices, the most prudent approach to technology, experts agree, is to selectively, strategically invest in new tech tools while at the same time looking to wring more out of the tech tools they already have. Davis suggests advisors "get reacquainted with [their] broker/dealer's or [their] custodian's technology. Don't hesitate to contact them for additional demos or training.Chances are they have made updates to their technology and advisors have been so busy managing clients during the current financial fallout that they may have missed something." Case in point: Scottrade will unveil a new trading platform this summer designed to improve advisors' trading efficiency.

Adcock says his firm has made a concerted effort of late to maximize utilization of existing software systems, evaluating which could be used more efficiently and which aren't providing enough bang for the buck. To cut costs, those in the latter category likely won't be renewed. The firm is also "trying to restructure deals to get better terms on the software we have," he notes.

Training is also critical to squeezing more out of existing software systems, asserts Drucker. "New features get added so fast, advisors aren't always up to speed on using them." So get the training that's offered by the broker/dealer or software company.

It can be hard to envision spending tens of thousands of dollars on new software, especially in lean times. But sometimes the potential pay-off to such an investment is too significant to ignore. "Most technology providers have multiple technology solutions that can add value or have key integrations with other best-of-breed providers," explains Davis. "For example, we see many CRM providers offer other services such as document management and e-mail archiving solutions at a lower cost to existing clients or they integrate into other solutions such as portfolio management."

As with any investment, technology purchases demand due diligence, Davis adds. "It's important for advisors to not rush into picking the first solution that integrates or appears to provide the desired functionality."

Best in value
Choosing from among the many technology options can be a confusing and frustrating experience for the uninitiated. Here's one area where advisors can lean on their broker/dealers. Not only do many broker/dealers and custodians have relationships to offer third-party tech solutions at discounted prices, the most proactive ones have made a concerted effort to better understand the kinds of tools that best suit the needs of advisors - as well as their staffs. For example, broker/dealer NFP Securities Inc. for the last two years has convened an advisory council consisting of staff members from advisory practices across its network in order to gather input on tech tools. "You can't overlook that constituency," says NFP Securities President James Poer.

Here are some of the tech tools that the experts say can provide the most value to advisors and their staffs:

To the extent they support advisors' efforts to manage workflow and keep in regular contact with clients, CRM systems are an especially important communications link in turbulent times. "If properly used," says Davis, "CRM technology impacts every aspect of an advisors' business, including marketing, operations, sales, customer trends and analytics."

A top-notch CRM system helps level the playing field between large and small practices, adds Drucker. "With a robust CRM system, a small office can provide the same level of service as a larger office provides."

Financial planning software and income-distribution software that enables advisors and their clients to view and discuss various portfolio and retirement scenarios together are also major pieces in the technology puzzle. "Income during retirement, to me, has become an absolutely critical conversation to have with clients," says Adcock. "Having good income modeling software really helps in those conversations."

With so many clients owning significantly diminished portfolios, financial planning and income-modeling tools can help calm their fears by illustrating a range of acceptable outcomes, notes Drucker. "I like some of the specialized software that allows you to create customized asset-distribution plans. Tools like these help redirect clients' thinking. They provide perspective."

To gain efficiency, it's worth investigating the new generation of portfolio rebalancing tools, says Drucker. "The right ones can literally save hundreds and hundreds of man-hours."

A good document management system - one with the ability to accommodate paperless transactions and record-keeping as well as on-demand access to client information and paperwork in process - can also "dramatically" bolster the efficiency of a practice, says Poer. "It's a tool that can really help reduce overhead."

From a strategic planning standpoint, it's also critical to have some kind of compensation tracking system, says Adcock. "Advisors need a tool that shows the impact the economy and the market are having on their income. It's been key for us to have at our fingertips information about revenue sources - which segments of clients are most profitable for us."

Those are some of today's go-to tech tools. As for tomorrow, Drucker expects innovation in such areas as remote computing platforms, while Davis sees promise in a new breed of data aggregation systems that gather and consolidate information from various client accounts, as well as in client portal services, which, he says, "just might be CRM 2.0 Client portals typically give advisor clients the ability to have single [point of] access to their entire financial landscape, including consolidated account information, document sharing, collaboration tools and document storage, all in one Web-based location."

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