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Practice Management > Building Your Business

CRMs When? Why? How?

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Indiana financial planner Craig Dunn says his client relationship management system “brings organization out of chaos.” Minneapolis financial adviser Tiffany Brynteson says CRM “is our life.”

CRMs are Web- or software-based tools for organizing and tracking client dealings and accounts. They can store a wealth of information about clients – from whether they take cream in their coffee, to copies of their trusts. They can streamline office procedures and improve efficiencies. CRMs, ever-evolving to handle more tasks, are exploding in popularity as more financial planners learn just how valuable they can be.

“The planning profession is getting increasingly serious about practice management issues,” says Bob Veres, publisher of Inside Information, a newsletter that helps financial planners improve their practices.

“As the question ?How do I do this better?’ comes up more and more often, CRM software becomes a more-obvious choice to incorporate into a practice,” Veres says.

But how does a planner decide what type of CRM tool to buy and when to buy it? There’s a staggering array of products that fall under the general CRM umbrella. Products range from task-specific tools – such as: software to track prospects or software to ensure compliance – to comprehensive offerings with dozens of functions to help streamline practices. They range in price from a few hundred to many thousands of dollars. This is no easy knot to unravel.

Who needs CRM?
Do you need to figure out the puzzle for your financial planning practice? The short answer is probably yes – if not immediately, then soon. Even a small financial planning practice that’s just starting out expects business to grow. When it does, the old slip-of-paper or Rolodex approach quickly becomes unwieldy.

“Even if you’re a two-person firm, there are so many things that can slip through the cracks,” says Brynteson, manager of client services and asset management for Wade Financial Group (a Minneapolis-based business with about 130 clients, more than $500 million in assets under management and a staff of 11.) A CRM system “solves that for you.” Wade Financial’s CRM has been Junxure-i, a comprehensive office management software system, or its predecessor versions, for 11 of Wade’s 12 years of operations.

Larger, more established firms should definitely consider CRM tools if they don’t have them – or make sure they have the right one if they’ve already adopted a system.

“I was on a first-generation system and it was a nightmare,” recalls Dunn, a registered principal with Liberty Financial Group in Kokomo, Ind. An investment advisor since 1982, Dunn’s earliest client records were kept on index cards. He’s used several CRM systems through the years and now relies on Investigo, another comprehensive office management system, to track his 140 clients and their assets of about $130 million. Moving to Investigo “is by far the easiest conversion I’ve ever had,” he says.

Why invest in CRM?
Better customer service tops the list of CRM advantages, users say. Dunn, for example, uses Investigo to track every client contact, or touch, he has and then can ask the system to tell him which clients he’s missed talking with recently. He’ll often print a list, take it with him on long driving trips and make catch-up calls on his cell phone. He also uses the software to create quarterly reports for each client and then personalizes each one with a handwritten note.

“Every Series 7 broker in the country can sell what I’m selling,” he says. “The only unique commodity I have is my service.”

A vast majority of Dunn’s clients are oblivious to how the CRM system helps him provide good service. They just like being pampered. “It’s like watching a magician,” the planner says. “They like the magic trick but don’t care to see what’s going on behind the curtain.”

The beauty of such a CRM tool is that it helps everyone in an office deliver personalized service, says Gregory Friedman of Novato, Calif. With software developer Ken Golding, Friedman co-founded CRM Software, maker of Junxure-i, in 1994.

When a client calls in, whoever handles the call can access personal information at the touch of a button.

“They can talk to a client like they know him intimately,” Friedman says. “That turns around to the client saying, ?These people really know me. They understand me. I’m not just one of a bazillion people.’”

With most CRMs, financial advisers also can standardize handling of new clients and ensure follow-up.

“When we talk to advisors, they tell us keeping track of what clients asked them to do is their single greatest challenge,” says Scott Fergusson, chief technology officer and co-founder of Minneapolis-based Investigo. Investigo and other CRM products can assign tasks, with deadlines, to specific employees, then track when those tasks are completed.

Some CRM systems can be financial boons, too. Fergusson’s research finds that Investigo users gather, on average, 50 percent more assets than non-users.

“In this business, the client relationship revolves around the meeting,” explains Fergusson, himself a financial planner. “The preparation for that meeting is where you lose efficiency.”

With a good system a planner can pull together a comprehensive report in minutes. The upshot: the planner saves enough time to hold a couple more appointments a week and clinch a couple more clients a month.

A good CRM platform also helps satisfy compliance requirements and avoid possible legal entanglements. Some systems can track customer contacts, planners’ recommendations, changes to the portfolio and so on.

“We all fear litigation and the SEC,” says Friedman, who has 135 clients and about $200 million under management. “With [our CRM], I really feel comfortable we can defend everything we do.”

In a fee-based business like Wade Financial, a CRM system can help handle time-intensive customers. “You get a client sometimes who needs lots of hand-holding,” Brynteson said. “You’re able to time-track in this program and tell such a client we spent X hours in our working relationship with you.”

Many CRM users are delighted by the in-depth business analysis CRM programs allow. Dunn noted he can easily look at his clients by average assets per household, median assets per household, number of clients with assets over $1 million, most productive clients and more.

Choose a platform
Most experts say the first step in choosing a CRM platform is to examine your practice and decide which areas you’d like assistance.

  • Do you want help with those personal touches that can impress clients? Are you seeking a tool that will remind you Joe and Sally are about to celebrate their 40th wedding anniversary? That Mary’s daughter in going into the Peace Corps? That Luis prefers chai to coffee?
  • Do you need something that nudges you about important tasks and helps you provide a higher level of service? Do you want a quick reminder that John wants weekly status reports? That LaDonna asked for information on mutual fund XYZ? That Sheila’s annual account review is due?
  • Do you want something that will create impressive, useful, full-color client reports? Do you need a tool that demonstrates how asset allocations can be adjusted, or how projects asset growth under a variety of scenarios?
  • Do you want comprehensive assistance in managing your practice and making it more efficient? Something that will help you calculate fees and bill clients? That stores important documents for each of your accounts? That incorporates estate planning and insurance information as well as financial data? That links to other software you use?

Answering questions such as these will help an advisor create a list of needs that he or she then can match to appropriate products.

“Don’t get in a hurry,” advises Investigo’s Fergusson. “They really need to sit back, look at their practice as a business and come up with game plan about where they want to be. Then they should see which system best fits them.”

Dunn also suggests taking time to find the right product. When he switched a couple years ago to LaSalle Street Securities to clear trades, he urged the new company to look at CRM.

“[LaSalle] recognized the tremendous benefit of a CRM system,” Dunn says. “The struggle was finding the right system at the right price. It took a year and a lot of work on their part. It was well worth the wait.”

Another suggestion: talk to other advisors, especially those with business models similar to your own, about products they may be using. If possible, get a first-hand look at the product and play with it. That can be an eye-opener, according to Dunn.

“When you get your hands dirty, you see how easy it is to use,” he says. In choosing a CRM system, you’ll have to decide if you’d prefer a Web-based system or a desktop-based system. The Web offers the advantage of allowing access from any computer, anywhere. Investigo is Web-based. Junxure-i is not, Friedman explains, because it includes some features that can’t be accessed on the Web.

“We feel those are important enough to keep it a desktop application,” he says. Once you’ve moved to a CRM system you believe fits your needs, the next steps are yours, Veres says. “The only potential drawback … is you’ve got to learn to integrate it into your practice in a deep and intimate way. Every hour you spend [learning to use CRM] should save you hours and hours on the other end.”

Brynteson says her firm’s CRM system has become a way of life. “It’s our centralized database. Everything we do in the company is tracked through Junxure-i. From the minute clients come in to the minute they leave, it’s all captured.”


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