Contact Point

Ideally, Gary Zaugg would chat with his computer, have it input client notes, and file appropriate details into the correct folders–all without the Virginia Beach, Virginia planner having to lift a finger to the keyboard. Until advisor nirvana arrives, however, he’s happy juggling the same customer relationship management (CRM) software he’s had for the past ten years. “If it’s not broken . . . ” jokes Zaugg, an advisor with Raymond James.

But new developments in CRM could change Zaugg’s mind. While a software program that perfectly grasps voice command–and files as well as a seasoned assistant–is probably not on the immediate horizon, new features finding their way into CRM products might make it easier for advisors to not only stay in touch with clients, but also potentially turn them into life-long advocates. Sure, CRM won’t automatically order birthday flowers and send them to the client just because it’s noted on Outlook, although that level of automation may not be too far down the road. But get real, a bunch of tulips is hardly going to nail, or secure, a $10 million account.

“A high-net-worth client doesn’t want to be sold, he wants to buy into something,” says Duncan MacPherson, co-founder and co-CEO of Pareto Systems, based just outside Vancouver.

CRM software can help an advisor stay in touch with a client, but the key is using it in the right way. While new bells and whistles are fun, most experts and advisors agree that no piece of software can replace the person-to-person interaction clients usually seek. Still, CRM software makers are now combining clever programming with more robust software to offer advisors a more streamlined, smarter way to keep current clients happy and bring more clients into their financial family.

The Missing Link

Clipping a golfing story from the newspaper and mailing it to a client who spends his weekends on the greens is a common way an advisor builds connections. But e-mailing an article about the best cooking schools in France to a recently retired client with a fantasy of being a master chef — especially one whose assets can support his dream? Perhaps a bit more meaningful.

“We got an e-mail from an advisor who had a client taking a trip to Napa,” says Joe Lanza, head of sales and marketing for Dow Jones Newswires-Americas. “The advisor found a story on a new winery in the area and sent it to him. The client e-mailed back, thanked him, and said, ‘By the way, I have $300,000 that needs to find a home. Let’s talk when I get back.’”

With two decades in the financial services industry, Lanza understands what’s necessary to sculpt a successful advisory firm. That’s why he has helped oversee the launch of Dow Jones’s new CRM tool, Wealth Manager Direct, which links client management software with a newswire service that automatically searches and stores, then e-mails, articles that fit a client’s profile.

Dow Jones is no stranger to Wall Street, but following the collapse of the Internet bubble, the company says brokers and advisors challenged the financial research and news giant to come up with features that would help them grow and deepen their relationships with clients, and bring in more assets.

The company poured nearly a year into research, building prototypes and adding beta testers before launching Wealth Manager Direct in September 2005.

The program’s strength is its ability to mine news databases including The Wall Street Journal and Dow Jones Newswires to find stories that match a client’s preferences. When an advisor launches the Web-based program, client data, along with stories that have been captured, appear on the front screen. Names and e-mails also emerge in a pop-up window allowing the story to be immediately sent, if the advisor chooses.

“We know that affluent clients like to be contacted at least 28 times in a one-year period,” says Lanza, quoting the study “Capturing the High-Net-Worth Investor” by CEG Worldwide that was commissioned by Dow Jones. The firm believes its new product will help create not just random reasons to fulfill that quota, but ones that carry some significance.

A subscription-based tool, Wealth Direct Manager requires a 10-user minimum. It’s not ideal for an independent advisor –or one who wants to supplement the CRM software his firm pre-installs on his PC. Moreover, a barrage of e-mailed stories–even if they relate to a client’s interest–could quickly be perceived as spam. So judiciousness is critical. “CRM can be misused,” warns Art Grant, president of the Syracuse-based independent B/D Cadaret, Grant. “You have to be very careful.”

Intelligent Design

Grant is cautious when it comes to turning a client relationship over to a software program. Which might be why it took him until last November to actually install CRM software on some of his advisors’ desktops. He enlisted the help of Pareto Systems, which customized a version of its program for the B/D and its advisors.

Cadaret, Grant looked at a number of CRM possibilities. There were concerns that some software wouldn’t tie into its existing back-office programs. The B/D also toyed, briefly, with the possibility of building its own system. “But we didn’t want to reinvent the wheel,” says Marypat Ganley, the company’s VP of business development. What management did want was something that would be easy to use and could work with the mobile nature of many of its advisors. The idea was that an advisor could meet with a client, access data on a PDA, go back to a hotel room, update notes on a laptop, and even see what his administrative assistant had done that day in terms of client contacts.

Ganley says the firm was adamant about being able to see what an admin had done–without having to get an e-mail update from him. “A lot of e-mail can be more annoying than helpful,” she says.

Another no-no was anything that became too automated, like linking the CRM tool to Caller ID so data including a client’s most recent trade, or even the color of his hair, would come up when the call came in. “That was the rage maybe six or seven years ago,” says Grant. “But we believe that preconditions the response from the advisor, so it’s less spontaneous.” Most important, it had to be simple so people would use it, says Grant. “Otherwise it’s a waste of time and money.”

In all, it took the firm almost a year from idea to contract before it came up with a system that worked with its back office, wouldn’t cost too much, and could help its advisors grow their businesses. Ganley knew that off-the-shelf software could cost as much as $1,000 out of the box, which the broker/dealer felt would be too much of a burden on its advisors. “We got that down to as little as $300 a year, which we charge our advisors,” she says.