Just as the baby boomers represented a bulge in the 20th century’s birthrate trend, the early ’80s saw a bulge in the number of career changers seeking and discovering the field of financial planning. Interestingly, this trend paralleled the advent and evolution of the personal computer.
It’s helpful to understand these historical events to fully appreciate how far we’ve come, technologically-speaking. If you started your planning career in the late ’70s, for example, the tools of your trade probably consisted of a pencil, a legal pad and a Hewlett Packard 12-C financial calculator.
(During part of the ’70s, I worked as a financial analyst for the federal government and would often find myself day-dreaming about the possibility I might be given one of those new “word processors” to use in my work — essentially a typewriter with a small LCD screen on which typed text appeared and could be corrected before printing). Just a few years later, advisors were facing a double-edged decision: On the one hand, here was this new technology — an IBM PC coupled with the spreadsheet software, Lotus 1-2-3 — that most advisors could see had the power to transform the analytical process essential to financial planning and, on the other hand, advisors were faced with the daunting task of learning to use these new tools.
But learn them we did, although some advisors took to computers and technology more readily than others. And that’s not a minor point, as a small difference in tech-savvyness uncorrected since, say, 1983, will have become a competitive chasm 25 years later. Advisors who haven’t aggressively followed and adopted the more essential technologies developed in the intervening years may, by now, be significantly less profitable than their tech-savvy counterparts.
Of course, the need to adopt certain technology has always been a function of one’s role in the financial services industry. At one extreme are those who, regardless of title, function primarily as salespersons. As employees in large financial institutions, the software they primarily must master is that which helps them prospect, cold-call, track their progress in recruiting new clients and, ultimately, deliver sales literature and other information needed to convince the prospect to buy something. At the other extreme are fee-only (or fee-based but largely fee-only) independent advisors with their own businesses whose software must allow them to serve a permanent and growing clientele for whom they perform a multitude of advice-oriented services.
The technology needs of the latter group are significantly greater than those of the former group because these advisors have the ultimate responsibility to filter and digest ever-larger volumes of information on all aspects of financial services affecting their clients — tax and estate planning, retirement planning, risk management, budgeting, counseling, etc. — as well as create and manage the technological infrastructure that supports their entire business operation. The financial advisor as employee must learn to use the software her employer gives her; the financial advisor as business owner must not only master his software tools, but must also select and network into an effective whole the hardware and software that keep his business running and his clients happy.
From this point on, we’ll discuss the technology required of the latter group of independent advisors — those who own their financial advisory firms and provide professional, consultative services to clients.
Client Relationship Management SoftwareIn the ’80s, they were called personal information managers and, later, contact managers: software that lets you keep track of people and places important to your business — clients, other professionals, financial institutions — and associated information like addresses and phone numbers.
That’s when CRM systems were used like the Rolodexes of the pre-PC world. Now CRMs are so much more — or at least have the potential to be in the right hands. Your CRM should be robust enough to serve as the “dashboard” to your practice. If there’s one software system that should remain open every minute of every manager and employee’s day, it’s the CRM. Advisors are using robust, industry-specific CRMs like Junxure (www.junxure.com), a desktop system, and Redtail (www.redtailtechnology.com), a Web-based system, to send, receive and archive e-mails; to initiate client communications; to manage mass-mail and e-blast marketing programs; to track workflow among employees and outsource partners; to store electronic documents; to schedule individual and group meetings, and much more.
If your CRM doesn’t do these things — or if you’re not using it this way — what kind of centralized system do you have to coordinate all the pieces of your client relationships?