At wealth management firm LarsonAllen Financial, technology has been a key budget item during the past four years as the firm has transitioned to a fully independent practice. Going into 2009, the plan was to roll out account aggregation software and a document imaging system for its paperless office initiative.

Then the market meltdown happened. “We had to put a hold on any planned projects that we hadn’t started implementing or paid for yet,” says Chris Johnson, the Minneapolis-based firm’s director of operations and chief compliance officer.

LarsonAllen is hardly alone. A growing number of firms are facing tough decisions about spending money on new technology these days. That’s why many advisors are now focused on leveraging their existing technology systems to the fullest extent possible–in effect, wringing every benefit they can get from what they already have in place, and spending little to no money in the process. With that in mind, here are eight steps that you can take right now to size up how effectively you’re using your current technology and make smart, low-cost moves that can help you to get the maximum value from your existing systems:

Step No. 1: Rethink Your Workflow

Start by identifying and documenting each step involved in your procedures. Once you clearly see how you and your team get things done, you can eliminate unnecessary actions, and look for ways to use technology to do a better job on the remaining steps. To succeed, however, you’ve got to be willing to challenge your legacy processes. You might do something because “that’s the way you were taught to do it” five years ago–but it might not be the best approach anymore.

One area where it makes especially good sense to consider workflow and technology improvements is the quarter-end reporting process. The first step is to determine how the amount of time needed to complete the reporting process has changed during the past year. If it’s taking longer now there are opportunities to improve. Break down the process into a flowchart of individual steps (see “Sample Flowchart of Quarterly Report Production,” below) and look for ways to use your portfolio management system to speed up the process and reduce errors. For example, automatically downloading data from your custodian into your portfolio management system instead of entering it manually or manually performing the download of files will save time and prevent mistakes, as will reconciling your data daily instead of monthly.

Don’t overlook seemingly small tasks in your workflow analysis. For every daily five-minute process that’s automated, you could save $800 annually in operational resources (see “How Much Can You Save?” sidebar). So instead of manually collating your various reports, have your portfolio management system set them up as batches in the order you want them. Also, calculate your management fees and generate your billing invoices using your portfolio management system. Foster Group in West Des Moines, Iowa, recently used a combination of technology and workflow reengineering that the firm says has made its billing process 40% faster. “That enables us to cut costs, save time and collect revenue quicker,” says Travis Rychnovsky, who heads up the firm’s operations and IT departments.

Step No. 2: Consolidate and Integrate

Many advisors are reexamining their processes to eliminate redundant efforts and be more streamlined. One way to accomplish this is to centralize clients’ information and correspondence (including client e-mails, scanned documents, and portfolio values from the portfolio management system) into the CRM system–enabling staff to view and manage multiple facets of each client relationship from a single application. At Foster Group, the team has stopped scheduling meetings and calls through Outlook and instead is addressing all scheduling needs through its centralized CRM system. The results: “No more duplicate entries, omitted entries, or mistakes about who’s doing what,” says Foster Group’s Rychnovsky. “With such high demands on the staff these days, it’s really important to save time and get things right.”

Step No. 3: Streamline Trading and Rebalancing

Many advisors are trading and rebalancing more frequently to protect capital and take advantage of opportunities such as tax loss harvesting in the wake of increased market volatility. One way to reduce costs and rebalance faster and more consistently is by using inexpensive (and sometimes free) rebalancing software to automatically rebalance client portfolios based around model portfolios. This type of “mass customization” approach essentially allows you to group very similar clients together in your trading system–20 clients of the same age with the same goals and risk tolerance levels, for example–and rebalance all of their portfolios simultaneously instead of on a one-by-one basis. That obviously helps scale your operations, while also reducing or eliminating manual rebalancing tasks (and error potential) for entire segments of your client base, in addition to continuing to provide customized solutions for clients.

You also may also be able to achieve the same types of benefits using automation tools with clients in unique situations who aren’t good candidates for a mass customization approach. For example, setting up an individual portfolio to be automatically rebalanced around highly specific parameters can save time and money versus using manual processes. What’s more, many of these tools can examine multiple investment accounts in the same household or family unit to ensure that any rebalancing that occurs reflects the entire family’s broader financial situation and goals.

At LarsonAllen Financial, director of operations Johnson estimates that the advisors using the firm’s rebalancing system are seeing a three- to five-fold increase in time saved during the rebalancing process. What’s more, the potential for mistakes due to manual entry has been greatly reduced. “Reducing trade errors is very important for any firm,” says Johnson, “especially so right now, when everyone is moving quickly from one task to another,” he says.

Step No. 4: Gain Staff Buy-In

The technology at many advisory practices is underutilized–and often times even ignored–by the staff. That prevents firms from realizing technology’s promised benefits such as scalability and company-wide cost savings. If your employees are indifferent or even hostile toward your technology, you need to gain buy in. Talk to your team about their specific workflow needs and the “pain points” that crop up when they do their jobs, and identify how your existing technology can address those needs.

You also need to make sure everyone who could benefit from the technology that’s in place knows how to use it effectively. When we meet with advisors who are frustrated by certain employees or teams who don’t use the firm’s CRM system, for example, we often find that those employees weren’t aware of (or involved in) the initial implementation and training process.

Step No. 5: Assign a Point Person

You need someone who will be responsible for tracking your firm’s overall efficiency and effectiveness. An owner or partner can be a good choice for this role, of course, but so can a well-respected senior team member who understands the various roles and responsibilities within the firm and can identify areas that will benefit from process and technology improvements. Look for someone who has come up through the organization and held a variety of positions within the firm. At LarsonAllen, Johnson compares each quarter’s reporting to a production timeline to see if the process is on track, as well as regularly reviewing compliance procedures on an ongoing basis and making necessary changes.

Step No. 6: Increase Client Touches

You know that your clients need additional hand-holding and reassurance in this environment. But don’t limit yourself to phone calls and face-to-face meetings, which can take up considerable amounts of time. Consider ways to reach out en masse. Foster Group recently added a blog to its Web site, for example, after clients requested more frequent communication. Regular e-mail updates also could be increasingly important parts of your effort to reach out to nervous clients and reinforce the value you bring to them. Although using e-mail to communicate with clients might seem obvious, it can save you significant amounts of time and money, while keeping you in front of clients. At Capital Advisors, Inc. in Tulsa, Oklahoma, COO Richard Lofgren says the firm is sending out more outbound e-mail communications than ever before, covering everything from stock-specific issues to broader market commentaries.

Step No. 7: Leverage Partner Resources

Firms that provide products and services to advisors are increasingly providing a broad range of offerings–many free–aimed at reducing costs, boosting efficiencies and implementing best practices. For example, some firms offer daily pricing data, rebalancing automation tools and Web-based training on various types of software. They may also supply benchmarking data on technology usage and white papers on technology best practices. Capital Advisors, Inc., for example, uses a technology “scorecard” provided by Charles Schwab that helps the firm evaluate its use of technology and automated processes. Using the scorecard, Lofgren and his staff were quickly able to identify opportunities to take additional time- and cost-saving steps–such as opening more new accounts online, increasing the number of online transaction requests, and making greater use of e-statements. “We saw where our tech usage was lower than we wanted, and everyone started looking for ways to bring the numbers up.”

Step No. 8: Network With Peers

Chances are there are plenty of firms that have experienced and solved similar challenges. That’s why many advisors share best practices with each other through formal or informal groups that meet regularly. Simply asking your peers for their perspectives and solutions can be enough to find newer, better ways to serve clients and manage your practice. LarsonAllen’s Johnson says that the firm made important efficiency-based improvements to its portfolio accounting system and new account set-up process based on information from an industry conference and by calling some of the advisors who spoke at it. “Sharing information and hearing what other firms are doing have helped some of our daily processes be more automated and efficient,” he adds.

There’s no question that technology can be one of your most important allies as you look to build efficiency, maintain high levels of client service, address increasing demands from clients, and look to take opportunities to grow, even in the current market.

The good news is that you can accomplish much of this right now by making sure you’re using your current technology as effectively as possible. As shown above, that can mean using all the features and functionality that a particular piece of hardware or software offers. But it also can entail rethinking how you do certain tasks, managing and motivating your human capital, and leveraging the knowledge of others to find optimal solutions. The key is to think creatively about all the ways you can get the maximum benefits from your current systems to accomplish your most pressing business goals.


Adam Moseley and Wade Spencer lead the independent investment advisor technology consulting teams for Charles Schwab Advisor Services, which provides custodial, operational and trading support services to more than 6,000 independent investment advisory firms. They can be reached at adam.moseley@schwab.com and wade.spencer@schwab.com.