SEI noted that beyond getting all of their systems on one platform, advisors should also be able to collect data automatically to be truly integrated. It’s important to note, the paper said, that integration is not the end, it’s the means to an end—that being better ROI. Simply having integrated systems isn’t enough; advisors also need to have strong business practices and streamlined work flows so they can focus on their time with clients.
To help advisors reach their ideal level of integration, SEI developed a four-step process.
- Evaluate processes in relation to goals and client experience. Advisors need to understand what information is most important to their business and how it will help them achieve their goals. Once they have a good picture of what they have, they can see what they need.
- Grade existing technology. Advisors should take a hard look at how well their current system meets their needs. They should look for unused functionality to see if they are underutilizing a system they already have, or if they need to upgrade or expand. If advisors discover a shortfall, SEI noted that they should ask themselves whether the problem is with the technology or with the process.
- Empower staff. This includes getting input from staff on where advisors’ current systems fall short. Addressing staff’s concerns is more likely to get them on board. A survey by SEI found 44% of advisors who adopted new technology in the prior 12 months received no training with their purchase, and 27% said they did get training, but it wasn’t useful. The paper urged advisors who are shopping for new technology to consider training as essential to their choice.
- Use clarity as an advantage. Following the previous three steps should give advisors an advantage, SEI said, in confidence and clarity. With a clear view of their technological capabilities, advisors can act to improve their business.
SEI acknowledged that advisors have a “healthy skepticism” when it comes to technology spending. Some programs may claim to offer integration but only do so in a limited way. However, when it comes to integration, something is better than nothing, SEI wrote, citing a survey by Laserfiche that found RIAs with $500,000 in revenue can increase their profits by 125%. That’s not to say it isn’t expensive; the same study found the initial investment in a tech platform can be as much as 1.4% of a firm’s revenue.
Ultimately, the benefits of integration should translate into better reporting for clients, something 41% of advisors surveyed by SEI said was the most important benefit integration could provide. By comparison, just 25% said fewer mistakes was the most important benefit.