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Insurance & tech: 3 mistakes to avoid when choosing a CRM

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After working in the financial services industry for 13 years with a company that integrates with pretty much every CRM out there, I get asked this question constantly: “Which CRM do you recommend?” I always answer the same way: “Tell me about your practice.”

Too often, advisors rush into choosing a CRM before taking the time to really evaluate what services and functionality they need from a CRM system. Americans are an ‘industrial strength’ crowd – we want the biggest tool with the most features.

The problem with this approach is that we tend to put the ‘bigger is better’ philosophy above practicality. Because of this, many advisors get stuck paying a premium price for a solution that requires time-intensive customization and doesn’t deliver the benefits originally promised.

The good news is that there is an appropriate CRM for everyone, but the bad news is that many advisors choose the wrong CRM or purchase an entire platform because they choose based on the wrong reasons.

Here you will find best practices for choosing a CRM to help advisors make the right investment for their practice.


Mistake #1: Buying without practically determining if you want a generic or industry specific CRM.

This is a crucial first step in purchasing a CRM; however it’s also where most advisors miss the boat. Rather than buying impulsively based on shiny features, advisors should first think about what they really want and be honest with themselves before looking to purchase software.

There are a few fundamental differences between generic and financial CRM systems that advisors should consider from the onset.

Generic CRM solutions are designed to work across multiple verticals – not just financial services. In order to effectively produce a CRM that is useful to advisors while also scalable to the masses, generic CRMs typically need to be configured for use.

If an advisor is not an expert in the particular CRM chosen or they don’t have the time to configure it properly, advisors will need to pay a Value Added Reseller (VAR) to complete the configuration. These are also referred to as Overlay providers. This is an often overlooked or ‘hidden’ cost that can drive up the overall price tag by a considerable amount.

“Another option to leverage the capabilities of the leading horizontal CRM vendors such as Microsoft and Salesforce is to work with an Overlay provider such as Salentica.  These firms specialize on working with advisors. They leverage the capabilities of the standard platform and provide the configuration and integration that advisors needs, such as custodian and LaserApp integration. These Overlay Independent Software Vendors (ISV’s) rely on the underlying CRM vendor to provide the core CRM capabilities,” says Bill Rourke of Salentica.

On the other hand, financial CRMs are prebuilt for the financial services industry. CRMs in this category have their own strengths and weaknesses. However, the primary benefit is that they are out of the box and specifically designed for financial advisors.

If a financial CRM meets an advisor’s needs, it can be turned-on the next day without any customization. This approach helps keep costs low and speeds advisors’ time to market.

“A smooth transition to a new CRM can often be a determining factor in regard to overall user adoption within your office,” said Rourke. You might perform the due diligence necessary and be satisfied that your chosen solution will increase efficiencies and improve your client relationships.

“But, if you don’t have a plan in place for ensuring that your staff uses your CRM to your expectations, or if you choose a CRM vendor that doesn’t help facilitate a smooth transition from legacy systems and/or fails to provide adequate support during both implementation and ongoing usage, all of your valuable time may yield poor results,” says David Melhom of Redtail Technology.

“You’ll probably get a gut feeling from your earliest dealings with the CRM providers you audition about the level of support they will provide to your staff. As user adoption is mission critical, if multiple CRMs appear to meet your current needs in terms of industry integration, core functionality and price, you should trust your gut and go with the one that appears to take adoption within your office seriously through the channels of support they offer and the educational resources they make available,” he added.

As advisors consider the pros and cons of generic and financial CRMs, there are three main questions they should ask themselves before making a decision:

  1. What features and benefits do I want to gain from my CRM?
  2. Do I have the bandwidth to customize my CRM, and if not, how much am I willing to spend?
  3. Will my CRM integrate with other technology solutions I already have in place?

Honestly approaching and answering each of these questions will help advisors make the right decision.

See also: Have you tried the “100 calls” method?


Mistake #2: Buying without seeing integration features in action

Always, always, always see integration features in action before making a CRM purchase. There are always companies willing to sell advisors what they want, rather than what they’ve built, and this can lead to advisors feeling like they have fallen victim to the ‘bait and switch’ tactic.

By seeing a demo of integration functionality in action, advisors can better discern if the CRM can be easily integrated with the software solutions they already have in place, such as forms filling, financial planning and document imaging.

The CRM is often referred to as the ‘hub’ of an advisor’s practice, so in order to have an effective hub, it needs to connect seamlessly with other tools. A CRM is one of the most important purchases an advisor can make, so it is imperative that it fits within the advisor’s entire ecosystem.

Advisors should also consider the following as part of the integration question:

  • What features are inherent vs. buildable/buyable?
  • Does the CRM pass the security test?
  • What level of support is offered by the CRM at implementation and beyond?

While integration is the buzzword advisors should look for, it encompasses more than just communication between systems. As advisors start to drill-down into how the CRM will actually function in a larger ecosystem of software, additional questions come up like increasing functionality, security and support.

When considering the many features a CRM can have, it’s important to uncover which features are considered ‘core features’ as an inherent part of the CRM and which features require additional customization or build-out. Many advisors may be surprised to find out that even industry specific CRMs require additional modules for things like insurance feeds and imaging.

Every CRM is different, so it is important for advisors to discern which features they need immediately and which features they will need down the line.

Security is always another concern when dealing with sensitive financial information, and when advisors have many systems integrating and sharing data, this concern can grow. An easy way for advisors to find out if a CRM is safe for their data is to find out if the CRM has passed the security review of the advisor’s custodian or clearing firm.

Most small broker-dealers don’t have the resources to do full-scale security reviews of every CRM out there, but custodians are more likely to have done so. A month under a custodian’s security review microscope is something only a strong CRM can endure.

A final thing to consider when evaluating a CRM’s integration capabilities it the level of support it offers. Actually implementing a CRM is a well-planned grind, and it requires firm-to-advisor communication, resources, time and cooperation. Most advisors already have data in another CRM or database, so it will be important to be able to easily import that information into the new CRM.

This kind of data transfer often comes with cost, not including training sessions tutorials. Sometimes these costs can pop-up at the end, however somewhat surprisingly, many financial services CRMs actually offer web and phone support free.

See also: A mind-boggling sales statistic

value and price

Mistake #3: Asking about pricing at the beginning

Making pricing a top priority from the beginning is the kiss of death. Of course, every advisor wants value for their budget, but starting the relationship with pricing questions will lead to the no value zone fast.

It may seem counterintuitive, but there are some very important reasons why advisors should always make pricing their final consideration when purchasing a CRM.

Saving pricing questions for last allows advisors to consider all the important functionality questions they often overlook – generic vs. industry specific, inherent vs. add-on features and integration capabilities. Now that they know what’s important to their firm, they can more accurately compare apples to apples.

Here are four questions to help advisors make the final cut:

  1. Is the CRM priced per user or per office, and how much is it per user or per office?
  2. Does the CRM charge to import existing customer data from another system? According to Bill Rourke of Salentica, this can be up to 40 percent of implementation cost. 
  3. Does the CRM support the export of client data?
  4. Does the CRM charge for technical support?

If advisors find good answers to the above questions, then the winning CRM shouldn’t be difficult to spot.

For CRMs that market themselves at a ‘free’ solution, advisors should ask ‘How are they making their money?’ Free CRMs should also be placed under additional scrutiny to make sure they are able to support the security requirements needed to keep client data safe. Advisors should be careful not to let their cheap side get the best of them, and that is one of the main reasons why pricing considerations should be left for last.

See also: 10 questions for email success

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What is the Best CRM for You?

Generic CRMs are typically purchased by larger RIA firms and broker-dealers to be used as platforms rather than as just a CRM.

Generic CRMs offer the flexibility to build-in workflows and tailor the system on a firm-by-firm basis. This type of functionality is typically more expensive, but it can pay off if a controlled process is implemented firm-wide.

Financial CRMs are most appropriate for individual advisors and registered reps. Firms with half a dozen users or less will most likely be very satisfied with a financial CRM.

Purchasing a more extensible (and more expensive) solution is usually only effective if advisors are prepared to use the platform features it offers, however most financial CRMs have integrations to financial industry software that don’t require any work to implement, which can be a big time and money saver.

See also:

What digitalization means for life insurers

Social media in insurance: Unleashing its potential

7 deadly financial advisor marketing sins exposed, Pt. 2


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