Service and scale are key areas where advisors can use technology to improve their business, according to Mitch Caplan, CEO of Jefferson National.
Caplan recently participated in a panel at Peak Advisor Alliance’s Excell conference in Omaha, and shared some of the ideas he presented there with ThinkAdvisor on Tuesday.
“In terms of building businesses, both in the direct-to-consumer space and now in the fee-based space, if you don’t adopt technology, you end up getting left behind,” he said in a telephone interview.
One of the key benefits of technology is that it allows advisors to improve the front-end experience for their clients in a cost-effective way. “If you think about the next generation of client, going beyond the boomers to even Gen X and ultimately to Gen Y, you need to think about the right way to engage, and technology matters,” Caplan said.
“At the same time,” he said, “technology allows you to create a more scalable platform so that while you’re trying to build and aggregate AUM and get more scale, it helps you break even and grow profits” more quickly.
Jefferson National’s Advisor Authority survey found that advisors use on average seven or eight different kinds of software, Caplan said. “The most successful advisors had probably double that,” he said.
And that’s just the technology they’re counting. “Advisors are using technology whether they acknowledge or recognize it or not; it’s almost impossible to be in business today without some form of a CRM system where you can maintain a database of your relationships with your clients and what you’re doing with them,” he said.
Very small advisors might have most of their technology needs met by their custodian, Caplan said, but regardless of size, advisors need to determine what the key drivers of their businesses are and find technology solutions specifically for those drivers.