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Technology > Marketing Technology

Going Indie? Choose Your Tech Tools Wisely

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Can a company be a startup twice? That’s what October felt like at Sherman Wealth Management as we left the large financial firm we had partnered with and relaunched ourselves as a registered investment advisor (RIA).

When I first created my firm, we were structured as an investment advisory representative of a large independent broker-dealer. This structure allowed us to offer clients customized boutique financial planning services, with the resources of a large firm to provide extra value. It was an exciting time, and we were energized by our growth.

I felt like I was missing opportunities, though, as I watched the meteoric rise of new platforms, apps and robo-advisor technology. I was itching to implement them but saw how long it takes for that kind of disruptive new mindset to gain traction with the larger firms. I found myself wanting to have more options to choose my own tools, my own resources, and my own technological solutions for my clients — from portfolio analysis to risk assessment to marketing. In short: I wanted true autonomy, and an ability to implement innovative tools faster than large corporations can, due to their entrenched processes, restrictions and strict compliance policies. Instead of a partner, I felt more like a franchisee.

In October, I took the plunge again, and Sherman Wealth had its second launch as a RIA.

One of the first challenges I faced was deciding how to prioritize incorporating the kind of tech and robo tools I wanted to offer my clients.

Some were obvious first choices: One of the first things we incorporated on our home page was a sophisticated tool for assessing baseline risk tolerance. The response has been terrific, and it’s a great conversation starter for both new clients and our quarterly check-ins with current clients about strategy, goals and indicators for rebalancing portfolios.

The second is is an algorithm that integrates with our risk assessment tool and helps us not only build portfolios more efficiently, but also enables us to see in real time how those portfolios are performing. 

The next piece we’re putting in place is a comprehensive, user-friendly web interface that will allow clients to keep track of every aspect of their financial planning in one place – from cash flow to 401(k)s to insurance to college saving. What sets this interface apart from other sites, like, for instance, is that we will have access to all the data as well. That gives us the opportunity to catch red flags, like an unusual spike in spending, as well as opportunities, like extra income or savings that can recommend allocated to invest, for instance, or pay down debt faster — something a robo-advisor can’t do.  As fiduciary advisors, it gives us the kind of access to our clients’ financial health that health monitoring apps give to doctors.

Have we experienced bumps in the road? Of course. Like anything worth building, making these changes has required an investment of time and resources, as well as a lot of patience.

One specific challenge has been avoiding the “kid in the candy store” syndrome. There are so many exciting new tools, apps and programs being unveiled daily that we have to be disciplined about building slowly and prioritizing what adds the most value for our clients.

The way we’ve stayed focused is to remind ourselves daily of our mission – which is to make customized, fee-only, conflict-free financial services available to everyone, no matter what the size of their initial investment, and to build strategies for that client’s unique life goals. We’re not a faceless algorithm that categorizes clients into large demographic buckets and moves their money in tandem with everyone else’s based on age, income and broad-stroke risk aversion, whether it’s right for that individual and their goals or not.

Instead, we’ve been able to build a client-facing model that has the flexibility to incorporate the cutting-edge algorithms, apps, and tech platforms that will provide clear value to our clients. We think this is the future of financial services, particularly for younger clients who are just setting out on their financial journey and may not feel comfortable with the older, more established companies whose interfaces don’t match the wired generation’s expectations of what business and customer service should look like.

While it’s exciting to adapt new technology to make that process more efficient, fast, and exact, our new technology model is more than just the sum of our tools: it’s about combining new tools with focused human judgment and expertise and having a personal relationship with each and every one of our unique clients.

Considering becoming a breakaway advisor? Making the transition will no doubt have its challenges but, with a focused plan and by being true to your mission, you’ll be able to adapt the kind of new tools or technology infrastructure you choose to better help you serve your clients in exciting new ways.


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