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Technology > Marketing Technology

2 Pitfalls to Avoid, 7 Tips to Optimize Your Tech Solutions

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Today, more financial advisors than ever are realizing that technology is an important tool to increase client satisfaction and profitability. However, recent studies, and no doubt your own experience, have found that new investments in technology don’t always go smoothly. Despite large investments in CRM systems, client reporting and portfolio management software, advisors are frequently unsatisfied with the outcomes and/or are not utilizing technology to its fullest capacity.

The reasons for these reduced levels of satisfaction and utilization include two common pitfalls:

Technology for the Sake of Technology
Technology vendors are now marketing aggressively to the financial services industry, promising features that can “revolutionize” your business. While it’s easy to get side-tracked by these promises, it’s important to remember that there is no such thing as a “one size fits all” technology. Too often, advisors are persuaded to make an expensive purchase only to find the new technology doesn’t fit well with their business or organizational culture. 

Incomplete Integration
A second pitfall occurs when the technology is a good fit for the business, but ultimately fails to deliver the promised benefits. Maybe it doesn’t hold up well to real-life workloads or employees find it less than intuitive and subsequently inefficient. This is often a result of incomplete integration—the new technology may work well on its own, but it may not properly communicate with other office systems to ensure a secure, seamless flow of data.

Here are seven tips to help you maximize the benefits of new technology investments while avoiding the common pitfalls: 

Tip 1: Approach Your Technology Investment as a Strategic, Not a Tactical Issue
Before you invest in a new technology, ask yourself what problems you are trying to solve. How does this potential solution benefit your practice? What changes are you willing to make to reach your goal? What additional organization resources will be required to fully utilize this new technology? It’s important to subject the decision to a full return-on-investment analysis.

This analysis should incorporate not just licensing expenses, but other often hidden costs, including the up-front investment of staff time during sourcing, implementation and testing, as well as any down time for the business. You should also include recurring costs associated with data storage, security and cloud-based applications, as well as any expenses related to safely disposing legacy equipment that may include sensitive client information.

Tip 2: Put Client Needs Front and Center
The guiding principle for any strategic business decision should be whether it helps advisors better serve their clients. A 2015 study by Investment News Research found that only a third of surveyed financial advisors cited “benefit to the client” as the top consideration when considering a new technology investment, well behind desired productivity gains. Keep in mind—a new technology platform that saves back-office time but adds to client frustration and confusion will only create more problems for your business.

Tip 3: Involve Key Stakeholders From the Start 
Before making a decision on new technology, it’s important to consider the experiences and preference of the people who will be using the technology. Involve key staff members in the technology decision from the beginning, learning what they like and don’t like about existing systems, and what kinds of functionality could help them do their jobs better. 

Tip 4: Cast a Wide Net
Even if you’ve established a good rapport with an existing vendor, don’t automatically default to their system or recommendations. Instead, talk to your peers, especially financial advisors with similar-sized practices or client bases. Learn what strategies have worked for them. Industry conferences also can be a valuable way to learn about new technology solutions. 

Tip 5: Insist on a Vendor Commitment Up Front to Full Integration and Training
While most vendors will claim their systems are fully integrated, some may use the term “integration” loosely. At the most basic level, integration may refer to single sign-on (SSO) functionality, which permits users to move between applications without reentering log-in credentials.

Full integration goes further and requires each different software program to communicate in real time with one another, ensuring a secure, smooth, and reliable flow of data. This kind of integration depends on the cooperation of various stakeholders, both at the vendor firm and in your own organization. For this reason, it’s critical to get a commitment from the technology vendor as to what kind of support they provide though the integration process.

When evaluating vendors, you will want to ask the following questions:

  • Is there potential to customize the platform to our particular situation?
  • How will you guarantee your applications will fully exchange information with our existing systems?
  • What kind of trouble-shooting and support do you provide through the onboarding process, and beyond?
  • Is your platform designed to scale as our business grows, without requiring us to scrap the platform and start over? 

Tip 6: Set Up a System of Regular Maintenance and Updates
After the time- and attention-consuming process of implementing a new technology platform, it can be easy to take a more complacent approach once the system is running smoothly. As a result, scheduled updates, data backups, and security measures may be neglected. Neglecting these measures can create hidden minefields.

From the start, create a schedule of periodic software upgrades, data backups, and security system updates. Regular security applications updates are especially important to keep track of evolving cyber-threats. 

Tip 7: Embrace the Cloud
With cloud-based services, you don’t purchase physical hardware or a software license. Instead, you access subscription-based, password-secured applications stored remotely and accessed over the Internet, aka “the Cloud.” Cloud-based applications allow you to access the most up-to-date versions that include state-of-the art security and fixes for any bugs.

Most are billed on a subscription or pay-as-you-go basis, which involves less business risk than a large outlay for a software license, especially as you navigate long-term integration issues. 

Sourcing and onboarding a new technology can be a complicated and time-consuming process. Nonetheless, if navigated correctly — with the support of a dedicated technology partner — a technology migration can provide tremendous benefits for your clients, your staff and your bottom line.


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