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Technology > Marketing Technology

Today’s Advisor CRM: Not Your Father’s Rolodex

By David Mehlhorn

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When I was young I used to visit my dad at work. At the front of his desk sat a box of hundreds of names and companies. I would watch him flip through the cards to find numbers or addresses so he could reach out to his customers. He would take the box on our family trips so he’d never be without his customers’ contact information in case he needed to reach them while away. I never imagined that, years later, I’d have the opportunity to provide advisors with an even more important resource for their business. 

In the advisor technology space, the CRM tends to be the most underappreciated technology despite the fact that choosing a CRM is arguably one of the more important decisions an advisor can make.

There are a few reasons why a CRM hasn’t traditionally received the publicity of the other “sexier” technologies. First, advisors don’t necessarily view it as adding tangible value as they do other tools, such as those for risk assessment or financial planning. Second, it’s more difficult to see the direct correlation between making good use of CRM and business profitability. Finally, the CRM is not client facing and many advisors focus on technology with which their clients can interact.

For one or a combination of these reasons, we sometimes run into advisors who have not yet adopted a true CRM into their practice. This reluctance on their part offers an opportunity for a teachable moment, however, as it is widely acknowledged that CRM should serve as the central hub for a firm’s operations and should be, in fact, the first technology that advisors add to their practice. 

Confused About CRM? It’s Not Your Fault           

When I began working at Redtail, one of the first things I discovered about advisors is that many had misconceptions about what makes a true CRM. Many told me that Microsoft Outlook was their CRM or that they didn’t need a CRM because they tracked all that customer information in an Excel spreadsheet. They viewed a CRM like my dad’s old Rolodex of contact information along with some brief notes about the client. 

Fortunately, true CRMs offer much more than these narrow interpretations, which I still encounter much too frequently.

A CRM is a place to store valuable information about your client that helps you make decisions that are in your client’s best interest. A CRM is a place to keep track of clients’ personal interests and family details that allow an advisor to build trusted relationships with them. A CRM can also be a tool to grow your business or used in a regulatory audit. Workflows and processes can be created to keep the office on track and to create unique, memorable experiences for clients and prospects. A great CRM is also going to integrate with the other industry tools you use and, consequently, spur efficiencies while also minimizing opportunities for clerical errors.

Already Have a CRM? Time to Re-evaluate

Now if you’re currently using a CRM but are feeling like it doesn’t offer the breadth or depth of functionalities that you need, it may be time to look at what else is out there. The first step, however, should be to carefully evaluate what you are currently using on a day-to-day basis in your CRM.

Every advisor is different and has different priorities, so a CRM that’s good for one advisor may not be so good for another. After noting your current CRM usage, the next step is to identify what you want your CRM to do. A CRM should be a part of everything your firm does. There should be client documentation for contact data, notes, activities and all other types of important information. Workflows can be used for the processes within the office such as client onboarding or new account openings.

Another important factor should be the level of integration with the other technologies in your practice. Last, make sure you communicate with your current CRM provider. In some cases your existing provider may be able to help you accomplish what you are trying to do. It’s generally much easier to learn additional features from your existing provider than it is to make a switch.

Still, remember the goals and wish list that you have for your CRM and don’t let the fear of change prevent you from making a move that is best for your business long-term. 

Don’t Have a CRM? Here’s How to Get Started 

If you are an advisor who doesn’t have a CRM, you may be wondering whether you should adopt one. You may feel that you are so far along in your career that it’s not worth it at this point. However, it’s important to bear in mind that a CRM can prove to be an integral tool in terms of receiving the full value for your clients if you do decide to sell your business. A book of business that is organized in a CRM is much more valuable to prospective buyers than yellow legal papers, Excel documents and filing cabinets.

You may believe that your business is too small to warrant the expense of a CRM. For the new advisor, adopting a CRM early helps you implement processes and develop organization that will help you grow and stay efficient when your book is no longer small. It’s much easier to establish great habits when you are small and agile. Changes, particularly big ones, become increasingly difficult when you have a large client base and staff to balance.

So if you’re now convinced that you need a CRM, where do you start? There are dozens of options out there and all of them have their own pros and cons. I suggest you use the following steps to help make the best decision for you and your business.

  1. Document what’s important to you. Some advisors have an established book of business they are trying to maintain and to which they want to provide excellent service. Other advisors may be big on marketing and are focused on obtaining new clients. It is important to know whether a CRM’s strengths align with your goals.
  2. Shop around. Don’t just pick the biggest name in the business or the one that tops the search rankings when you Google “CRM.” Most CRMs offer a trial so you can see what life would be like using their product. Yes, it may extend your evaluation process, but this period is critical in ensuring you find the most appropriate CRM for your office.
  3. Focus on integration. Look at the integration capabilities of the CRM, especially if you’re in the process of choosing other technologies at the same time or have technologies you’re currently using that you’re unwilling to give up. Huge efficiencies can be achieved when you have products that work well together. Time saved through integrations can be spent with clients and prospects or performing other business-necessary activities rather than manually performing work over and over again to get your data into all of your tech applications. A great CRM can become your data hub.
  4. Commit to change One of the most common downfalls of a new adoption is that people are not willing to change their behavior. It starts at the top: If you as an advisor are willing to make the CRM a priority, then your team will follow.   

In the end, I think back to my dad, carrying that Rolodex with him, making sure he was never far removed from access to his customers. It’s funny to me that the modern-day successor to the Rolodex can now be accessed on a mobile device, and that you can communicate with clients on the same device where you store their contact information. And, of course, everyone carries his or her phone anyway, so it’s not an extra thing to pack for vacation.

But whether on the road or in the office, a CRM isn’t just some glorified Rolodex. It can be, in fact, a transformative tool for your business if you take the time to evaluate, implement and commit to the CRM as the hub for your office’s management of clients.

— Read How to Add a Robo Platform and Up Your Advice Game on ThinkAdvisor.

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