Technology is meant to simplify things, make the financial advisory business more efficient and save advisors time. When Mike Damas set up his independent RIA firm Maryland Capital Advisors in 2005, he found that the technology system he’d invested in was doing the opposite.
If anything, Damas and his colleague were spending more time than they should have been on tasks that technology should have taken care of. That meant they were able to spend less time on reaching out to clients to properly establish and grow the business.
In the decade prior to setting up Maryland Capital Advisors, Damas had gained significant expertise in the institutional bond market and he’d managed a hedge fund.
“I didn’t realize,” he said, “that the performance reporting system I’d invested in looked nice, but lacked in proper data management. Fixed income has some complexities that straight equities and mutual funds don’t, and early on, I realized that our performance reporting system just couldn’t get those, which meant I needed to be hands-on to get the data right.”
Damas moved on to another system that got the data right, but there, too, was a lacuna since the new platform was not up to the mark in terms of daily reconciliations with Maryland Capital Advisors’ custodians.
“Every morning, we needed to download the transaction and price files from our custodians and make sure all the transactions were accurately booked from the day before, so it usually wasn’t until around 10:30 or 11:00 a.m. on an average day that we had everything reconciled and we knew we could close the previous day’s business and start the new day,” Damas said. “If some days there were special situations that required extra time to reconcile, we hit a snag and often wouldn’t be done till 1:00 p.m.”
As his business grew, Damas – whose firm is now responsible for $180 million in assets under management – became more aware of what he needed his software systems to do in order to allow him to better perform his duties as a financial advisor, communicate with his clients, and reach out to and cultivate prospective clients.