Close Close
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards

Technology > Marketing Technology

When it Comes to Advisor Tech, Size Does Not Matter

Your article was successfully shared with the contacts you provided.

While it may sound counterintuitive, when it comes to using technology to run an advisory business in the wealth management industry, size does not matter.

This theory was put to test at the recent FPA NorCal conference held in late May in San Francisco. Over 700 attendees made up of advisors, technology vendors, custodians and asset managers gathered over two days of non-stop networking, educational sessions and high-profile keynote presentations that has made NorCal a perennial “sold-out” event on the conference circuit.

(Related: The Goldilocks Theory of Fintech)

A popular presentation at NorCal this year was a fascinating panel discussion entitled “Maximizing Your Business Value Regardless of Size.” During this standing-room only session, three executives from a small, mid-size and large advisory firm shared their approach to working with clients and delivering advice, and the unique challenges that come with managing an independent advisory firm.

The key takeaway here was that no matter how big, small or in the middle your firm is, technology is mission-critical to succeed.

Representing the small faction was Milo Benningfield of Benningfield Financial Advisors. Benningfield oversees a staff of three and manages $150 million for 45 families. Sabrina Lowell, COO of Mosaic Financial Partners, manages a staff of 20 and with AUM of $600 million represented the mid-sized firm. Rounding out the panel on the big side was C.J. Rendic, CEO of Parallel Advisors, a large firm with over 40 employees overseeing $1.8 billion in AUM.

Moderated by Shannon Pike, current FPA President, the panel covered a wide array of topics, with the key theme of how technology was critical to their success.

“I started Parallel in my house with a vision to create a very large, scalable organization,” said Rendic. “At the very beginning, I knew that technology, efficiencies and systems would be a core focus the entire way. I came from management consulting so having a technology mindset allowed us to start scaling from the beginning, avoiding many of the manual processes that creep into advisory practices as they grow.”

Rendic does believe that “bigger is better” for the many benefits that scale brings his firm, most notably the ability to pay premium salaries and benefits to attract and retain the best advisors.

On the other hand, Benningfield believes that “smaller is better” in that, very similar to the legal profession where Benningfield came from, the ability to specialize and provide more autonomy for advisors provides a unique client experience that will always be in demand. 

While Benningfield acknowledged that he will have challenges when it comes to expertise in other areas and succession planning, he noted that with his study group he can tap into those resources on an outsourced basis while remaining small and nimble. Benningfield, however, is in complete agreement with Rendic in that he wouldn’t be able to exist in his smaller world without the benefits of the latest technologies.

Of course, Lowell, who lands pretty much in between those two, said with a wry smile that “the best version is a mid-size firm.” Her reasons are that in the mid-size world, firms have much better control over firm culture and the firm’s brand, as those are the first things that get stretched as you add more people, yet firms still need a critical mass of size to establish culture and a brand in the first place.

From a technology perspective, it is fascinating that each of the three firms, regardless of size, all point to the ability to automate processes as key to success.

“We take one Friday of the month as a ‘process day’ to map out, document and review in excruciating detail our biggest processes, from onboarding to financial planning to trading to the hundreds of administrative and compliance tasks we have to complete,” noted Benningfield. “The reason we do this is so that we can then start to automate those processes through our CRM and workflow tools – it is critical since we have such a small staff.”

Lowell agreed. “We strive to ‘junctify’ all of our action steps, meaning we can use our CRM Junxure and its powerful workflow automation tools to streamline these processes and ensure that nothing falls through the cracks so that everything we do becomes a repeatable process.”

“From the large firm point of view, it is absolutely mandatory to have document management and client relationship technology to go paperless,” Rendic notes. “Cloud-based systems enable us to manage our large operational footprint and continue to build scale on our journey to get to $10 billion.”

So, while the conventional wisdom espoused lately is that in order to thrive in a more complex and competitive wealth management industry, firms need to get big and get big fast, the success of these firms shows that the market has room for all sizes and styles of firms. The caveat, of course, is that technology has to be in place as the equalizer.

To learn more about what went on at the FPA NorCal conference, check out the many tweets on the #FPANorCal hashtag on Twitter.

— Read Supporting the Entrepreneurial Advisor on ThinkAdvisor.


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.