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Maximize Client Engagement with New Technology: Factors to Consider

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Converging market forces are creating a sea change in the financial advisory world. Price compression, zero-interest rates, the discussion over active versus passive investing and the advent of the robo-advisor have made for more cost-conscious investors.

Technology can help advisors address these expectations and provide the best solutions for their clients. But given the cost, time and reengineering process of a major technology purchase, firms need a better understanding of how to successfully select and implement a new system — and ensure complete integration — in order to encourage user engagement and maximize return on investment.

Why is Integration Important

When selecting a new system, it is important to understand how technology can help advisors be more effective and provide better service to clients.

Systems that offer advanced integration — those with automatic data sharing or no apparent boundaries between apps — provide a valuable benefit by allowing advisors to spend significantly more time on client-facing activity.

In a recent survey by Aite Group of financial advisors, independent advisors reported they increased their time spent on client-facing activity from 58 to 69 percent with advanced integration. [i]

For independent broker-dealers, it went from 39 to 50 percent. But it was the bank-trust space where the change was even more dramatic: from 46 percent client-facing activity to 75 percent with using integrated technology. [ii]

Understanding your technology needs – and ability

Several factors influence a firm’s choice of technology — not least of all the budget. When budgeting for a new system, advisors must consider their needs, observe their peers and keep future requirements in mind.

New systems may not cost the same as current systems, since so many new features and innovations are available with a replacement. So it won’t necessarily work to use current expenses as a basis.

Instead, firms can look at what peers and competitors are using to understand your options – and potential costs. This can help organizations gauge whether their budget is realistic or needs adjustments.

It’s also important to consider both current and future technology needs. A common misstep is reducing minimum requirements to meet budget, leave gaps, that will need to be filled just a year or two later. Needs change over time. In that light, it may be better in the long run for firms to postpone a new system purchase until they can afford the right one.

A number of other factors may influence price, including the number of clients and/or employees and the amount of data on the system. Upgrade costs also vary by the type of system (e.g., server- versus cloud-based).

Successful implementation

Once advisors have decided on a system that meets business and user needs, implementation is  next.

This is a crucial stage, as many new system initiatives fall short of success. According to an IDC study on business technology initiatives worldwide, 20 to 25 percent of IT projects fail to provide the expected return on investment (ROI).[iii]

Many factors can cause these projects to fail, from inadequate technical resource planning to poor time management.

But the primary driver is low user adoption. No matter how smart the solution, without actual user engagement and support, ROI will not materialize.

Firms can take a number of steps to increase the success of such projects. First and foremost, less is more when it comes to user training. The more intuitive a system is, the more likely it is that employees will use it. Systems should be tested for responsiveness, speed and stability — and companies should be on the lookout for a scalable solution.

Strong top-down support throughout implementation is also important – senior leadership sets the vision and structure for all initiatives.

It’s also important to have full transparency during implementation, with a clear timeline, deadlines and regular status meetings.

In addition, a two-way communication between user testing and feedback is essential. Having the flexibility to modify the design or extend the timeline based on feedback will also go a long way toward user acceptance.

In this volatile world, independent technology solutions simply won’t do the trick. A solution must be able to support a client’s full life cycle and deal with any issues that may arise as a result of this changing landscape. With careful planning and insight, advisors can leverage these new solutions to meet clients’ expectations and deliver an outstanding experience.

The information, analysis, and opinions expressed herein are for informational purposes only. Nothing contained in this article is intended to constitute legal, tax, accounting, securities, or investment advice, nor an opinion regarding the appropriateness of any investment, nor a solicitation of any type.

[ii] Ibid

[iii] Source: IDC