Practice Management > Building Your Business

Moving From Legacy Tech to Integrated Platforms: The Advisor’s Why, When and How

Your article was successfully shared with the contacts you provided.

Bulky legacy systems and processes can lead to significant tech fatigue among financial advisors, as well wealth and fund managers. 

Common wisdom might lead a firm to believe that it’s best to save cash in the short term by piling together myriad solutions, putting off the long-term investment in updated and integrated technology solutions. But competition demands that advisors move to comprehensive, integrated platforms to automate processes and improve the advisor-client relationship, say many wealth management experts.

Today, advisors are feeling the pinch as organic industry growth continues to slow. Fidelity Investments reports that the wealth management industry saw organic growth fall to 6.7 percent in 2015 – the lowest level in the past five years. Streamlined and more efficient technology is just one way to make a practice more efficient – and more competitive.

Unfortunately, many advisors may still be using cumbersome and outdated legacy systems.

When to update?

So when should advisors dump their a legacy systems?

It’s time when advisors start to note the growing pains at the firm, and they’re willing to seek out solutions and invest in their business. Smart firm leaders also know that investing in the short term can lead to countless savings in the long term.

For firms stuck with legacy systems, after all, advisors and staff are often left spending considerable amounts of time downloading updates and patches and entering data across systems. Aside from the wasted time, advisors are dragged away from their primary responsibilities, too.

The human factor

An integrated, cloud-based platform can breathe new life into a practice, freeing up time to garner new business. But it can also mean bumps along the way to implementation if all advisors and staff aren’t on board.

Make sure to consider the human factor. Ensure that staff members are fully briefed and trained on the software and know how to use it in their roles. Firms might also consider leaving legacy systems on while the new platform is ramping up.  A soft turn-off can help acclimate everyone in the office with the new technology, with the added safety and comfort of a backup in case big issues crop up.

How to pick a solutions provider

Many third-party solutions providers are at the ready with integrated solutions, but selecting one often depends on the required capabilities and how involved the advisor wants to be in the process. Do they want to architect the solution? Or are they more comfortable with something prebundled?

A firm’s custodian can also provide advice on finding the right solutions provider.

The advisory industry’s knowledge gap

Despite the obvious benefits of updated systems, many advisors still seem skeptical about what they can do for their practice. The Financial Planning Association’s “Financial Planning in 2015: Today’s Demands, Tomorrow’s Challenges” survey indicated that 42 percent of the financial professionals didn’t feel that technology would serve a role in their business.

Yet these same advisors admitted to spending a large chunk of time gathering data. “For initial plans, planners are involved in data gathering 90 percent of the time either alone (63 percent) or in concert with a para-planner or assistant (27 percent),” the survey notes. Updated systems and solutions can make data-gathering a much easier, quicker and more efficient process.

Moving to the cloud

Leading advisors are moving further into open architecture with third-party stacks – and opening up connectivity in the process. This allows access to all types of high-quality and far-flung data.

In the end, it’s all about creating a more flexible and integrated solutions set for advisors to handle their CRM and portfolio and data management needs – from soup to nuts.