There’s a mansion in San Jose, California, with a backstory that can teach advisors a lesson about technology. Once the personal residence of Sarah Winchester, the widow of firearm magnate William Wirt Winchester, the mansion today is an architectural marvel — but not in a good way.

The mansion began as a simple farmhouse before Winchester turned it into a seven-story mansion — without the help of an architect. As a result, the mansion was constructed without any real plan and has oddities, such as stairways that lead to nowhere, windows that overlook other rooms, and doors that open to the outside instead of another room.

What does a mansion with no construction plan have to do with advisor technology? As firms age, they often add tech without a real plan for how it fits in with their existing solutions. Many firms add new software for just a few clients, or only halfway implement the hot new product from the conference circuit.

The result is a firm can be left with a tangled mess of technology instead of a tightly integrated and cohesive system.

To understand how the firm’s technology works together to benefit growth, ask these seven questions as you review your tech stack to determine its value.

  1. Why Do I Have This Piece of Tech?

Begin your analysis with an if/then statement: Do we need this specific software? If yes, then why?

Here’s an easy way to identify why you have a certain software. Determine how much revenue you tie to each piece of software; this will provide its value and reason for existence. If the software is revenue-positive, it has to be clear why.

  1. How Does This Tech Help Me Grow?

In addition to understanding profitability, you need to be able to attach real growth numbers to your tech. There are two ways tech can help with growth. It can either add scale and efficiency, or it can be a tool to help win new business.

Good tech is not always about adding more clients. Operational efficiency is the backbone of your end-client support — both need to be addressed in growth plans. By helping your internal team with added scale, you can increase profitability.

  1. Do I Get the Right Support?

Imagine going to a three-star Michelin-rated restaurant; you can’t wait to get in and try the chef’s latest creation. But then you wait four hours for your food, and the waitstaff completely ignores you. Even the best food in the world won’t taste as good when you receive poor treatment to go with it.

The same is true for technology partners.

Rolling out new tech to your team with no support behind it will negatively impact your firm. Eventually that experience will trickle down to your clients.

When reviewing your tech or looking to add a new solution, be sure you completely understand the resources each vendor offers your firm for training and support over time.

  1. Will My Software Be Updated Over Time?

You also need to ask vendors about their development road map. The technology you use should be enhanced the longer you use it.

Knowing what’s coming can save you from purchasing tech that duplicates functionality with another solution you already own. Know what each offers before you can take advantage of all its features.

In tandem with ensuring that your tech stays up-to-date is the need to keep your team trained and current with those new solutions and enhancements as they come out. You want to be using as close to 100% of your tech solution’s features as possible for the most return on your money.

  1. Do I Have a Backup Plan?

There are a few certainties in life. Death, taxes, and delays during a technology implementation. The fact is, no matter how good your onboarding team, unforeseen circumstances can alter your tech rollout.

If your implementation takes an additional quarter to finish, do you have a solution for how to keep your firm operating smoothly in the interim?

Knowing all your choices, and having the information at hand to compare them, can make all the difference in this scenario.

  1. Have My Needs Changed?

As time goes on, your client base may lean older or younger as you add — or don’t — new clients. How your clients’ needs change will affect how the tech you need changes as well.

Identify the most common needs of your clients to inform your tech decisions. For instance, if clients are trending older, you may need to look at adding estate planning technology.

  1. Will an Acquisition Alter My Tech?

The fintech space is nothing if not ever-evolving, as the recent acquisition of PortfolioCenter by Envestnet makes clear.

It’s a fact that M&A activity can affect the technology you use. If a tech solution you use gets purchased, be upfront. You have a right to know how you’ll be supported over the long-term, so don’t be afraid to ask.

Often, companies will put out webinars and extensive information on transitions. But if you don’t get the answers you need, don’t be afraid to look elsewhere.

Technology Review Action Plan

The technology you use has the capability to enhance your team’s operational experience and client service, but it also has the ability to drag you down with bloat and inefficiency if implemented poorly.

Review your tech annually by going through these seven questions.

If you can’t answer why you need a piece of technology anymore, or it doesn’t make sense from a profitability standpoint, it may be time to trim back.


Jarrod Upton, MBA, MS, CFP, is Chief Operations and Senior Consultant at Herbers & Company, an independent growth consultancy for financial advisory firms. He can be reached at jarrod.upton@herbersco.com.