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Technology > Marketing Technology

4 Steps for Covering All the Tech Bases

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In the movie Bull Durham, the angry baseball coach tells his hapless team: “This is a simple game. You throw the ball, you hit the ball, you catch the ball.”

If you’ve ever played baseball, or any other sport, you’ll probably see the truth in this quote. To some degree, everyone who plays the game has to be able to throw, hit, catch and run.

But the devil is in the details. While all players have to be able to do those tasks, not every player does them with the same ability.

Tech Home Run

Likewise, all advisors have some commonalities. Most provide investment advice, for example. But how do they differentiate themselves from the hundreds of thousands of other advisors?

Technology can help set your firm apart. First, though, you must define your services to understand what technology can help you the most.

Advisors can differentiate themselves in two ways: Through a documented service model, or through client segmentation.

A documented service model allows a firm to deliver a consistent experience. Of course, that model can be different for everyone; service can mean client access to an advisor, special reporting or something more experiential. 

Client Segmentation

What’s true overall is that service models benefit from narrow niches — such as client groups like doctors or teachers — as this segmentation allows you to specialize in how you provide clients with advice.

Many advisors segment their clients based on asset size or revenue, but the services provided also can be segmented by group.

How do you know if you’re using client segmentation properly? If all your clients are receiving the same level of access and reporting capabilities, and have the same expectations for what they receive, then you aren’t using client segmentation. You are using client experience. And likely, your growth is more difficult and harder to manage than it needs to be.

Before you choose new tech, it’s important to first step back and examine client segmentation and your service model. Tech choices should reflect how you offer services to your clients. In other words, they are about having new tech fit your business model and not vice-versa.

Tailored Solutions

Follow these four steps as a guide before you choose new tech.

Define Your Goals: Do you need to grow fast, or simply manage your current client roster as you maintain a lifestyle business?

Define Your Client Experience: Do you need more client-facing digital tools, or does your client experience require other, more personal elements?

Define Your Budget: There are always statistics about how much each firm should spend on technology, but really, larger firms will have larger budgets. Analyze each solution you identify based on if they charge per-license or per use, and stick within your budget.

Define Your Tech by OX or CX: Technology can serve either the operational experience (OX) or the client experience (CX). For operations, you may need to select payment or accounting tech, while for client experience you may need to look for a CRM, financial planning and client portal.

It’s also entirely likely there will be overlap between which side of the house your tech services, so look for solutions that give you options for both.

Don’t Got It Alone

No matter the size of your advisory firm, look outside your own experience when making technology decisions.

Leverage your partner relationships. Each can offer assistance and sometimes subsidized pricing for solutions. Your custodians are a great resources to lean on.

Lastly, look at software as an investment. Over time, you should be able to expect a nine-times return on investment over the lifetime of your software, but it won’t happen overnight.

Put a plan in place for implementation, stick to it, and focus on getting the most out of your tech. It’s critical to covering all the bases for best serving clients and for developing your team.

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 [email protected].


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