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When advisors operate under a wirehouse or bank, they become accustomed to accessing some small subset of technology solutions curated by their larger organization. When these advisors break away from their firms, they are introduced to a broad and confusing technology landscape, and tools that expand far past what they had been using in their previous role.

These advisors are also simultaneously learning how to operate their own practices outside of a larger entity, perhaps for the first time. Through my experience running an RIA and an outsourced chief investment officer service, I have learned that technology consultants are the most effective with helping to get up to speed on a tech offering with minimal disruption from a breakaway transition.

The 3 Major Tech Mistakes Advisors Make

Upon making the transition from wirehouse or bank to running an independent shop, advisors can find it hard to know where to begin. Because of the overwhelming amount of technology solutions available, advisors tend to make one of three major mistakes:

1. Enlist subpar technology. Advisors are faced with dozens of technology options, and for an advisor without deep knowledge (which, let’s be honest, is a full-time job to stay on top of!) of the tech landscape, it is very easy to be drawn into a solution that does not provide the range and depth of resources necessary to build a firm and improve client relationships.

2. Become a vendor manager. Advisors can end up juggling a variety of disparate tools that may overlap in functionality or may not be properly integrated. Many financial technology solutions address some small part of an advisor’s workflow — dealing with multiple technology solutions that may not be properly integrated can become a huge time drain and can lead to confusion for  advisors and their clients.

3. Not using the tech to its full potential. All-in-one technology solutions have been steadily gaining popularity. According to the T3 2019 Software Survey of more than 5,500 independent financial advisors, around half of all advisors have employed all-in-one technology solutions. These all-in-one solutions like Envestnet provide the advisor with seemingly limitless capabilities, but this can often overwhelm the advisor and lead them to not use the tech to its full capacity.

In-House vs. Tech Consultant

Breakaway advisors that have implemented a new solution often hire an internal, technology-focused employee to address their firm’s tech needs. These advisors recognize that they don’t understand this new and expansive technology and have made an effort to address this need. In my experience, one of the issues is that hiring such an employee is not the most effective method to manage a firm’s tech needs.

Through my work consulting other advisory firms as well as in my own business, I have found that the cost of hiring a tech consultancy is far less than the cost of hiring and training employees internally, and far more effective. The expense, and more importantly, the time requirement to hire, train and manage in-house tech expertise, is much higher than that required by a tech consultancy.

How Consultants Operate

Technology consultancy is a foreign idea to many advisors, especially those breaking away from a larger firm; however, it is becoming a more popular and viable option to establish and maintain proper usage of technology. These consultants can connect directly with the technology provider, conduct educational sessions with employees and share easy-to-digest information on product updates and industry best practices. Additionally, consultants take time to understand the firm and its differentiators and curate trainings to fit the needs of the firm’s advisors and clients, rather than relying on blanket webinars directly from the technology provider.

A prime example of how consultants operate is LibertyFi — a consultancy that works closely with Envestnet to cater the technology’s broad and deep offering to fit the needs of RIAs. Both my RIA and OCIO work with LibertyFi to ensure our advisors and employees understand what parts of the technology they need to use day in and day out. Firms like LibertyFi understand that advisors are not engineers or computer scientists and that technology can be incredibly confusing, especially if an advisor doesn’t know where to begin. Consultants can ease a firm into its technology offering and enable it to grow as the technology continues to develop and improve.

Breakaway firms should consider enlisting the help of a technology consultant to streamline their transition and assist in building their practice. As technology in our industry is rapidly evolving, it’s important that advisors recognize that there will never be one “set it and forget it” solution. Consultants can ensure all of a firm’s employees are up to date on what tools and services they need to offer their clients, both to set up a firm’s technology offering and to continue training employees and ensuring the firm is updated on their technology’s evolving components.


Clint SorensonClint Sorenson, CFA, CMT, is the co-founder of WealthShield. Over the last decade, he has developed several proprietary quantitative strategies that combine behavioral, fundamental and technical analysis for a truly holistic market view. Clint oversees the development and maintenance of all asset allocation models for WealthShield.

Along with his partner Robert Leggett, Clint co-authored the 2015 book “Invest to Prosper,” a comprehensive guide to personal wealth and investing. Additionally, Clint authored several index methodologies that are tracked by exchange traded funds and accessible using direct indexing.

Clint is a past President of the CFA Society North Carolina, as well as a former board member of the CMT Association. He holds a bachelor’s degree from the University of North Carolina at Chapel Hill.