When it Comes to Advisor Tech, Size Does Not Matter

While it may sound counterintuitive, when it comes to using technology to run an advisory business in the wealth management industry, size does not matter.

This theory was put to test at the recent FPA NorCal conference held in late May in San Francisco. Over 700 attendees made up of advisors, technology vendors, custodians and asset managers gathered over two days of non-stop networking, educational sessions and high-profile keynote presentations that has made NorCal a perennial “sold-out” event on the conference circuit.

(Related: The Goldilocks Theory of Fintech)

A popular presentation at NorCal this year was a fascinating panel discussion entitled “Maximizing Your Business Value Regardless of Size.” During this standing-room only session, three executives from a small, mid-size and large advisory firm shared their approach to working with clients and delivering advice, and the unique challenges that come with managing an independent advisory firm.

The key takeaway here was that no matter how big, small or in the middle your firm is, technology is mission-critical to succeed.

Representing the small faction was Milo Benningfield of Benningfield Financial Advisors. Benningfield oversees a staff of three and manages $150 million for 45 families. Sabrina Lowell, COO of Mosaic Financial Partners, manages a staff of 20 and with AUM of $600 million represented the mid-sized firm. Rounding out the panel on the big side was C.J. Rendic, CEO of Parallel Advisors, a large firm with over 40 employees overseeing $1.8 billion in AUM.

Moderated by Shannon Pike, current FPA President, the panel covered a wide array of topics, with the key theme of how technology was critical to their success.

“I started Parallel in my house with a vision to create a very large, scalable organization,” said Rendic. “At the very beginning, I knew that technology, efficiencies and systems would be a core focus the entire way. I came from management consulting so having a technology mindset allowed us to start scaling from the beginning, avoiding many of the manual processes that creep into advisory practices as they grow.”

Rendic does believe that “bigger is better” for the many benefits that scale brings his firm, most notably the ability to pay premium salaries and benefits to attract and retain the best advisors.

On the other hand, Benningfield believes that “smaller is better” in that, very similar to the legal profession where Benningfield came from, the ability to specialize and provide more autonomy for advisors provides a unique client experience that will always be in demand.