Financial advisors have a host of software tools available to them, but they don’t always know how to use them properly – and that could put them behind the curve when serving clients.
Research from Boston-based asset and distribution analytics company Cerulli Associates published in January revealed that 75 per cent of advisors in the United States felt they could be using their existing technology tools to greater effect. Furthermore, the research found that advisors struggled to use a variety of products.
Advisors can use tools provided by their dealers, when available, or they can buy their own software. The latter approach can often create compatibility problems that stop advisors using software to its fullest extent, explains Curtis Findlay, president and financial advisor with Compfin Management Ltd. in Ridgeway, Ont., and chair of Advocis’ technology task force.
“Those systems not provided to advisors through their dealers often create complexity by not integrating with the dealer’s back-office system,” he says, citing portfolio-management tools as an example. “Depending on what source provides data to the tool, there are instances when the portfolio tool may not match their dealer’s risk rating of a holding.”
Integration is top of mind for Bill Jack, senior vice-president of financial services at IG Wealth Management in Toronto. The Winnipeg-based firm provides a range of tools for its advisors. This autumn, it will begin migrating the customer relationship management (CRM) software for its more than 4,000 advisors to Salesforce. This will enable the company to integrate the CRM with the NaviPlan financial planning software its advisors use to give them a more cohesive view of their clients’ information in one place.
However, integration alone isn’t enough, says Mr. Jack. Advisors need help adopting them. The Salesforce project will be the first deployed using IG Wealth Management’s agile project management system.
“You cannot just invest in technology,” he says. “You have to make a very large commitment to [managing change in the organization] as well, or these things just do not go smoothly.”
IG Wealth Management began involving advisors in the planning and deployment of the software from the beginning and finding “champions” who can promote its benefits in regional offices. The firm will also provide technology professionals to help support advisors on the ground, he adds.
CRM is one tool with which advisors in general could do much more, says Donnie Ethier, director of wealth management research and consulting at Cerulli.
“Advisors are using their CRM tools, but they’re not using it to their fullest extent,” he says, adding that advisors often use upgraded versions of CRM tools without exploring new features, such as those that allow them to collaborate and share information.
The difference isn’t necessarily down to the user’s age, Mr. Ethier says. Often, teams of advisors use CRM systems more effectively than individual advisors because the need to keep track of client communications across the entire team is more important. These teams might even have a junior member responsible for maintaining the CRM database.
Darren Coleman, senior vice-president, private client group, and portfolio manager at Coleman Wealth, a division of Raymond James Ltd. in Toronto, uses his CRM as the backbone of his and his team’s practice. The team collects information gathered during conversations, such as whether the client has a cottage, what hobbies they enjoy and where their children went to university.
This approach enables the team to segment customers for new marketing initiatives, Mr. Coleman says. “If there’s a particular tax issue around cottage ownership, we can target that message to the people that find it of greatest interest.”
CRM is just one technology tool that advisors should be considering as a way to innovate with software, says Mr. Ethier. There are plenty of tools that advisors can source on their own to differentiate themselves from the competition. One example is advanced account aggregation, which allows advisors to account for an investor’s total portfolio, including assets not on that advisor’s book. “How can you be offering comprehensive advice if you don’t at least have insight into how to weigh assets?” he asks.
Although back-end tools are important, advisors shouldn’t forget about improving the client experience when expanding their technology usage, Mr. Coleman says.
One way to do that is through is video conferencing. Mr. Coleman says he and his team used to rely heavily on face-to-face meetings, but busy clients often can’t make the time to travel for them. Skype meetings give clients a face-to-face experience without putting a big dent in their schedule.
These tools are more than nice things to have, Mr. Coleman says. He draws a comparison with companies such as Uber, which has disrupted the taxi business massively.
“Uber came along with a vastly better consumer-oriented solution, and it cleaned everybody’s clock,” he says. “I think the financial services industry needs to pay attention to that or we’re all going to get ‘Ubered.’”