Is Your Outdated Technology Putting Your Firm at Risk?

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You may have heard in the news recently that top advisory firms are investing millions in technology to streamline their operations and improve their clients’ experience. In particular, Ron Carson’s firm, The Carson Group spent $52 million on a new “Digital Client Experience” platform according to Financial Planning. What’s more, business is reportedly up as a result, with the revenue increasing 243% over the last five years.

The technologies we use on a daily basis are the fuel to grow our businesses. Advisors who embrace new technologies enjoy increased profitability and efficiency. But it’s easy to fall behind the technology curve and find yourself out of date. Is your firm positioned at the forefront or falling behind?

The Risks of Falling Behind

Without effective technologies to run your firm and provide client service, you risk slipping efficiency and decreasing value. More importantly, outdated technologies and systems could put your clients’ personal information at risk and leave your firm open to lawsuits.

It’s critical to embrace technologies for your practice, but which are the most important? The most critical technologies for financial advisors include:

  1. Customer relationship management (CRM) system for managing clients and prospects. Your command center for staying organized and keeping client information at your fingertips.

  2. Website and marketing tools to manage your website, blog, email newsletter, social media, and other marketing communications.

  3. Financial planning software for account access, preparing client reports, creating financial plans, and collaborating with clients on their accounts.

Failing to have an up-to-date CRM almost certainly will cost you time and energy. But it might also cost you new business. Advisors that effectively use CRMs close more business and manage more assets than advisors who don’t have a CRM.

An out-of-date website and marketing engine can make getting referrals and new prospects an uphill battle. Consistent marketing communication can help bring on new prospects, but will also bolster your referral pipeline by reminding everyone in your network what you do and how you can help.

But a bigger risk to your current clients is failing to have a strong financial planning platform. One key reason clients hire a financial advisor is to help them stay organized. Tools like eMoney and Money Guide Pro offer clients one centralized location for their financial planning information including:

  • Account access

  • Secure document storage

  • Customized reports

  • Decision-making tools

If you’re not offering a top of the line financial planning software, your clients may look elsewhere. Top financial planning software platforms now allow prospects to set up accounts and start using the technologies before they start working with an advisor, which means if you’re not providing the tools for your clients, another advisor might be.

How to Choose the Best Technologies for Your Firm

Mistakes in choosing technologies can waste hours of productivity each week and cause incredible headwinds to growth. At worst, they could disrupt your client experience and cause confusion for your clients.

But choosing new technologies for your firm doesn’t have to be risky. Take your time in selecting new tools so that you can be confident in your decision, fully invest in learning how to use them, and have to change systems less frequently.

Follow these steps to avoid making a choice you regret:

  1. Ask advisors with similar business models. Some advisors query which systems the top producing advisors are using, which may or may not apply to the size and complexity of their own firm. Top advisors may use technologies that are more complex and expensive than an advisor with fewer clients needs. Seek out a few firms that you admire who are the same size or slightly larger than your firm. Chances are, technologies those firms recommend will be a smart fit for you.

  2. Consult with your home office. It’s important to ask your home office folks which technologies they recommend because they are aware of negotiated price discounts and integrations that may make your life easier.

  3. Make a short list, then do a demo. Get together a list of 3-5 highly recommended providers for the system you are looking for, then do a one-on-one demo if possible to ask questions and see the tools in action. Take notes of anything you think is lacking or a deal breaker. Compare your notes on your shortlist and you should have a clear winner.

  4. Call customer service before you purchase. I see advisors leave technology providers most often because of service related problems. Call the customer service department before you purchase to check the wait time as well as the friendliness and capability of who answers. Ask a few questions to kick the tires.

  5. Check out the available ongoing education. Make sure the technical support and resources fit your needs. If you are the type of person who prefers to watch how-to videos, make sure the technology provider you select offers a video library. If you need to pick up the phone and speak with a person, be sure that option is available.

  6. Think of the future. We all plan to grow our businesses in the future. But if you’re serious about growing in the double digits each year, make sure your technology can scale with your firm. Be sure to evaluate pricing that will serve your needs now and at double the size to be sure the price increases won’t be prohibitive in the future.

  7. Manage your risk. All technologies will fail from time to time. If your tablet breaks down before a lunch meeting, your business will survive. But if your clients can’t access their accounts for a week, it’s a catastrophe. Think through the risk involved if the technology fails and formulate an emergency backup plan if necessary.

  8. Immerse yourself in learning the new technology upfront. Learning a technology well from the start is a lot like investing for retirement early, in that it will continue to reap rewards over the long term. Putting time and energy towards learning the basics will make you more powerful and efficient each day you use the new system. You will take advantage of more features, waste less time, and enjoy the process more.

Your technology choices may be the most important investments you make in the future of your firm. But before you get paralyzed when making technology decisions, remind yourself that the biggest risk is falling behind and not embracing technology at all. Commit to choosing the best tools available to keep yourself organized, make your firm efficient, and provide your clients with amazing service.

Claire Akin