Must-Have Technologies for Holistic Financial Planners
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The competitive landscape is quickly changing for financial advisors. According to Business Insider Intelligence, robo-advisors will manage $1 trillion in assets by 2020 and $4.6 trillion in assets by 2022, driven by incumbents rolling out their own robo-advisor technologies. Many traditional advisors are also incorporating robo-like features, such as mobile apps, client portals, and data aggregation, raising the bar for everyone.

If you’re on the fence about these technologies, consider this: Tech-savvy advisors create 50% more investment proposals than those who don’t. They serve 57% more clients, have larger books of business (78% larger) and have 46% greater practice revenue, according to this study conducted by Envestnet. They also tend to attract more high net worth and Gen X and Y clients, while maintaining higher client satisfaction ratings that can lead to reduced churn rates.

Here are a few of the technologies that can help you realize these benefits and compete in the rapidly changing market.

CRM Solutions

The sheer volume of data that needs to be tracked for each client has made a customer relationship management, or CRM, solution a necessity. According to RIA In A Box, about 57 percent of emerging RIAs with under $50 million in AUM use a CRM compared to 73 percent for those that manage over $50 million. These CRMs can help with everything from automating workflows to centralizing records to instantly accessing client information before a call.

The most popular advisor CRMs include: 

  • Redtail – Redtail is the most popular CRM solution among advisors with a 23 percent market share. Unlike Salesforce, it was built specifically for advisors with document imaging, email archiving, and other useful features for advisor workflow.
  • Salesforce – Salesforce is a popular CRM across all industries, which means that it integrates with almost anything and features the extensive AppExchange to add specific functionality. It ties for the top spot among advisors with a 23 percent market share.
  • Microsoft – Microsoft Outlook is the third most popular CRM with a 14 percent market share. Often times, this is used as a default by advisors until they migrate to another more feature-full CRM solution provider, like Redtail or Salesforce.

Reporting Tools

Reporting is essential to communicate your value to clients by showing them all of the latest performance data. But, not all reporting is created equal. Tech-savvy advisors provide interactive or visual reports to connect with clients rather than simply sending paper statements. You have to strike a balance between being comprehensive, to win confidence, and being easy-to-understand, to show value.

The most popular reporting solutions include:

  • Orion – Orion offers one of the most extensive reporting platforms with an easy-to-use report builder and preset themes to get started. Orion also integrates with multiple apps, automating the reporting process and giving you a fully-customized reporting solution.
  • First Rate – First Rate is a popular option that offers a comprehensive and robust CRM and client reporting platform, enabling wealth managers to master their workflow and optimize client relationships.

Planning Tools

Most advisors must evaluate financial trade-offs with their clients on a daily basis. Even if you’re great with numbers, the sheer number of variables is too complex to compute without the help of technology. Financial planning software helps you project outcomes to help clients make informed decisions and gives you the tools to put a portfolio together. But, there are many different technologies to choose from with different feature sets available.

The two most popular planning tools are: 

  • MoneyGuidePro – MoneyGuidePro is one of the most popular planning tools with 31 percent market share. With its clean design, the platform is extremely easy-to-use, well-known among advisors, and integrates with most other technologies.
  • FIS WealthStation – WealthStation provides a holistic, client-centric view, including held-away upload features. WealthStation also provides integrated tools and extensive support.

Mobile Apps & Siteswealth access tablet

Smartphones have become ubiquitous throughout the United States. According to Pew Research Center, a quarter of U.S. adults say they’re “almost constantly” online and 83 percent of them are using a smartphone, tablet, or other mobile device. In 2016, mobile devices drove more than half of traffic to top sites, which outpaced desktop computers and laptops, while millions of mobile apps are downloaded each day.

Mobile apps are quickly becoming an expectation for clients. You can build your own from scratch or you can use a white-label solution. We discussed the pros and cons of each approach in an earlier blog post, but most advisors are best off using a white-label solution to avoid unnecessary time and money on development-related tasks. The only exception is if you have some very specific requirements that white-label solutions don’t provide. 

In addition to mobile apps, it’s important to ensure that your website is mobile-friendly. Most modern web development agencies and services, such as Advisor Websites, Twenty Over Ten, or Mineral, ensure that this is the case by using mobile first design principles. But, if you have an older website, you may want to ensure that the mobile experience is up-to-par and encourage any mobile traffic to download your mobile app for the best possible experience.

Client Portals

Client portals are secure websites that provide clients with access to their personal financial information and management tools. For example, clients might be able to log in and see their account balances, performance, allocations, and holdings all in one place. The rise of personal finance apps, such as Mint, has made client portals an expectation rather than a feature, while robo-advisors have been pushing the envelope with forecasting tools and aggregation.

Nearly one-third of advisors use broker-dealer or custodian platforms for client portals, while the remainder is divided among various third-party providers. When evaluating different solutions, it’s important to ensure that the portals are white-labeled to match your firm’s branding. Keep in mind that broker-dealer or custodian portals may also lack some features and functionality that may be contained in third-party client portals.

We provide advisors with white-labeled client portals that are completely customizable out-of-the-box with an API that integrates with external technologies, such as Orion’s or FIS’ client portals. Using drag-and-drop functionality with advanced views, you can customize the client experience to include total wealth, complete balance sheet, cash flow, asset allocation, and various other views, as well as customized reports, document vaults, and alerts.

Data Aggregation

Many clients – especially HNW clients – have assets that are spread across many institutions, which can make it challenging to keep everything up-to-date. Data aggregation technologies are designed to pull in all of this data, including held-away assets or assets at smaller institutions, to provide the client with a complete view of their financial life. That way, you can also make decisions based on the most relevant and up-to-date data available.

Click here to download our case study and find out how Savant Capital Management broke through the data noise with Wealth Access.

Data aggregation is built into many advisor platforms, but not all solutions offer the same functionality and data quality matters. For example, many platforms only provide access to large institutions and might miss smaller or held-away accounts. Our Intelligent Aggregation technology gathers data directly from over 20,000 different financial institutions through multi-tiered data sources that are updated every day.

Proposal Generation

You’ve probably drafted thousands of proposals to send to prospects, but there are much more creative ways to go about the process than choosing premium cardstock. For example, risk assessment surveys can help engage clients at the onset and mine valuable data that can be used to craft a tailored proposal. Many technologies combine these two elements – risk assessment and proposal generation – into a single highly-effective solution.

Some of the most popular options include: 

  • HiddenLevers – HiddenLevers enables you to quickly generate proposals that include risk tolerance capture and fee attribution to satisfy regulatory demands. Prospects can compare their current portfolio to the recommended portfolio in the event of a market crash or significant drawdown.
  • AdvisoryWorld – With the Advisor Proposal Generator, you can enter prospect information, establish a risk profile, review existing accounts and compare proposed accounts. You can also generate proposal documents, Investment Policy Statements, and other FINRA reports.

The Bottom Line

Advisors face increasing competition from robo-advisors and tech-savvy traditional advisors. These trends have put pressure on them to implement new technologies to improve the client experience and delegate time-consuming tasks to focus on building relationships. The good news is it has never been easier to get started using new technologies to improve your business and new options are coming out every day.

If you’re interested in learning more about our solutions, contact us today for a free consultation and demo to learn how we can help power your business. 

Note: The market share data used in this post was taken from Financial Planning Magazine’s Annual Tech Survey in 2017.

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