Technology Update

CRM systems for the big guys

Larger firms have difficult decisions to make when choosing a system

Feb 13, 2011 @ 12:01 am

By Davis D. Janowski

Let's pick up where we left off last week in our search for the best customer relationship management system for larger investment advisory and hybrid firms.

For larger advisory firms, choosing the right system is like selecting the right marriage partner.

The complex job of selecting the appropriate CRM package is critical at a larger firm, because once a system is adopted, it is difficult and costly for a firm to extricate itself and move on.

Where you begin in the selection process depends on whether you are a breakaway shop starting from scratch, an established firm implementing a CRM system for the first time or an established firm moving from one system to another.

Because breakaways will need everything technological, not just CRM, they should first decide on their primary custodian, which will set the course of their tech choices and purchases.

Established RIAs already have custodial relationships, so chances are good that they will have been steered to an “approved” or “recommended” CRM system by their custodian's technologists or relationship managers.

When I arrived at InvestmentNews four years ago, the industry was convinced that a Niagara Falls of breakaway brokers were about to set up their own registered investment advisory shops. That scenario has yet to materialize, but the steady stream of breakaways nonetheless has fueled tech initiatives at all the major custodians.

The firm first out of the gate with new adviser technology — and the one with the most experience now under its belt — is Fidelity Institutional Wealth Services, Fidelity Investments' custody unit, with its WealthCentral platform.

We lack the space to go into all the core integrations of each custodial platform, so I will stay focused on the main subject at hand: CRM offerings and their place on the platform.

More than 600 RIA firms are using the heart of the web-based WealthCentral application (essentially an advanced and updated version of Fidelity's AdvisorChannel), and 100 of those firms also are using Fidelity's Seibel CRM system (from Oracle Corp.). Despite the low level of adoption — explainable in part by advisers' using other CRM applications or because Seibel is too complex for some advisers' needs — several advisers have told me that they are happy with the system.

Fidelity's offering will become increasingly appealing for hybrid RIAs in the wake of last week's announcement by National Financial Services LLC , Fidelity's clearing unit, of a new initiative to provide a fresh user interface and better integration of its Streetscape broker workstation with the tools available on WealthCentral.

Pershing LLC's approach to CRM is more product-neutral than Fidelity's.

Rather than centralize on a particular package, as Fidelity did, Pershing's NetX360 platform features open architecture and leaves the choice of CRM vendor to the adviser, though it mentions integration partnerships with Redtail Technology Inc. (see last week's column) and Scherrer Resources Inc., developer of Broker's Ally.

Without going into the major tech projects under way at The Charles Schwab Corp. and TD Ameritrade Institutional, the former is taking a Fidelity-like approach to CRM, while the latter is more Pershing-like.

Schwab Intelligent Integration will offer advisers a choice of two distinct solutions.

The first will be Schwab OneView Office. More of a turnkey offering, it will combine a customized version of Salesforce CRM with the Schwab Advisor Services custody platform and portfolio management.

A second offering, Schwab OpenView Gateway, will be more modular and allow advisers to integrate with leading third-party and Schwab technologies across several categories, including CRM, portfolio management, financial planning and document management. The first two CRM packages to be offered will be Microsoft Dynamics CRM and Junxure.

TD Ameritrade has invited several vendors to build integrations with its Veo platform.

Among CRM vendors jumping onboard are Redtail and Ebix Inc., which bought fellow CRM provider E-Z Data Inc. in 2009.

New RIA firms that haven't yet chosen a custodian should consider some of the smaller up-and-comers. Several such firms consider themselves specialists or “boutique” providers, catering to advisers that specialize in particular types of clients or investors.

A few to look at more closely include Shareholders Services Group, Trade PMR and Trust Company of America.

Firms seeking an all-in-one, independent tech platform have other options, as well.

For example, though the core of Tamarac Inc.'s Advisor X platform is portfolio re-balancing, a major component is a CRM program that acts as the nerve center for an adviser's daily work flow.

Advisor CRM, as it is called, is a highly customized version of Microsoft Dynamics CRM, which itself was built from the ground up to work in tandem with Microsoft Outlook. Tamarac Advisor CRM was introduced more than a year ago with the launch of the last major version of the platform, Advisor 9.

Of Tamarac's 400 clients, 50 firms are now on the Advisor X platform and use its CRM system, which is highly integrated with other core advisory applications including a proprietary performance-reporting module, MoneyGuidePro, for financial planning, ByAll Accounts for account aggregation and Schwab PortfolioCenter for portfolio management.

The starting price for the full Advisor X package with all its various modules and services is $30,000 for the first year for a firm of three advisers. More than 2,000 advisers use the Tamarac system, managing $175 billion in assets.

As an aside, I must note that I find Tamarac's willingness to talk about price refreshing. Because pricing is so important to advisers, I badger providers for such information, and most refuse to answer.

They say that pricing is too complicated and varies too much. Hogwash, I say.

A final word on buying CRM comes from Rich Gill, vice president of Focus Financial Partners LLC. The firm, often labeled a roll-up or consolidator, considers itself a partnership of 20 independent advisory firms that manage $40 billion in assets.

Mr. Gill has three suggestions when buying CRM software. First, don't overbuy.

“It is really easy to get seduced by all the filters and tabs and heat maps, etc., but ask yourself if you would actually use much [of what you see in a package],” Mr. Gill said.

Second, never underestimate implementation, which is everything where CRM is concerned.

“One of the most common mistakes of CRM is to overbuy and underimplement — so that you have an uncustomized version of a sophisticated system” Mr. Gill said.

Finally, whatever you buy must integrate with what you already have. This was a point I made last week.

Look at the core applications you are already wedded to, and determine how they will work with any CRM package you consider. Will it be seamless or painful?

Interestingly, among Focus' 20 firms, all of which manage about $500 million or more in assets, no single CRM package dominates. A handful use Junxure from CRM Software Inc. and another few use Salesforce.

Both user groups said that they are happy with their choices.

Part 1: Navigating the CRM Labryrinth


FPA-ActiFi Adviser Technology Reports: CRM Edition

Your Silver Bullet LLC

Virtual Solutions Consortium

Related stories:

Advice for users of CRM

FPA releases detailed study of CRM software

Tamarac takes a leap by offering a single solution

Redtail teams with Pyxis Mobile to provide mobile access to its CRM unveils CRM for indie advisers

Client relationship management 101

A single standard tops goals of Your Silver Bullet

E-mail Davis D. Janowski at


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