The tech survey says ...

Advisers are embracing industry-specific software, but satisfaction levels remain a bit low

Jul 7, 2013 @ 12:01 am

By Davis Janowski

Financial advisers are using more technology than ever. Although they remain quite happy with software products and vendors, satisfaction levels show definite room for improvement.

According to InvestmentNews' third annual survey of tech usage and satisfaction, completed by more than 1,300 advisers last month, the planning industry is witnessing increased usage of technology in several categories.

SEE THE FULL SURVEY RESULTS

MOBILE APPS

The four most popular mobile applications proved to be those from the four major custodians (custodians represented the top three last year).

Interestingly, the Schwab Advisor Center mobile app introduced since last year's survey has already taken over the top spot — and is being used by 19.2% of respondents who use mobile apps. It is followed closely by the Pershing NetX360 app, which is in use by 18.6% of the universe, Fidelity Wealth Central, 14.5%, and TD Ameritrade Veo Mobile, 9.6%.

But the industry remains in its opening stages when it comes to widespread adoption of mobile apps. Among survey respondents, 41.3% say they are not using any mobile apps.

“The vendors and technology providers seem to be ahead of the demand. Advisers are starting to gain more interest in [mobile apps], but it is not an absolutely vital must-have just yet,” said Alex Camargo, a wealth management analyst with research and consulting firm Celent.

“Providers are developing a first-generation [application] as a defensive posture and don't want to lose any of their advisers because of a lack of technology,” he said.

CRM

As far as customer relationship management software goes, last year's top three most popular products remained the same this year: Redtail Technology (39.5% of those who use a CRM system), Junxure (19.2%) and Salesforce CRM (9.8%).

Microsoft Dynamics moved up into the No. 4 position with 4.5%. Grendel Online rounded out the top 5, with 3.7% of respondents claiming it as their system.

One positive sign for the industry in terms of building efficiency with software and keeping good track of clients was this year's 2-percentage-point reduction in the number of respondents reporting no use of a CRM product. That percentage now stands at 13.5%, compared with last year's results, in which 15.5% reported using no CRM.

Two other areas are getting more interest as well, at least from a macro, cross-industry perspective: account aggregation and portfolio re-balancing. There were no big new winners among vendors, but advisers are using both technologies more — across the board.

ACCOUNT AGGREGATION

Most impressive is the uptick in the number of advisers who reported using account aggregation. This technology, involving Internet-enabled data feeds, provides advisers with daily account balances and transaction data on a client's assets not managed directly by the adviser.

Account aggregation allows the adviser a more holistic look at a client's holdings and thereby allows more-complete planning discussions with the client.

In last year's survey, 62.2% of advisers reported using no account aggregation at all. This year, that level shrank by 18.1 percentage points to just 44.1% of advisers not using it.

PORTFOLIO RE-BALANCING

Similarly, but in less dramatic fashion, more advisers reported using portfolio re-balancing technology this year. This appears to be a trend.

In the 2011 survey, 70.7% of advisers reported using no re-balancing technology, and in last year's survey, that dropped to 62.8%. This year, the percentage of advisers not using re-balancing software came in at just over half (55%).

Although those using either a proprietary system from their broker-dealer or a customized solution of their own creation dominated the top two positions — as they did last year — one vendor entered the top five that wasn't present among them in last year's survey results.

That vendor was Total Rebalance Expert, an independent third-party offering that captured the No. 5 slot this year with 6.6% of the respondents who use re-balancing technology selecting it.

Tamarac's Advisor Rebalancing product (from Envestnet|Tamarac) again occupied the No. 3 position.

Adviser satisfaction with technology in all categories appeared little changed from last year. Generally, between 40% and 50% of the respondents indicated that they are satisfied with their tech products.

ROOM FOR IMPROVEMENT

In most instances, fewer than 20% reported being very satisfied, indicating that there is indeed room for impressing advisers.

By the same token, though, few advisers reported being dissatisfied or very dissatisfied with their vendors or providers. Generally, less than 10% are dissatisfied with their software, and 5% or fewer are very dissatisfied.

One exception to middling satisfaction appears to be in the financial planning category, where most advisers appear to be quite happy with their products.

In this year's survey, 48% of advisers reported being satisfied and 37.5% are very satisfied with their financial planning products. That correlates very closely with last year's results.

Just 11.5% of advisers are indifferent toward their planning software, and a mere 2.5% are dissatisfied.

Janowski: The apps being tapped

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