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How to choose your next tech tool

Technology is pretty inexpensive but as Dave O'Brien reminds advisers, acquisition is only one step toward tech success.

Dec 6, 2013 @ 8:57 am

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A recent FPA survey of advisers asked a number of technology questions, but the one that may have been the most stunning was, "What is the biggest challenge when it comes to acquiring new technology for your practice?"

According to the survey, 78.1% of respondents said, "knowing which technology to buy," and only 21.9% said, "cost."

Generally, technology is pretty inexpensive, and really is a bargain when you think about the productivity payoff it can provide. A new iMac or MacBook Air has exponentially more power and speed than a PC had ten years ago, and many cloud-hosted applications can expand an advisers' capabilities and capacity for under the cost of a new computer each year. Compare those acquisition costs to the price of an assistant to perform some of the same duties and the ROI is compelling.

Of course, the acquisition cost is only one component, as setup, configuration, training and integration are investments of time that are critical to the success of a new technology.

Respondents to the survey said their biggest challenge was knowing what to buy. If this sounds like you, then these steps may help.

• Do you have a strategy for your firm? Let's assume you have, because without one, it's tough to know what processes to improve first.

• Do you have a basic flow chart of your processes? How does information flow and where is it stored?

• Do you know where information is and should be stored? Are there many homes for the same piece of information, such as client e-mail addresses?

• Do you and your staff have common complaints about finding, updating or sharing certain information? How much is only in hard copy files?

• Do you worry that a key business function rests on one person's shoulders? Are there some processes that only one person knows how to do and are documented only in his or her head?

You get the picture — identify your pain points. These are signs that either your process or technology could be improved. You'll have some low hanging fruit that makes clear what you should do. For instance, it's time to replace that 4800-baud modem with a high-speed fiber optic connection to the Internet. Easy to implement, high impact on productivity. These can be your next technology investments. More than likely, some items will have a big impact but either are difficult to automate or convert to a new technology tool — portfolio management, for example.

It may make sense to begin with those high-impact and easy-to-implement projects so you can clear the decks to plan for the more complex projects. If you're at that stage now, then you may find it helpful to get advice from colleagues, technology vendors or consultants. Questions to ask them may be the subject of a future article in this section.

Dave O'Brien is a NAPFA-registered financial adviser in Richmond, Va., and owner of O'Brien Financial Planning, Inc., a fee-only registered investment adviser.


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