Is it time for a new CRM?

A cost-benefit analysis reveals important considerations in switching hub systems

Mar 21, 2014 @ 11:48 am

By Joyce Hanson

crm, customer relationship management, adviser, technology
+ Zoom

As essential as customer relationship management systems are to an adviser's practice, adopting a new CRM is a chore that most dread.

Whether they're getting started with their first CRM or switching from one system to a new one, advisers struggle to find time to do the research on all the CRMs available. Once they've settled on a product, they have to figure out a process for organizing their data and integrating it into their financial planning and other software. And then they worry about losing all the information they've already collected about their clients.

“For advisers I know, it's worse than going to the dentist without the Novocain,” said Jim Koch, founder and principal of registered investment adviser Koch Capital Management. “The big risk is loss of data.”

That loss can occur during the transfer from one software product to the next because each CRM maps data differently. While CRM providers are getting better at accomplishing seamless data transfers, it's still hard not to have a bad experience, according to Mr. Koch.

(Don't miss these 5 big tech trends coming your way.)

For example, he said, he helped his wife, an executive coach, move all of her contact information from the Microsoft Windows GoldMine CRM to an intermediate product that didn't work, and from there to Norada Corp.'s Solve360 CRM, which financial advisers also use.

During those moves, their inability to transfer all the data from one system to the next resulted in an odd work-around.

“In the conversion of 4,000 or 5,000 records, we couldn't migrate all the data, and to this day we still have the GoldMine data on an old computer just in case we need to find some old information,” Mr. Koch said. “To me, that is the biggest fear of advisers when switching.”

Still, adopting a new CRM can benefit advisers, especially as CRMs that integrate well with other software systems are becoming the mainstay of many advisory practices.

That has been the case for Shaun Dowling, partner and director of financial planning at Howard Financial Services, who reports that his firm has gone from using a CRM as “a glorified Rolodex” that did not talk to the firm's portfolio management and financial planning software to a completely integrated system that is the hub of Howard's business.

Howard Financial formed a technology committee that initiated an 18-month systems transition for the firm. The previous CRM, Junxure by CRM Software Inc., was replaced by a Salesforce.com Inc. CRM with an overlay called XLR8, made by Concenter Services.

“It wasn't that Junxure was bad. It was just that we weren't really using it fully,” Mr. Dowling said.

Now, with the technical support of Concenter, Howard Financial has integrated its new CRM with Orion Advisor Services' portfolio management software and eMoney Advisor's 360 Pro financial planning software.

“At the end of the day, we were looking for systems that would play nice with each other,” said Briton Chamberlain, Howard Financial's chief compliance officer and director of operations.

(See also: Tech firms integrating systems to improve adviser workflows.)

For advisers who are thinking about adopting a new CRM, David Mehlhorn, director of sales and training at Redtail Technology, recommends writing down all regular office procedures, checking to make sure all captured data is accurate and well-organized, and then deciding whether the current CRM can be put to better use before starting the search for a new provider.

“The first thing is ease of use,” Mr. Mehlhorn said during a webcast Wednesday hosted by marketing coach Kristin Harad. “We tell advisers to take it a piece at a time. Bite off what you can chew.”

Rather than learn all 150 features at once, advisers should start with calendars and task management before moving on to more advanced features such as workflow and marketing, he said.

“Most CRMs have similarities between features, and the more comfortable you get with navigation, the faster the flow,” Mr. Mehlhorn said.

Veteran advisers find the pain of disentangling their legacy systems to be a barrier to adopting a new CRM. But younger advisers with less data to deal with can take advantage of the fact that there are lower-cost CRM systems out there.

“I would argue that the switching costs for the CRM industry are quickly dropping as more vendors are becoming cloud-based and HTML5-compliant,” Mr. Koch said.

Sophia Bera, founder of Gen Y Planning, said she looked closely at cost and convenience when she selected LessAnnoyingCRM.com as her provider for her two-year-old practice.

A startup that's less than three years old, LessAnnoyingCRM.com costs $10 a month per user, compared with Junxure, for example, whose cloud-based version costs $75 a month per user.

“Some of these systems are doing a million things, but they're doing them less well,” Ms. Bera said.

0
Comments

What do you think?

View comments

Recommended for you

Sponsored financial news

Upcoming Event

Jun 27

Webcast

Emerging Market Debt: 5 Forces at Work

When it comes to emerging market debt, there are a series of forces that help you drive better results for your clients. In today's continually changing market environment, it is critical to know the forces at play to help keep your investment... Learn more

Accepted for 1 CE Credit from the CFP Board. Approved by IMCA for 1 CIMA®/CIMC®/CPWA® CE credit. Approved for 1 CFA Credit.

Featured video

INTV

AXA's Christine Nigro: How to handle being the only woman in the room

Women face unique challenges as they move into the C-suite, and they need to remember to always be themselves and let their professional strengths shine, according to Christine Nigro, vice chairman at AXA Advisors.

Video Spotlight

Will It Last As Long As Your Clients Do?

Sponsored by Prudential

Video Spotlight

The Catalyst

Sponsored by Pershing

Latest news & opinion

Brian Block's $4 million bonus was tied to a key metric at ARCP

Prosecution rests case in fraud trial against CFO of American Realty Capital Properties.

Edward Jones is winning the Google search war

Brokerage firm's digital marketing investment helps land it at the top of local and overall search engine results, report finds.

Voya's win in 401(k) fee suit involving Financial Engines bodes well for other record keepers

Fidelity, Aon Hewitt and Xerox HR Solutions are currently defending against similar fiduciary-breach claims.

Collective investment trusts getting more attention from 401(k) advisers

The funds are catching on due largely to lower costs and more product availability, but come with some inherent drawbacks.

Vanguard rides robo-advice wave to $65B in assets

Personal Advisor Services, four times the size of its closest competitor, combines digital and human touch.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print