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Technology that improves client service with fewer people

Adviser shares path to lower costs through integration

Nov 23, 2016 @ 12:01 am

By Scott Hanson

Wrestling with the three-headed monster of growth, cost containment and client service considerations is a never-ending challenge.

We're always trying to improve, but it's difficult to know how to find the gaps in the organization. Then the question becomes, how do you efficiently fill those gaps once you've identified them?

It's the end of 2016, so you'd be correct to assume that the answer, once again, is by utilizing technology.

We're growing and that's a good thing. But year after year, our costs take larger and larger bites out of our revenue. It's pretty simple: The more clients you have, the more expenses you incur.

That's the bargain we've made, and we've certainly never regretted it. But, as you grow, what if you could actually slow, or even cut expenses and still provide a level of service your valued clients demand? Perhaps you could do even better.

(More: Why high-performing advisers are aggressively adopting technology)

Might you be able to slash expenses while simultaneously (and drastically) improving the services you offer to your clients? Let me count the ways.

At Hanson McClain Advisors, we've always prided ourselves on being a technologically savvy company. By that I mean, be it our client relationship management software or our portfolio rebalancing systems, we never hesitated to make a change or upgrade if it safely streamlined a process or otherwise moved the needle in a profitable direction.

But all that time, what we actually sought wasn't the best individual provider for any particular system. We've come to understand that what we've always wanted was better holistic systems integration.

Now we have it.

After a sometimes arduous transition, we changed our client and portfolio software to Tamarac, and this technology has had an extremely positive impact on our entire operation. With it we cut costs, decreased manpower and improved client service.

To be fair, there are other great technology platforms available today, such as Orion.

The point is, the adoption of a holistic tool has given us five things.

First, it delivered near-total systems integration. Whether it's a simple appointment reminder, a billing statement or a complex portfolio rebalance, the system replaced three major un-integrated software packages while drastically decreasing the time it takes to fulfill requests and communicate with clients. And all the while it kept all relevant parties in the loop.

It also provided us with razor-fine data reporting, such as detailed reports for tracking employee productivity. (And, not surprisingly, this transparent accountability mechanism greatly increased that productivity.)

It also helped create more productive advisers. Naturally, advisers are the most highly-compensated team members we have. Our CRM's automated rebalancing eliminated a majority of advisers' trading responsibilities, which were expensive and time consuming. This had the ancillary benefit of freeing them up to meet with more clients rather than performing trade-related administrative functions.

(More: Advisory firms growing with tech but not without troubles and false starts)

Our system also improved client portfolio management. It automatically identifies accounts that stray outside their model risk tolerances. It also does things like identify accounts with excess cash or with cash needs. It checks “drift,” making rebalancing more systematic, which reduces risk and benefits the client. (The new CRM also can lower transaction costs for global rebalances.)

Finally, the technology has lowered in-house fees. Our CRM has reduced costs and it's lowered our dependence on outside vendors, as it has almost entirely eliminated our need to outsource client bill processing.

We have confronted the daunting challenges of implementing a technology over and over again during our 24 years in business, and once again, we learned a valuable lesson. Never let inertia or the unfamiliar stand in your way.

Our newly integrated technology touched all the bases by slashing overhead (we were able to reduce the size of our operations department), increasing productivity and streamlining many of our most complex processes.

It ultimately allowed us to more quickly and accurately manage nearly every aspect of both our existing and our future client relationships.

Scott Hanson is a financial adviser and co-founder of Hanson McClain Advisors.

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