The Financial Planning Association is expected today to unveil a major research study on customer relationship management. ActiFi Inc., a financial services technology consulting firm, partnered with FPA in completing the 85 page comparative analysis of CRM packages available to the advisory market.
That study, titled “FPA-Actifi Adviser Technology Reports: CRM Edition,” is being published by FPA Press.
“We conducted this CRM study to give advisers an easy-to-use guide to help them make smart software decisions to improve their work flow, increase profits and advance their business,” said Marv Tuttle, executive director and chief executive of the Financial Planning Association in a prepared statement.
Current FPA members will receive a free copy of the report. Market research and evaluation data, as well as the report, is available to FPA institutional members for $5,000. Non-member firms can purchase it for $7,500 through the FPA Research Center.
TD Ameritrade Institutional sponsored the study but only participated in the research as one of four major custodian respondents, according to ActiFi chief executive Spenser Segal.
A total of 16 CRM software packages were reviewed in the research report, which is composed of data gathered from FPA members, customers of CRM vendors, the vendors themselves and testing of each CRM application.
Data collection was carried out between July and September of 2009. A total of 355 advisers were interviewed, 303 of them being users of a CRM package. Adviser participants were selected in a random sampling of the FPA's 25,000 members.
InvestmentNews received a copy of the report in advance of the announcement.
Advisers should be able to use the research as a guide when contemplating a purchase of a CRM package. But combing through the reams of information does take time.
“We're not aware of anything more in-depth having been conducted before,” FPA Research Center manager Rebecca King said.
While Ms. King could not quote an exact figure, she estimated that at least $100,000 had been spent on the project. Actifi's Mr. Segal calculated that between 3,000 and 4,000 man hours had gone into preparing the report.
Among the study's innovations is the FPA-Actifi Compass — a type of chart that provides an at-a-glance overview of a product's ratings. Ratings are based on ten functional and eight general categories.
“There's so much data that we needed a way to help advisers more easily digest what's relevant and what is not to their own business model visually,” he said.
The study's rating system is based on a proprietary and complex FPA-ActiFi scoring methodology. It employs a four-point scale with zero representing “limited capability” to four which equates to “best in class.”
Overall, most of the 16 vendors did fairly well in the area of general contact management, but few excelled in the category of “360 degree client management.”
When asked about the lack of hard-edged commentary in the report — there is little in the way of outright criticism — Mr. Segal referred back to the methodology and weighted rating scale as speaking for itself.
“People can argue with our methodology," Mr. Segal said. "But they can't argue with our consistency, objectiveness and how, given the same data, anyone can replicate our results--- it is clear and unbiased.”
There are also no overall ratings given to the products in the report, unlike reviews of products found in such publications as Consumer Reports or PC Magazine.
Both Mr. Segal and Ms. King said that providing an overall score had been considered but was ultimately scrapped. It was decided that this would provide advisers with little value and distract them from studying the depth of the findings.
“Advisers have so many different business models, so for example, for us to include e-mail capabilities as part of an overall score for advisers that might not need it made little sense to us,” Ms. King said.
“What we really were focused on was making sure the functionality scores as comparative as possible,” she concluded.
On the drawing boards at Actifi is an online evaluation tool for advisers that will make use of the data collected in the current study. While still in the planning stages, it will likely be in the form of an online questionnaire filled out by an adviser based on their predicted business needs. Mr. Segal said he estimates that it will require another year of development.
“We'll be able to rank the products for the adviser based on their inputs,'here's the top best choices for your firm.'in rank order. We're still in the planning design stages of that,” he said.
In the meantime, the FPA and Actifi Financial plan to release six more technology research reports over the next two years. Financial planning software will be the subject of the next project. That report is due out in June.