Michael Kitces #FinTech

Advice for users of CRM

Oct 12, 2010 @ 3:25 pm

By Davis D. Janowski

Technology experts from Fidelity Investments shared insights with advisers attending the FPA national conference in Denver on Tuesday that could foster greater adoption of their customer relationship management systems.

In a session titled “Achieving Success with CRM,” Edward O'Brien, senior vice president and head of technology with Fidelity Institutional Wealth Services and George Baumgarten, vice president of product management at IWS presented observations their teams had made over the last two years regarding best practices for advisers implementing the technology.

Speaking to an audience of advisers with a mix of custodial relationships they tried to keep their discussions agnostic from a vendor perspective (The WealthCentral platform offers a highly customized Siebel CRM system from Oracle developed for advisers).

They presented their findings in the form of mini-case studies of registered investment advisory firms that Fidelity's field teams had worked with. These firms ranged in total assets under management from $150 million to $500 million and staff sizes from seven to 20.

Firms had implemented CRM systems for various reasons. The first firm discussed had done so as a means of streamlining their client on-boarding process.

That process included sending a welcome letter, performing a financial assessment, scheduling a client orientation, establishing an investment strategy, opening of client accounts, monitoring account transfers, and initiating investment processes (buying and selling of securities).

Unfortunately, the entire responsibility of following through on each of these processes fell to an administrative assistant and the approach ultimately bogged down. To remedy the situation the firm's principals decided to delegate specific parts of this workflow to subject-matter experts within the firm and make them responsible for tracking and recording these in the CRM system.

“We found that it really makes sense to assess early on what you want [to gain from the CRM system] rather than just throwing the CRM system at the problems,” said Mr. Baumgarten, adding that the most successful firms tended to tackle one big process at a time rather than taking an initial holistic approach of tackling all of them.

In another case study, a firm found that their system had evolved quite efficiently for managing client relations and communications but lacked the workflows necessary for managing and tracking prospective clients.

The Fidelity team found that the most successful implementations of CRM were among firms that actively involved all their users. Another observation was that there was greater adoption when firms formalized a feedback mechanism that helped drive improvements as well as when firms shared and discussed shortcomings and possible improvements in meetings.

The rationale being that when employees felt their input was being listened to and taken seriously those users were in turn more likely to use a CRM application's features to a greater depth and more consistently.

Among the team's other findings were that firm adoption of CRM progressed more rapidly if subsets of users were trained as experts and could then share their knowledge with others and act as recognized resources. It was also important that firms take advantage of additional or ongoing training from their CRM vendor.

The experts also had gleaned advice for firms that were were just in the process of making a vendor selection when it comes to CRM.

Among these: Integration with other advisory applications is important and firm-specific, advisers should evaluate offerings prior to buying them and should seek references in the form of other firms, preferably firms as similar to their own as possible, firms should look beyond the user interface and evaluate how well organized and intuitive the application is, firms should consider CRM packages that are offered in the form of software as a service, and firms should examine a CRM provider's commitment to research and development.

Making sense of integration means reaching an understanding as to where a CRM system will find itself within a firm's greater infrastructure. In other words will the CRM system be the core or central hub around which the firm's other applications and processes revolve or will it be fed by other applications?

Advisers present at the session also had questions and suggestions.

One of the more interesting came from Michael Lincoln, president of Lincoln Financial Services Inc. in nearby Arvada, Colorado and related to what advisers should consider when contemplating a change from one CRM system to another.

“Take seriously your selection of CRM software up front --- to later transfer all those thousands of hours of data you've put into it is not something you can take lightly,” he said.

Despite being interested is some of the features and integrations available with newer systems, after 20 years of using Advisor's Assistant Mr. Lincoln said he could not conceive of migrating to another application both because of the amount of data in the system as well as how customized it had become for his own practice.

Tune in tomorrow for a story on Neesha Hathi's presentation of findings from a Schwab Advisor Services survey on technology.

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