Is it time for a new CRM?

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.
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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.
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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.