Change for technology's sake and cash in the dividends

The road can be difficult and rocky, but that's no reason to avoid leveraging technology to help your firm grow

Aug 4, 2014 @ 1:50 pm

By Sheryl Rowling

We all wish for technology that will do exactly what we want, in the way we do it now — and will be implemented effortlessly. If this wish could come true, would it be what we truly want? Maybe we need to change in order to benefit from what technology has to offer.

As an adviser, I was used to carrying out my various tasks using yellow pads, Excel and Word. It all worked. And I was well aware of the adage, "Don't fix what's not broken."

At that time, we rebalanced by hand, tracked clients using a simple database program and prepared financial plans utilizing a combination of self-created Excel spreadsheets and Word documents.

(Don't miss: Plugging into technology was key to building assets)

There was a lot of talk about financial planning programs. I didn't believe any could work as well as our in-house method. Sure, it was time-consuming and difficult to update our huge, multi-page spreadsheet for annual tax law changes, but our program did what we wanted. It could handle state taxes, calculations for unmarried couples and any other type of customization called for by a particular situation. We had a variety of explanatory paragraphs and general recommendation verbiage that we could mix and match within a boilerplate Word document.

The Naviplans and MoneyGuidePros of the world kept pushing at us — at conferences, in emails and within the pages of professional publications. We were certain that our homemade approach was superior to any automated solution.

But what if ... the calculations would be error-proof, the graphics would better communicate the recommendations, the integration could save us time and the appearance would generate a more professional look? Was it possible that the advantages could outweigh the disadvantages?

Financial planning software could perform Monte Carlo simulations, compare and contrast multiple "what if" scenarios and create colorful supporting charts. When the tax code went through another substantial change, I decided to take the leap. We purchased financial planning software.

Needless to say, the implementation process was not instantaneous. There was a significant learning curve to inputting data, interpreting results and producing reports acceptable to us and our clients.

Not only did we have to change how we approached data collection and input, we had to switch from a purely cash flow-based calculation to a goals-based analysis. In other words, we had to accept not only a change in methodology, we had to embrace a whole new focus to our financial plans. And guess what? It turned out to be superior to what we had been doing, as well as faster and more accurate.

Had we decided to dig in our heels, we would not be giving our clients higher quality financial plans, and each plan would take 40 hours of preparation.

What opportunities for progress are you missing because you don't want to change? Are you avoiding rebalancing software because you don't want to standardize models? Do you pass on aggregation tools because you don't want to get involved with multiple 401(k) plans? Are you hesitant to implement a CRM because you will need to enter information to begin?

The changes technology forces you to make can often propel your firm to greater success. You just need to be willing.

Sheryl Rowling is chief executive of Total Rebalance Expert and principal at Rowling & Associates. She considers herself a non-techie user of technology.


What tips do you have for getting over inertia?

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