How to get broker-dealers over the technology adoption hurdle

The four key elements in expanding technology use among broker-dealers and advisers

Jul 24, 2015 @ 10:53 am

By Robert Powell

In today's digitized world, new technologies are made available all the time and technology adoption among the general public is moving at a breakneck pace. Consumers scarf up the newest devices and download new apps as fast as technology providers can bring them to market.

But for businesses, which stand to benefit the most from using these great advancements, technology adoption often moves at a snail's pace. And for broker-dealers and advisers, this can mean real losses in dollars and cents as progress goes unrealized and new ways of serving clients go unused. Proven technology goes untapped because advisers aren't comfortable using it or haven't been consulted by people they answer to in deciding what technology to use.

This situation can't continue. Broker-dealers and advisers have to become accustomed to promptly adopting technology that is available to them. Failure to do so means losing clients and market share to those nimble enough to get ahead in the game. This problem can be solved, though; it's not too late.


It helps to look first at the different ways broker-dealers acquire technology, because that makes a significant difference in levels of adviser adoption.

In some cases, broker-dealers shell out for the technology that their registered representatives use. This is often done without the necessary consultation with those reps, and subsequently, the level of adoption is low. If these representatives have no input or skin in the game, then they're not going to be disposed to take the time to utilize the technology. It's a bit like buying your child the most expensive toy on the market for the holidays only to watch them play with the empty box.

In other instances, a broker-dealer will make all the technology decisions but require their reps to pay for it through fees. While this puts skin in the game, it doesn't mean input into decisions and that means lower adoption rates.

More independent broker-dealers, where the representatives are given free rein to use whatever technology they choose and are given some guidelines and goals by their dealers, have not proven to be more efficient in ramping up adoption because there's a lack of structure and guidelines. If there's not a consistent set of standards that users are driven to adopt, then there's a disconnect. If the technology does not meet a certain standard where it's relevant and linked in to the others in a given system, then that's a significant stumbling block to adoption.

And so this begs the question: What does work for boosting tech adoption among broker dealers? Here are four key elements in expanding technology use among broker-dealers and advisers.


Have a plan of attack when you set out to promote technology adoption. This will prevent you from wondering where to go next. Don't go into it thinking that the next steps will be obvious, because it's easy to get distracted or think that the effort is under control without following up.

Determine what it is exactly that you need from your technology. This is not just the needs of the home office, but also the needs of the adviser and end-investor. Determine how you plan to positively impact their practice and the efficiency of the home office. And understand that using the latest technology may not be in the best interest of some advisers, such as those winding down their practices or dealing with a very small clientele. That's OK.

Create an aggressive but realistic plan. Now that you've determined what you need to accomplish and which partners can best help you get there, construct a realistic plan for getting it out to your end-users.


Corporate communication and interaction are keys to promoting tech adoption. Corporate messaging is probably the simplest thing that a broker-dealer can correct, but it's the number-one thing that they all seem to mangle. A broker-dealer needs to have a clear vision that applies to its entire organization, and it needs to communicate that with every last person from day one. Spell out each and every benefit to reps and let them know it's dependent on accessing the right technology in the right way.

Users have to be sold on the benefits of the technology, even when that technology is free. Once you get that buy-in, either from the adviser or their office assistant, technology adoption becomes easier, because people are on the same page and understand the ultimate objectives.


Training is the second component that you need to take to heart if you are serious about spreading tech adoption among broker-dealers and advisers. Senior executives have to have a training timeline for either the broker-dealers, for the advisers in their office or for the staff under those advisers who are going to be doing the bulk of the real data-management work.

While there are always costs associated with training, it pays off in the long term. It's cheaper to train you than it is for me to sit on the phone with you for an hour to talk you through something. If you skimp on training now, then be prepared to pay more in tech support later, especially if you have a mandate without the training to go with it.


Following up training with accountability is vital to making technology adoption take hold. People can pass a training course with flying colors and then very easily revert back to their old way of doing things unless someone holds their feet to the fire. Holding people accountable to use the technology and making sure there's a peer-pressure element involved is the best way to get tech adoption ingrained in the minds of reps and end-users.

Just as it's good people management to create a community where people thrive and want to be the best among their coworkers, it's good management to create and grow a culture of technology adoption in an institution or firm.

And that's been the missing element. Accountability is basically non-existent today. Broker-dealers don't do any overall bench-marking to say, “Hey guys, here's where everybody stands as far as their technology adoption, and here's the correlation between that and their dollar production.” And they really need to do that. Firms need to show how and why technology adoption equals more dollars.

The need to harness technology to improve the performance of broker-dealers has never been more important. The industry needs to get serious and implement the necessary communications, training and accountability strategies to ensure the benefits of tech advancement don't pass them by.

Robert Powell is vice president of sales & marketing at Laser App.


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