Advisory firms growing with tech, but not without troubles and false starts

Financial advice firms are using technology more than ever to improve their profitability and grow. But in practice, tech doesn’t always deliver exactly as planned, advisers said.
Client portals, where advisers share financial reports and use planning tools with clients, help advisers show they have a holistic understanding of clients’ lives — and facilitates improved relationships — said two advisers at the Fidelity Inside Track conference in New York on Tuesday.
“We introduce new clients immediately to the portal because it helps you flex your muscle from a tech perspective,” said Michael Delgass, chief executive of Sontag Advisory.
The portal also is a good way to safely collaborate with other professionals that clients work with, and that is something that has endeared many clients to Sontag, he said.
Tech-savvy advisers also are using their client relationship management systems to monitor and track productivity, are reaching out electronically to clients and prospects, and are automating workflows to enhance operational efficiencies.
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These “eAdvisors,” as Fidelity labels them, have nearly 40% more assets under management than other advisers, and they serve 55% more clients, according to a Fidelity Clearing and Custody adviser survey released last year. About three-quarters of them believe technology has been key to their growth.
Benefitting from technology, however, doesn’t mean advisers should implement a new system just because they saw another firm having success with it, said Tricia Haskins, vice president for practice management and consulting at Fidelity Investments.
“Identify business purposes that can be improved by technology,” she told advisers at the conference.
Having and using a CRM system is crucial for advisory business success, but getting firms to use them can be tricky.
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Wealthstream Advisors uses its CRM to track how long it takes prospects to become clients, and to gauge how effectively advisers and others at the firm are working. For instance, it might review everyone’s overdue “to do” reports, said Michael Goodman, founder and president of the firm.
Wealthstream engrains in all employees the fact that using the CRM to log client communications and other information is not optional.
“It has to become the culture. We say it didn’t happen if it’s not in Junxure,” Mr. Goodman said, referring to the CRM system his firm uses.
Sontag Advisory needed to change to an entirely new CRM system “because people just said they wouldn’t use the old one,” Mr. Delgass said.
There wasn’t something specifically wrong with it, but the firm switched vendors and has established procedures that prevent advisers from opening accounts or getting paid for new clients if they have not used the CRM.
Other advisers use subtle incentives like regular congratulations for those with a great new client or having a screen in the break room that makes such shout outs, Ms. Haskins said.
Recognizing when a technology isn’t working and cutting it loose is important.
For instance, at Sontag Advisory, the firm eventually gave up on using a video conferencing tool with clients and went back to hosting phone calls after it found some clients didn’t like the video aspect, and some had trouble using the technology.
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Picking the right technology also can be problematic.
Firms need to give tech vendors a thorough examination before a new purchase, the advisers said.
“Get references from those who are doing work day-to-day with the product,” Mr. Goodman said.
He also offered another tip: Once a firm has tentatively chosen a tool, go to that firm’s competitors and ask to talk to references they have from advisers who moved away from the product the adviser is planning to move to.