Practifi COO Emily Wilcox talks about improving advisor tech adoption

It doesn’t matter how much money wealth management firms invest in technology if financial advisors don’t use it.

Adoption is an issue that has plagued the industry for years, though there are encouraging signs of improvement. Schwab Advisor Services recently reported that 98% of registered investment advisors are using digital money movement tools and 80% are using digital client onboarding. And the 2023 Advisory Software Survey from T3 and Inside Information found adoption of client relationship management software is over 96%, while financial planning is more than 83%.

Beyond these types of technology, however, the numbers on adoption start to fall dramatically. Schwab’s data found that adoption of e-authorization tools is still lagging, while T3 found that software to help advisors with cybersecurity, digital marketing, estate planning and retirement distribution planning all rank near the bottom in terms of market penetration.

[More: T3 2023: Few firms adopting cybersecurity tools]

The problem is that firms aren’t committing enough time to train advisors and support staff on the technology after they invest in it, according to Emily Wilcox, chief operating officer of Practifi, a business management company that offers a customized version of the Salesforce CRM for financial advisors.

If they don’t learn how to use the technology, advisors won’t see the true value that tech provides them, and therefore will not fully embrace the tech in their day-to-day work, Wilcox said.

InvestmentNews spoke with Wilcox about how this challenge and how Practifi is helping firms to overcome it.

The following has been edited for length and clarity.

InvestmentNews: There are a lot of technologies out there for advisors, with new pieces launching all of the time. So how do advisors find the time to learn how to use everything that is available to them?

Emily Wilcox: It’s frankly one of the bigger challenges that we face today. There are so many technology options on the market, from all-in-one platforms to niche tools that focus on a specific problem, and what works for one firm is not always going to work for another one. There’s an [initial challenge of] choosing the right technology and determining what each individual firm actually needs to solve. That alone can be really challenging and hard to get right.

At the point where you have made those decisions and are looking at implementing technology, I would say most people underestimate the need for really slick change management processes internally. A huge part of that is training and education and sort of a really high focus on getting the systems and technology adopted. Technology can be magic, but it’s not magic on its own. It really requires your team and the firm to be using it and inputting the information in order to get the most out of it. It’s the classic ‘you get out what you put in’ adage.

IN: As long as we’ve been writing about advisor fintech, there’s always been a problem with adoption. Firms invest significant resources into new technology, and advisors still don’t use it.

EW: I think it will forever be a challenge. It’s a tale as old as time.

[Firms are] spending thousands, often millions, of dollars subscribing, implementing and building this technology, and it’s just not worth anything if people aren’t using it properly.

People get so used to what they know, any kind of change can be really hard. Training and education is only one part; you really need to get your team and your firm on the journey of understanding why the change is going to be valuable. Frankly, if you don’t sell the team on the value, you’re starting from behind.

IN: So overcoming that personal inertia?

EW: Totally. I’m guilty of it sometimes.

As humans, we’re naturally inert for the most part. It’s trying to engrain the culture of change and understanding into the team, which can be really tough, especially if your team has been doing something a certain way for a really long time. It’s not an easy thing to do as it requires quite a lot of dedicated thought and time.

IN: I imagine part of it is the result of success. Financial advisors who have grown their firm and brought in significant assets and have a good book of business wonder why they should adopt new technology. They’ve built this business, they have their clients, they’re making good money, so what’s the point of changing?

EW: The end-client expectations are changing about how advisors are engaging with them. Technology is really needed to keep up with that. That’s not the rule for all clients — every client is a unique, beautiful flower, of course — but for the most part, the upcoming generation are most interested in interacting through technology. It’s a little bit keeping up and making sure that you can continue that success.

Sometimes technology isn’t going to 100% revolutionize your firm on day one. It takes a little bit of time to sort of work through and let the dust settle to make it successful. There’s also a little bit of patience needed. That all comes down to the change management initiative you’re running across your team.

IN: What is PractifiU and what does it deliver to advisors?   

EW: PractifiU is a collection of courses and learning experiences that are curated very specifically to help them understand the value [of CRM], and understand what they’ve got and what they’re getting and what they’re looking at. For some firms, PractifiU would be enough training, but it’s often accompanied by physical training and walk-throughs and demoing within their specific [use cases] as well.

What we’re trying to do is take a little bit of the pressure off firms. Most RIAs don’t have dedicated technology people, they don’t have dedicated change management people, but CRMs can be very complex. They’re obviously a core system of record, so it’s a really huge part of an advisor’s or RIA’s tech stack. Having good adoption and good understanding of that is so crucial to the success of any kind of tech stack that you have internally.

IN: What sort of specific things are advisors are learning?

EW: There’s a little bit of inputting data, building reports and viewing dashboards. It’s about understanding how Practifi walks you through the client life cycle, from prospect or lead through to clients and growth and retention of that client. It walks you through the system, a little bit like a day in the life of an advisor. It tries to spell out really clearly how an advisor sits down in the morning and [the CRM] shows them their tasks that they want to do that day, how to look at them, how to filter them, how to prioritize them and all of those really important things. Sometimes it’s just the basic stuff, and if you understand the basic stuff, that’s where you get the most value.

But we also have a learning path that’s about the more administrative level. It helps them understand building custom reports and building custom dashboards and how to get the most out of the data that they have in the system, as well as how they can maybe make some changes to make Practifi their own, because every firm is just a little bit different.

Related Topics: Practifi, Schwab Advisor Services, T3