Technology dilemma for advisers: Better software, tougher choices

What were once considered extra features have now become as much of a must-have as the seat warmers on new cars.
JAN 20, 2014
When viewed individually, the software options available to advisers have never been better. What were once considered extra features have now become as much of a must-have as the seat warmers on new cars. As you walk down the vendor aisles at any conference, you soon realize that you have multiple choices for pretty much any solution you need. Oddly, choosing a solution for our advisory firm has become more difficult. I mean how many vaults do I really need for my business? Currently, I can offer my client a vault through our CRM, portfolio management system, and website. Am I really going to offer my clients three concurrent options to access a vault? Or do I wait for the “Lord of the Rings” version of one vault to rule them all to appear? I have a feeling vendors fear marginalization if they offer just one feature, and they also recognize the attractive up-sell potential of extra features. Hence, we have more options from vendors. I long for the days when I could select in a vacuum among individual best-of-breed solutions. What was once a decision about whether to purchase the best stand-alone CRM has now become an exercise of choosing the best hybrid CRM/document management/e-mail hosting/client vault product versus a CRM/e-mail hosting product and a separate stand-alone client vault and document management system. Every node increases my decision tree exponentially. The decision tree has become a mangrove of options in which I have to think about too many intertwined variables. These include upfront costs, replacement costs, quality of each individual component and other similarly themed variables. Except for my printer/scanner/copier/phone/foot massager, I have always shied away from platforms trying to be everything to advisors because I figured that is very difficult to pull off and that I didn't feel like doubling down on any vendor. Regardless of my personal biases, it seems there is an ever-expanding purview for these vendors that blur the lines of what they do. Vendors want to graduate from being vertical solutions to platforms. We see this in the CRM space and in the portfolio management space. We have yet to see this in the financial planning space but that is just a matter of time. As advisers, our best option is to figure out what type of firm we are and have the vendor which facilitates that as the anchor platform. Make the best use of extra features (e.g., client vault) and fill the remaining gaps from tightly focused solutions that minimize redundancies. For example, if yours is an investment-centric firm, then it makes sense to use your portfolio management system and its subsequent features (e.g., client vault) as your anchor. If you are process-centric, then use your CRM. If you are wealth management-centric, then use your financial planning platform. If you are none of the above, then use Outlook and Excel. Alex Murguía is a managing principal at McLean Asset Management and chief executive of inStream Solutions.

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