I've noticed a common root cause underlying complaints raised by many advisers: Old or fringe technology tools.
We all hear colleagues share frustrations about how long it takes to run their billing, identify exposure to a certain asset across their client base, re-balance and other recurring tasks. These tasks are often hard, but the processes needn't be. That's a difference: advisory work is hard, requiring analytical and interpersonal acumen, but how we execute this work can be made less difficult — less cumbersome, more repeatable and automated. I think the difficulty of a process often is the biggest cause of avoidable stress in our work.
Tasks can be automated if they are understood and made repeatable. Often, the best ideas about how to accomplish this comes from top technology firms that identify best practices from across the industry and incorporate them into their code. The result is a simpler way to accomplish a task.
I've noticed that the complaints I hear from colleagues aren't coming from advisers using what I consider best-of-breed technology solutions. These are the well-capitalized companies that have developed multiple generations of a robust product, host their tools in the cloud and have integrations with other top-tier technology tools. These technology tools automate hard tasks so we can spend more time doing the difficult work our clients value most.
When I talk with colleagues about their frustrations, I often find the technology supporting them is not from best-of-breed companies (at least, not best-of-breed anymore). They use
financial planning software that was written a decade ago,
portfolio management software that sits on their hard drive and requires an old version of Microsoft Windows, or an interesting web-hosted tool that stands alone and requires manual re-entry of data from other systems. They spend days reconciling and auditing portfolio information in order to rely on the information. Their quarterly billing takes weeks. They can't find files.
In defense of readers thinking "hey, that's me," developing a technology strategy, selecting suppliers and moving to new tools is difficult. But it is worthwhile. The return on investment can be multiples of the time and expense.
Some technology tools — niche players, if you will — might provide tremendous value, but their tool doesn't tick off all the boxes to be best-of-breed. That might be acceptable. My point is to know when a tool is more of a burden than an enhancement to the quality of the work you offer.
If you're spending a lot longer on your core processes than you think you should, start asking your peers about their experiences. You may find you can improve your processes and make life less difficult by moving to best-of-breed technology.
Dave O'Brien, is a NAPFA-registered financial adviser and owner of O'Brien Financial Planning Inc. in Richmond, Va.
