CRM software is old-school but still a trouble spot for many advisers

Customer relationship management software is not considered cutting-edge by many financial advisers, but it remains a stumbling block that leads to trouble with work flows.
For a lot of independent advisers, especially those running smaller firms, just the notion of technology can seem so overwhelming that they can end up ignoring the issue, according to Joel Bruckenstein, president of Technology Tools for Today.
Speaking as part of panel discussion at the MarketCounsel Summit in Miami on Wednesday, Mr. Bruckenstein pointed out that more than 22% of financial advisers are not currently using basic CRM tools to interact with clients and manage and analyze data.
“We know that about 20% of advisers are not using CRM, and another 20% think they are but are actually using something else,” he said. “And we hear that advisers are having trouble with things like work flow, which is not surprising.”
STUMBLING BLOCK
Even though CRM might be not be considered cutting-edge technology to the truly tech savvy advisory firms, it is still among the stumbling block issues for a lot of advisers and something the technology industry should be addressing, according to John Rourke, chief executive of Starburst Labs.
“I believe in paying for CRM, but I don’t believe you should have to pay for training for using CRM,” he said. “There 25 different adviser CRM vendors, and it’s time for vendors like us, and our brethren, to do a better job for advisers, and not just blame advisers.”
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Mr. Rourke added that part of innovation needs to factor in the usability of the products.
“We keep telling the advisers that they’re not savvy, but it’s up to the vendors to design and deliver better products that don’t have legacy problems that inhibit user interaction,” he said. “I think our industry makes too much money off the friction with CRM.”
Victor Fetter, chief information officer at LPL Financial, described CRM as among the fastest growth areas with financial advisers.
“You have to take the time to understand that you need CRM,” he said. “We do have to have higher expectations of the providers that are out there, but you can’t expect you’re going to get everything you want and need for $19.95 a month.”
While the relatively old-school topic of CRM was bandied about, the panel also looked to the future, with some particular emphasis on the sticky issue of data ownership.
DATA OWNERSHIP
“The top three things for 2016 will be data ownership, data ownership and data ownership,” said Lowell Putnam, chief executive of Quovo.
“Who owns the data is this incredible question that there is no answer to coming from Washington,” he added. “I think we can agree that we own the data in our bank account, but does an adviser own all the data they have coming through LPL, and if they leave LPL can they take that data with them?”
To that, Mr. Fetter of LPL, responded that advisers are free to take the data.
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“But what are you going to do with it once you have it?” he asked. “How will that data drive your business decisions?”
Beyond the logistical challenges, of which there are admittedly many, the panel of experts appeared to agree that the direction of the financial advice industry is getting increasingly digital.
“Everything is changing,” Mr. Putnam said. “The industry is facing new regulations, new technology and a transition from passive to active management, and it’s all happening at the same time, which is what’s unusual. To adapt, a firm has to re-architecture itself, and that requires new technology.”