Smart technology buying starts with smart shopping

When shopping for new technology, the key point for advisers to remember is that they are not alone. If one taps the knowledge of custodians and broker-dealers — as well as Internet resources such as social-media sites and adviser forums — the task is unlikely to become an ordeal.
At the start of a technology purchase process, remember that very few advisers begin with a completely blank slate. The first stop, therefore, should be with those already providing core advisory services: broker-dealers and custodians.
Because most such firms invest heavily in advisory technology and have experience integrating their technology with that of third-party providers, they are familiar with the technology landscape.
“Our advisers know they should contact us before making any software or hardware purchases, because we have a pretty good knowledge base when it comes to assessing the compatibilities — or incompatibilities — that exist,” said Darren Tedesco, vice president of innovation and strategy with Commonwealth Financial Network.
Because his firm supports more than 1,200 representatives on its Client 360 platform, Mr. Tedesco’s technology team has had to work through quite a few technology combinations. As a resource to share technology knowledge, the team maintains its own internal wiki (like Wikipedia, but only Commonwealth techies can contribute to it).

CORE COMPETENCY

Here’s one bit of technology insight from the Tedesco team: When buying computers, buy quality but not necessarily the cutting-edge technology. For example, computers with an Intel Core i5 processor are probably a better bet than the latest Intel Core i7.
“When you take Moore’s law and processor speeds into account, your hardware is going to be at least two generations behind the bleeding edge in three years,” said Mr. Tedesco, referring to a theory put forth by Intel Corp. co-founder Gordon Moore that computing power doubles roughly every two years.
Another point about hardware is to stick to name brands with solid reputations.
In the document management area, for example, advisers and several broker-dealers have mentioned how satisfied they are with the ScanSnap line from Fujitsu Computer Products of America Inc.
To learn what other advisers and users are saying about a variety of hardware and software choices, there are many alternatives.
The Financial Planning Association’s recent Business Solutions 2010 conference in Dallas was an excellent venue for sharing ideas and conducting pre-purchase technology homework. But you can replicate at least part of the conference experience by carrying out research on the Internet.
In particular, social-networking sites and third-party-user groups now provide advisers with the opportunity to seek advice from peers about specific technology products and whether they might be a good fit.
Three good examples of such groups are a dbCAMS user group on Yahoo.com, fintech .ning.com and various spots on LinkedIn.com.
Sites such as these are great places to begin researching products and services, either by sending out initial queries on a class or category of technology product or application, or inquiring as to the specifics of using one in particular.
On the dbCAMS Yahoo Forum, for example, advisers can gather insights on that particular portfolio management system and also discuss a variety of topics with a group of technologically savvy peers.
There are plenty of such forums elsewhere on the web. Advisers might want to run searches on Google’s groups site (groups.google.com) looking for various specific applications they are using or want to use.
In addition to Google and Yahoo groups, advisers should research specialized social-networking and social-media sites.
One such site — fintech.ning.com — was created by adviser Russ Thornton, president of Thornton Wealth Management LLC. The site has 302 members and features many lively technology-related discussions. Participation requires free registration and acceptance into the group.
Similarly, advisers who have joined LinkedIn can search the Groups or Answers sections on that site using keywords related to technology products to turn up helpful advice or contacts. Of the FPA’s 25,000 members, 2,381 are connected to the organization’s group on LinkedIn.
YourSilverBullet.net is another website that independent advisers should consult prior to investing in their next application. The site is the product of a dues-paying consortium of technology companies that exists largely to facilitate and market integrations among member companies. As such, it is the closest thing to an intraindustry standards body for third-party advisory technology providers.
When they visit the simple and very straightforward YourSilverBullet site, advisers can click on the Member Companies tab, which opens a page filled with product and company listings. Alongside each listing is an integrations button that leads to a listing of the applications that work with that specific product. For example, by clicking on the link for MoneyGuidePro, an adviser learns that the popular financial planning software is integrated with 10 other applications in three categories, including CRM systems, portfolio management and performance-reporting products. A separate tab has a bare-bones list of 18 additional non-member integrations.
There is also a good new resource on the web for advisers who want to outsource technology. A group of outsourcing consultants and service providers have banded together, pooled their resources and created the Virtual Solutions Consortium (virtualsolutionsconsortium.com).
On this free site, advisers will find listings of both “virtual staff” and “service providers,” which have been screened by consortium members. The virtual staff list includes outsourced receptionists, office assistants, compliance officers and chief operating officers. Providers include suppliers of outsourced document management software, hosted client portals and e-mail-archiving tools.
Adviser Carl Richards, owner of Prasada Capital Management in Salt Lake City and a blogger for The New York Times’ Bucks blog, said he has become a huge fan of outsourcing because it opens up time to work with clients and write.
“The only thing holding you back from outsourcing is your own preconceived notions,” said Mr. Richards, who uses an outsourced bookkeeper, compliance officer and an Ohio-based administrative assistant.
“At first, I had my assistant work behind the scenes without anyone being aware of her involvement. But eventually, I decided it would be OK to let her make calls and perform other assistant chores that would reveal her true location. No one has batted an eye,” he said.

KICK THE TIRES

One last lesson: Regardless of the technology choice an adviser ultimately makes, it is always best to kick the tires before signing a contract.
Laurie Gripshover, a coach and consultant to financial advisers, said that the most important lesson she has learned over the years is not to make a decision based on a canned demo.
“You are perfectly within your rights to ask to see a live demonstration of a product, with live data — even if it means signing some sort of waiver,” she said.
In other words, don’t buy it unless you try it.

E-mail Davis D. Janowski at [email protected].