How to grow an advisory business with technology

When looking to build their businesses with technology, advisers should keep in mind that it’s not all about the money.
Whether they’re buying new products and services or hoping to boost their bottom lines, advisers who focus obsessively on dollars and cents risk losing the benefits that technology can bring, tech experts said Tuesday during an InvestmentNews webinar, “Giving Your Firm an Edge with Technology.”
The most successful performers are not outspending their peers, according to InvestmentNews’ 2013 adviser technology study. Rather, they’re spending differently, with funds going toward more training and more cloud-hosted services that minimize costs.
Successful implementation leads to efficiencies that free up firms to grow, the study found. Fully 50% of top-performing firms in the study cited productivity gains as their primary consideration when deciding whether to invest in new technology versus 40% of all other firms. Meanwhile, only 16.3% of top performers said they invest in technology to benefit clients versus 24.5% of other firms.
Gregory Friedman, co-founder and president of Private Ocean Wealth Management and founder and president of customer relationship management software firm Junxure, said commitment to technology needs to start at the top.
“If your firm leader doesn’t champion technology, you’ll have a challenge implementing it,” Mr. Friedman said.
Brian Jack, director of information technology at wealth management firm Budros Ruhlin & Roe Inc., agreed and said getting the most out of technology can mean taking a different view of it.
“We said we were going to treat technology like a client,” Mr. Jack said. “Profitability is not the driver of why you adopt technology. You’re looking at productivity. We want to make staff more efficient.”
Firms also should set aside sufficient time to train employees if they want staff buy-in, Mr. Friedman said. Further, they should set goals for staff and assign specific employees as “champions” to assume ownership of a program. Private Ocean has different champions for major systems such as portfolio rebalancing and financial planning, he said, and that ownership gets tied into goal-setting and compensation.
At Budros Ruhlin, every implementation involves “lunch and learns,” webinars, employee-contributed tips of the week and games such as Jeopardy, Mr. Jack said.
At Private Ocean, Mr. Friedman said, he “rallies the troops” with a doughnut and bagel breakfast event when launching a new system to set the stage for what’s in it for every employee.
“I get an all-hands together and talk about what we’re doing, but I also spend a fair amount of time on why. What’s the goal? Why are we pursuing this and why should they care? It might be better client service or doing your jobs more effectively and efficiently. Ultimately, it will help profitability,” he said.
Both Mr. Friedman and Mr. Jack spoke of the advantages of study groups for advisers that can share information about tech products and services. But at the end of the day, they said, each firm must focus specifically on its own business and best practices.
“Nothing shortcuts the work it takes to get the demo and talk to the vendor,” Mr. Friedman said. “We have limited budgets. Making a bad purchase isn’t just the money but the time involved in training on a product that just doesn’t cut it.”