In the last month or two, I have received a number of new reports that focus on operations and technology in the financial adviser space.  These reports do a fair job of identifying some of the trends of technology used in a wide variety of firms and some of the reasons why advisers have been slow to roll out new technology.

The first report is the 2008 FPA Practitioner Technology Report - Leveraging Technology Solutions.  This report uses results from an online survey taken by 291 random FPA members in February 2008.  Respondents consisted of the following categories:

• Independent RIAs (35 percent)
• Independents affiliated with a broker-dealer and IAR-dually registered (21 percent)
• Independents affiliated with a broker-dealer (20 percent).

The majority of participants (72 percent) reported revenue of $1 million or less.

2008 FPA Practitioner Technology Report Takeaways

• Nearly half of firms spend between 0 and 5 percent of revenue on technology.
• Near-term technology purchases cited include hardware, FP software, CRM, and document management.
• The most cited challenge with technology is utilizing the capabilities of existing technology.
• The markets of financial planning and CRM software are highly segmented, with the non-traditional “Other” type of software cited by 23% and 20% of respondents, respectively.  These percentages exceed the adoption of formal software offerings including MoneyGuidePro, Naviplan, and Junxure.

My Take: Most know by now that advisers spend little if anything on technology.  Nevertheless, advisers acknowledge the importance of organized systems and efficient use of technology to run a streamlined and profitable business.  In my opinion, the largest struggle advisers face is trying to identify the “best” tool for CRM and document management.  There are so many choices out there with so many different features that it’s easy to be overcome with paralysis by analysis.

It should be no surprise that nearly one-quarter of firms that responded have invented their own “other” types of software or tools to help with financial planning and CRM.

The full report is available to FPA members by logging in to the FPA website here: http://www.fpanet.org/Learn/ResearchCenter/ForPlanners

Advisors Trusted Advisor Operations & Technology Survey Takeaways

The second research report comes from a Advisors Trusted Advisor titled Document Management, CRM and Portfolio Management the most challenging systems areas for wealth managers.  Again the findings of the report should come as no surprise for most industry observers.  Below are the salient takeaways:

• The most frequent answer to document management systems, services, or tools used was “None.”
• Lack of integration, complex user interfaces, and underutilization of in-depth features were cited as the biggest frustrations with current CRM systems.
• Advisers want streamlined trading, efficient rebalancing, and flexible/customizable reports from portfolio management software.
• In general, over three-fourths of respondents are satisfied with the operational support provided by their custodians.

My Take: Again, in this report, “None” is the most dominant document management solution cited by advisers.  Document management is still a fairly new characteristic of advisory firms and arguably it takes considerable investment of time and money to configure properly.  One of the largest hurdles is figuring out how to sort, organize, and automate the filing of all the electronic documents.

In general, most advisers use the resources and materials provided by custodians to manage trading, simple reports, and operational issues.  We have service teams who we can contact when we need support on these items, and I, too, am generally satisfied with the support I receive.

The ATA report can be viewed by entering your contact information at the following site: http://www.advisorstrustedadvisor.com/industry.html

Information and Social Media Takeaways

For fun I’ll throw in one more report from the FPA that discusses Information and Social Media.  Big points are:

• Advisers want technical information to assist clients with retirement planning, and most use online material and Excel workbooks to gain related information.
• Marketing is the #1 practice management topic of interest with most information obtained online through the Internet.
• While nearly 25% of participants use LinkedIn’s social media aspects, over half of the participants use no form of social media.
• New advisers with 2 years or fewer of industry experience were the most likely to cite social media outlets as providing business benefits.

My Take: Those advisers in the over 50% category that don’t use social media ought to branch out.  I understand that those who work under the umbrella of a Broker/Dealer really aren’t permitted to use social media sites to promote their business.  It’s a big no-no according to most B/D compliance departments.

Still, the rest that are independent should consider participating in some of the basics.  Set up a LinkedIn profile, answer questions on LinkedIn or Yahoo! Answers, and tweet on Twitter.  Look at the new entrants to the industry; they are reporting positive business benefits from these outlets.  Advisers that don’t use social media risk being leapfrogged by those that adopt and embrace these new tools.

The Information and Social Media results can be viewed at the following link:

https://www.fparesearch.com/Admin/mediaserver/3/documents/Report%20for%20Panel%20-%20Survey%20NonParticipants.pdf

Enjoy the reports!

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This entry was posted on Friday, August 22nd, 2008 at 10:58 am and is filed under Technology. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.