December 09, 2010
CRM and Integrated Technology Can Produce Significant Dividends for Financial Advisors
Financial advisory firms, including large Wirehouse Brokerages, Independent Broker/Dealers, and Registered Investment Advisor firms (RIAs), are always clamoring for cutting-edge technology solutions that can help their advisors build more efficient and profitable practices. Investing in and offering sophisticated technology platforms can often help firms successfully recruit and retain top-tier reps and top-producing teams as well. The typical financial advisor workstation consists of a combination of the following software platforms: 1) a portfolio accounting and consolidated performance reporting system to track investment holdings, market values, transactions, and cost-basis, 2) a trade order management system for trade order entry, settlement, and rebalancing, 3) a financial planning engine to help with retirement planning via portfolio growth projections and hypothetical Monte Carlo simulations, 4) a client relationship management (CRM) system to track and manage client data, prospecting activity, and sales pipelines, 5) a compliance module to satisfy Know Your Customer (KYC), Anti-Money Laundering (AML), investor suitability, and trade fraud detection requirements, 6) an investment research tool for portfolio analytics, screening, and backtesting to aid in portfolio construction and risk management, and 7) a document storage solution to image, archive, and manage client documents. Merely offering some or all of the aforementioned platforms is not enough, though. Unfortunately, many of the currently available specialized software solutions designed for the advisor workstation only run as standalone applications and do not harmoniously work in sync. Since these legacy systems cannot exchange real-time data, advisors and their support teams must switch back and forth between platforms to manually input data twice, thereby wasting valuable time and opening themselves up to potential error. To truly gain an edge over the competition and to make their producers more efficient, financial advisory firms must eliminate disparate solutions and instead offer a tightly integrated technology environment.
An integrated advisor workstation provides many benefits to financial advisors. First, integration eliminates cumbersome, time-consuming re-keying of duplicate data between multiple systems, thus significantly reducing the risk of inaccurate data entries. With an integrated suite of solutions, data entered in one system will then automatically populate the others. Due to the newfound convenience of reduced data entry, advisors can now focus more of their precious time prospecting for new business. Now able to more effectively nurture relationships with their clients, advisors will be well-positioned to cement trust with their more profitable clients, win future large dollar opportunities, and receive more referrals to other high net worth individuals.
Additionally, advisor teams will now have more time and resources to better serve their existing client base. Moreover, advisors will be more prepared and better able to quickly respond to client inquiries and possible even turn them into sales discussions. For instance, suppose an advisor has been unsuccessfully trying for months to reach one of his C-level exec clients about a substantial IRA R/O opportunity and a forthcoming maturing CD. Then, out of the blue at 7am, the exec randomly calls just after the advisor has turned on his computer. If the advisor has to slowly fumble through multiple systems to address the busy exec’s question and give him a brief update on his portfolio, he will run out of time to engage in quality dialogue and ask for more business. It could be weeks, let alone months, before they speak again, and by that time, the funds may already have been invested with another financial institution. A better scenario for the advisor would be to immediately pull up the client’s name in a CRM system, such as Microsoft Dynamics CRM. From CRM, the advisor could then quickly glance at current opportunities, answer the exec’s question, provide him some insight on his investments, and schedule a portfolio review meeting. Without having to open up multiple systems, the advisor can view background info, opportunity detail, and portfolio holdings all from within his CRM system. Then, after the call, the client data from CRM could automatically populate an integrated financial planning engine to produce a proposal on how to better allocate the rollover and maturing CD funds. Next, the advisor could email the proposal to the exec and instantly store the email message and proposal documentation in CRM for future reference and follow up. Having a single comprehensive view of the client due to integration is a huge time saver and competitive advantage for financial advisors.
Findings from the Aite Group further support the case for integration. Their research indicates that advisors leveraging integrated technology spend close to 50% more time with clients compared to other advisors. Along those lines, Aite also found that there is a direct correlation between the level of technology integration and RIA firm size. For instance, their research shows that 91% of surveyed RIAs with assets under management of $100 million or greater have most or all of their systems integrated.
Without tightly integrated, configurable, and easy-to-customize business applications, financial advisors will not be able to provide an optimal level of client service and grow their book of business. Financial advisory firms must invest in integrated technology to enable their producers to be more efficient. As financial advisors spend less of their day on manual-intensive administrative work, risky data duplication, and onerous switching between multiple screens, they can commit more time to revenue-generating activities with high-growth clients and prospects.
Microsoft Dynamics CRM is one example of a cornerstone system containing an open, flexible architecture that can seamlessly integrate with not just other Microsoft applications, including Outlook, but also with other core 3rd party applications on the advisor workstation. Check out www.capitaleffective.com to learn more about how investing in Microsoft Dynamics CRM and integrated technology can produce significant dividends for financial advisors.