Adviser Technology: How to Focus on What Matters Most

Journal of Financial Planning: February 2016


Greg Friedman, CFP®, is founder and president of Junxure, a practice improvement firm, and Private Ocean, a leading wealth management firm. He is a relentless innovator and advocate for excellent wealth management, which earned him recognition three times on Investment Advisor Magazine’s list of the Top 25 most influential financial advisers.

What problem would you most want technology to solve for your firm?

When it comes to technology, advisers can’t help but feel like they’re constantly trying to keep up with the latest apps, programs, and innovations. None of us has the time day-to-day to investigate each new breakthrough, and it seems that every month we’re faced with the latest and greatest tech designed to help us move faster, serve our clients better, and become more efficient and organized.

It’s not that technology can’t help us with those goals, it’s that the tone of marketing these solutions today often plays to our fear—our paranoia, even—that we’re falling behind. This is a personal frustration of mine, as I run a billion-dollar RIA where I live on technology, and then I also run a tech company that provides CRM solutions to advisers. I travel to many industry events where I discuss the state of adviser tech and what it really means for firms. Where I see a gap, from listening to countless advisers, is between marketing and reality.

So when I speak to advisers, I simply ask one question: What is your single biggest challenge that you’re trying to solve in your firm? Their response will help lead them toward the technology that they need to succeed.

The Noise vs. the Need

We all read the same publications and attend the same conferences. We know what’s “hot” in the industry and what the buzzwords are. From understanding the threat posed by robo-advisers to wooing next-gen clients, many of us are in similar situations facing similar challenges. We know that data is (or should be) available on-demand, and that clients have different expectations from their adviser today than they did even five years ago. Technology was meant to help us overcome these challenges and stay current with our evolving needs. As a result, we’ve seen a glut of tech offerings that solve problems advisers didn’t even know they had.

For example, we all hear how we need to jump into social media if we don’t want to get left behind. A flashy new social media app then promises to integrate, upload, and monitor data that is supposed to help a firm stay on top of their clients’ activity on channels like Facebook, Twitter, and LinkedIn. But ask yourself: do your current clients actually use social media? Some advisers would answer “no.”

It’s not always a “you’re not keeping up” situation, but rather a “you’re too early to consider this technology a priority” for your firm. Yes, you may need to appeal to millennials in the near future, but maybe that’s not who you’re working with right now. A constituency in the profession says we need to heavily market to 30-year-olds, but in my case, most people in that age range can’t afford our services. So why would we need to spend money and resources on technology and marketing when that’s not who we’re appealing to right now or who we currently serve?

No two firms are alike, and neither are their technology requirements. The tech stack I use in my firm is going to be different from firms that work with the mass market, for example. Trying to follow the leader or do what others are doing just doesn’t do your business justice.

It’s important to turn down the volume on the noise we hear about the latest, greatest tech inventions and turn up the analysis of your firm’s challenges. Separating the flash from your firm’s reality is key to helping you determine what technology you need to meet service, growth, and profitability goals.

Looking Inward, Not Outward

I was at an industry conference recently in a session that discussed disruptive technology and where advisers should start if they want to truly make an impact on their business. The advice was this: “Sit down and look at the technology you have and ask yourself, ‘If I was starting out as an adviser today, is this the tech I would be using?’ If not, throw it out!” That approach doesn’t take into consideration the firm’s business model or the clients an adviser serves. The focus is misplaced on technology, rather than the target client and their needs, and it’s not asking the real questions which are: “What do you want your business to accomplish?” and “What’s standing in your way?” Starting from square one with technology can be catastrophic, not to mention cause unnecessary disruption to the business.

Instead of looking outward at technology and what’s available on the market, start by understanding the current state of your business and its unique challenges, and then asking yourself:

  • Who does your business serve now? What are their expectations of you and how can you improve?
  • Where do you want to take your business in the future? What types of opportunities are you hoping to create for the firm?

Your goals today and tomorrow should align, and this analysis and reflection will give you a clear vision of where to focus your time and resources to technology. For example, a majority of firms still spend an enormous amount of time doing paper quarterly reports, which have become obsolete in recent years. Clients today, regardless of generation, have access to their data on-demand in everything they do. A client portal, accessed via your website, is one of those must-have offerings you can quickly implement to extend your services online. It cuts down on paper, saves resources, and provides you with another way to enhance your service. Adopting a portal today also allows firms to serve current clients while also considering future clients.

If you’re looking to upgrade your technology, keep in mind that what you need might be right in front of you. Yes, change can be difficult, disruptive, and costly, and that is why I always say that you should only adopt new technology if you truly need to change.

Have you looked at all the capabilities of your current tech suite? After you’ve determined what your challenges are and what you need to remove them, you may find you are better served taking better advantage of what you currently use. Have there been updates you don’t know about? Is there something on the development roadmap that will alleviate one of your biggest challenges? I recommend reaching out to your tech vendors and asking questions. Take the training they offer and dig deeper into your current investment. If you find that the capabilities you need are not served, you now have the ability to look at new options with a clear lens.

In every firm there are places where you may find yourself lagging behind, but I often find that they’re not the places you expect until you roll up your sleeves and assess your business. Once you’ve taken the time to look inward at your firm’s challenges and your current tech suite, the next step is to start looking at vendors who offer the systems that fit into your short-term and long-term goals. Just remember that you should not have to fit your firm into any program’s feature set—your technology should work to meet your unique needs.