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10 Steps to Evaluating New Technologies for Financial Advisors

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In the information age, the technologies we use on a daily basis are the fuel to grow our businesses. A Federal Reserve Paper found that technology use can drive business growth by 3-5% per year. Technology can be overwhelming to evaluate, but has the power to make your days either easy and efficient or difficult and maddening. When we work with advisors, we typically ask which of the following technologies they are using:

  • Customer relationship management (CRM) system for managing clients and prospects. The command center for staying organized and keeping client information at your fingertips.
  • Website and marketing tools to manage your website, blog, email newsletter, social media, and other marketing communications.
  • Financial planning software for preparing client reports, creating financial plans, and collaborating with clients on their accounts.
  • Financial research tool to access data on funds, companies, and markets.

If you ask ten different advisors which of these technologies they use, you’ll get 5-7 different answers. We know from working with thousands of advisors that mistakes in choosing technologies can waste hours of productivity each week and cause incredible headwinds to growth. At worst, they could disrupt client experience and cause confusion for clients.

But choosing new technologies doesn’t have to be risky. By doing the required due diligence, advisors can select the best new tools and be confident in their decision, fully invest in learning how to use them, and have to change systems less frequently. Here are our steps to avoid making technology mistakes:

  1. Ask advisors with similar business models. Some advisors query which systems the top producing advisors are using, which may or may not apply to the size and complexity of their own firm. Top advisors may use technologies that are more complex and expensive than an advisor with fewer clients needs. Seek out a few firms that are the same size or slightly larger than your firm. Chances are, technologies those firms recommend will be a smart fit for you.
  2. Consult your Home Office. It’s important to ask the home office folks which technologies they recommend because they have visibility to the technologies that are working for other advisors. They also are aware of negotiated price discounts and integrations that may make your life easier.
  3. Use a LinkedIn Group to get recommendations. I love to pose technology questions within groups because members are quick to give their experience, and you can get a consensus quickly. Most broker-dealers have LinkedIn groups for their advisors where you can browse discussions and ask questions.
  4. Make a short list, then do a demo. Get together a list of 3-5 highly recommended providers for the system you are looking for, then do a one-on-one demo if possible to ask questions and see the tools in action. Take notes of anything you think is lacking or a deal breaker. Compare your notes on your short list and you should have a clear winner.
  5. Call customer service before you purchase. I see advisors leave technology providers most often because of service related problems. Call the customer service department before you purchase to check the wait time as well as the friendliness and capability of who answers. Ask a few questions to kick the tires.
  6. Check out the available ongoing education. Make sure the technical support and resources fit your needs. If you are the type of person who prefers to watch how-to videos, make sure the technology provider you select offers a video library. If you need to pick up the phone and speak with a person, be sure that option is available.
  7. Think of the future. We all plan to grow our businesses in the future. But if you’re serious about growing in the double digits each year, make sure your technology can scale with your firm. Be sure to evaluate pricing that will serve your needs now and at double the size to be sure the price increases won’t be prohibitive in the future.
  8. Manage your risk. All technologies will fail from time to time. If your tablet breaks down before a lunch meeting, your business will survive. But if your clients can’t access their accounts for a week, it’s a catastrophe. Think through the risk involved if the technology fails and formulate an emergency backup plan if necessary.
  9. Take advantage of the free trial. I’m always amazed that it’s commonplace to purchase a home to live in for years without having ever spent a night inside. Doing a test drive is the surest way to find out if you love or hate a particular technology. If a free trial is offered, take advantage and see how you feel when using the tool. If you are excited to use the technology, impressed by the features, and it seems fun to use, you have a winner. If it’s overwhelming, complex, or frustrating, you may want to keep evaluating.
  10. Immerse yourself in learning the new technology upfront. Learning a technology well from the start is a lot like investing for retirement early, in that it will continue to reap rewards over the long term. Putting time and energy towards learning the basics will make you more powerful and efficient each day you use the new system. You will take advantage of more features, waste less time, and enjoy the process more. I analogize finding proper technology training to using a top-rated tour guide to see a new city. Imagine the insight, education, history, and landmarks you can see with an experienced guide that you would miss on your own. If you get stuck using the system along the way, be persistent and get answers to your questions so you can grow your skills over time.

Spending time upfront to carefully evaluate new technologies is a lot like carefully constructing a portfolio that gives a tailwind over time. Be patient, try to develop a curiosity in your hunt for the best tool, and enlist experts when you need help. What is the best technology you have seen advisors use? Have you seen any big mistakes? Share your thoughts by commenting below.

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