Leveraging technology to drive growth, and handling information overload and system integration, were among the concerns advisers discussed at an
InvestmentNews technology round table.
Advisers also said they are willing to pay for the right technology solutions.
The round table was held last month in Long Beach, Calif.
Certified financial planner Jeffrey E. Daniher said he pays a lot of money for some services. "I don't mind paying," he said. "I will pay for value."
Mr. Daniher is co-owner of Ritter Daniher Financial Advisory LLC in Cincinnati, which manages $115 million in assets.
"At Raymond James [Financial Services Inc. of St. Petersburg, Fla.], rather than buy an outside vendor for asset allocation software, I will give them [0.3 percentage] points for that benefit," said Steven B. Siskin, a Raymond James branch manager in Encino, Calif. "It just makes it easier to manage my practice, but you do need those particular tools in the business plan," said Mr. Siskin, who manages $120 million.
DOCUMENT MANAGER
On the subject of document management, Thomas C. Scott, a certified financial planner, said he "bought a very high-end scanner."
"Bring in your trust [instrument]. Bring in your tax return. Bring in your legal documents," Mr. Scott said he tells his clients. "If we had a cheap little $300 scanner, it would never work," he said.
Mr. Scott is president of Scott Wealth Management Group Inc. in Irvine, Calif., which manages $150 million.
Round-table participants noted that it is imperative that advisers recognize when they should be outsourcing technology in order to allow their firms to grow. They said that understanding that threshold and being willing to spend the money to outsource where it makes the most sense is the key in fostering growth.
Most people are afraid of technology and outsourcing, said Sheila M. Chesney, principal and chief investment officer of wealth management firm Chesney & Co. in Sheldon, S.C., which oversees $75 million in assets. "Those are the two crucial pieces to having a successful firm," she said.
Ms. Chesney said that she will buy the best there is. "We have a great [information technology] guy, who, if there is a heaven, will go to heaven," she said. "I'm not worried about the cost."
"A lot of shops skimp and save, and don't want to spend money," Mr. Scott said. "I think that's a big stumbling block for advisers," he said. "The technology has gotten to the point in the office where if you don't have a specialist, you're never going to make it to the big leagues."
Mr. Daniher agreed about the need for technology specialists, saying, "Our clients hire us because they don't know how to do financial planning. So why don't we hire people who have the expertise, just like our clients hire us?"
If advisory firms are not on the forefront of technology, they're going to get "gobbled up because they don't have to resources to compete," according to Mr. Siskin.
INFORMATION OVERLOAD
The round-table participants also expressed concern about handling technology information overload.
"You have to really be disciplined in this environment, because you'll get a lot of stuff thrown at you that you want to learn about, but you just don't have the time," Mr. Scott said.
"I want to use tools to filter the technological deluge of information," Mr. Daniher said. "I want to better utilize the feeds where the information I need comes to me," he said, commenting on the type of technology he'd like to see developed.
The move to web-based planning, collaboration and portfolio management applications is inevitable, the advisers noted.
"I think [collaboration] is going to come as the natural part of the adviser [web] portals," said Kim Moulton, principal, chief technologist and systems architect for Moulton Strategic Partners Inc. in Flower Mound, Texas, a technology consulting firm exclusively servicing financial advisory firms.
Mr. Daniher said he's challenged by keeping track of referrals and that a collaborative tool would help him match clients with the many attorneys with whom he works. "I may have a dozen attorneys that we work with who are qualified estate-planning attorneys, but I try to match them up by personality and by client," he said.
The advisers spoke of leveraging technology to put their firms' intellectual property and knowledge in their systems. Whether in the form of locally run customer relationship management applications, or similar systems or platforms hosted online, having that knowledge in some digitized, tangible and collaborative format is important to day-to-day practice management, they said.
"Our rule in our office is, if the meeting notes aren't put in Junxure [from CRM Software Inc. in Palm Beach Gardens, Fla.], the meeting didn't happen," Mr. Daniher said. "It has to be that way."
Ms. Chesney said her firm's website has a portal to collaborate with clients. "We give the clients the ability to put their documents up there," she said.
The round-table participants also shared their fears that an ever-greater reliance on computers and the Internet leaves them open to more security risks.
"Obviously, the people that you are hiring and the personnel you bring into your office are the first line of defense," Mr. Siskin said. "We register everyone, [take] fingerprints, the whole nine yards."
"I wrote an Internet policy," Mr. Daniher said.
"Our network is constantly penetrated or tested by outside people," he said. "If you're trying to do this by yourself as an independent, you're playing with fire."
E-mail Davis D. Janowski at djanowski@investmentnews.com
To read a full, edited transcript of the round-table discussion, visit investmentnews.com/techroundtable.
