Building your RIA tech stack: tips, strategies, and best practice

Apart from having the right people to run your RIA business, having the right tech stack to enhance your workflow and productivity is key to your RIA’s success. In some cases, your RIA’s tech stack can even spell the difference between finding and keeping new clients and losing them to another RIA firm with a superior software suite. 

Your RIA’s technology stack can be indispensable for handling tasks ranging from back-office work to crucial income-generating tasks. With a cohesive tech stack, you can do important business activities like your RIA’s performance reports, client account rebalancing, and tracking current and prospective clients. 

In this article, InvestmentNews discusses the importance of RIA tech stacks. We’ll highlight the benefits of a properly assembled suite of tech tools not just for your business, but for your clients as well.  

What is an RIA tech stack? 

An RIA tech stack is a set of software tools needed to operate an RIA. This suite of software essentials can provide exceptional service to current and/or potential clients.  

What kind of software does an RIA need most?  

A 2023 study by industry expert Michael Kitces mentions the top three tech solutions most desired and used by RIAs:  

1. Customer relationship management (CRM) platforms 

A CRM platform can help your RIA firm manage relationships with your existing clients. This is also an excellent way to keep in touch with new prospects.  

Choose a CRM platform with features like automated lead management and can be integrated with marketing tools – specifically email marketing campaigns for lead generation. This is crucial, since email marketing is one of the best ways to target the right customers.  

With a good CRM platform as part of your RIA’s tech stack, you and your staff will find it easier to nurture new leads and cement long-lasting relationships with your current clients.  

2. Financial planning software 

This type of software is often used for other industries like healthcare but is an absolute must for your RIA firm. The right financial planning software can help you streamline your RIA’s operations and provide excellent service to your clients. Here are the features to look for:  

• cloud-based data storage – this is critical since it allows your firm’s financial advisors to collaborate and share client data. The software can be deployed, and the data accessed by authorized users from anywhere it’s needed. And since your staff can access the same information in real time, there’s less chance of errors in handling client accounts  
• consolidated ledgers – financial planning software should allow ease in report generation on any data you choose. A cloud-based suite should allow your firm to consolidate ledgers across multiple branches or franchises, regardless of their currency and location   
• automated workflows – your accounting processes should easily be automated by your choice of financial planning software. It should save you and your finance team a lot of time and effort by automating repetitive, tedious tasks. This can also reduce the likelihood of data errors that could lead to costly mistakes 
• audit process – your financial management software should provide a complete and efficient audit trail of your company processes. The audit feature should trace the original transaction along with the workflow and approvals 
• real-time data access – this feature can make business decision-making easier, even if it’s spur-of-the-moment. With real-time data, you can confidently make informed decisions with the latest information easily available 

3. Portfolio management / performance reporting software 

Portfolio management software should allow users to manage a wide range of assets and investments. 

Its primary function is to track results, manage risk, and adjust to changes in market conditions.  

Here are some features investors can expect from a good portfolio management software:  

• portfolio analysis and tracking – this is the software’s primary feature. Along with efficient portfolio management, this software should also allow for asset customization, modifying and tracking investments in real-time, so users can make informed decisions 
• messaging and communication – this feature allows users to have real-time chats and easily share documents, reports, and financial data so users can meet and collaborate to exchange essential information 
• data handling – users should be able to combine data from various sources like RIA custodians, internal sources, and market data providers 
• risk management – a good portfolio management software should allow investors to assess and manage risk at the portfolio level 
• compliance and regulatory reports – automated compliance monitoring and reporting would be very useful for institutional investors, especially RIAs 

While these three software suites are among the most crucial tech tools (according to a study), you may get a slightly different picture if you ask an individual RIA. According to Joel Bruckenstein, FinTech expert, President and co-founder of Technology Tools for Today, the most important are: 

1. Microsoft 365 
2. CRM
3. portfolio management and accounting, rebalancing and comprehensive financial planning software 
4. a client portal 

He says, “We are seeing a comeback of the all-in-one solution, which can include some or all of the above (CRM, Portfolio Management, Financial Planning software). Orion, Envestnet,  Advyzon, and Advisor Engine are examples of firms that bundle multiple software tools. I also think that there will be an uptick in the usage of Estate Planning software as we approach the sunset of the 2017 tax bill." 

Bruckenstein also mentions the importance of having a tech-savvy custodian. Here are some tips on how to choose the best RIA custodian for your practice. 

Some of the other useful tools for an RIA tech stack can include:  

• client portal 
• productivity platforms – including an internal chat/collaboration platform, file management and sharing, task management 
• cyber security software 
• RIA custodial solution 
• proposal generation 
• investment research tools 
• document management 
• specialty planning – including student loans, estate planning, tax planning, etc.  
• workflow support 
• note-taking 
• data gathering and analysis  
• marketing software 

Marketing software can include:  

• email automation and scheduling 
• automated social media posting and scheduling,  
• client communications 
• meeting scheduling solutions 
• virtual conferencing 
• website builder/content management system (CMS) 

How to choose the best tech stack for your RIA 

When building your RIA’s tech stack, it helps to follow the industry standard of choosing the appropriate CRM, financial planning platform, and portfolio management software. However, building the best tech stack for your RIA is not that simple. InvestmentNews recommends these steps:  

1. Detail your process 

This could take a few hours to a couple of days, depending on the size of your company and the intricacies of your business process. By “process” we mean how you get new clients, service their needs, and keep them as clients.  

A good starting point is to pose the question, “How do we currently handle the business, starting from a prospect’s initial inquiry, to handling their portfolio, then deducting our fees or commissions?”  

2. Consider the needs of your staff 

Consult with other members of your RIA firm. To make efficient use of time and resources when building your tech stack, find out the needs of each of your staff, from the departmental to the individual level.  

Refer to your process of sourcing, onboarding, servicing, and keeping clients. See where your staff and your clients’ needs intersect, then choose the software that fills the intersecting needs.  

For example, advisors and marketing staff need to share product information, client information, and coordinate sales and marketing efforts. So, what they'll likely require is an all-in-one platform for file sharing, real-time chat, messaging, investment analysis, performance analysis, and performance reports.  

2. Choose from reputable software developers 

After consulting with your staff on their software needs, look at several options and do due diligence on them. As much as possible, choose software from established companies. When applicable, they issue updates for better functionality and updated protections from cybersecurity threats as they arise.  

3. See what other RIAs are using 

There’s no rule that says you can’t copy the tech stack of other RIAs. If you have contacts or friends in the industry, ask which software they use. You can even make polls on LinkedIn or ask industry experts straightaway for their opinion on which tools make up a good RIA tech stack. 

4. Don’t forget to loop in the IT department.   

Some companies may do this as an afterthought, but it’s best to include the people who handle your RIA’s backend operations from the beginning. Make sure that your IT department or IT consultant participates in the tech stack building and selection process. They will likely be more familiar with the tech tools and recommend the tools that work well together. Bonus: your IT staff will also already know how to handle any glitches.  

5. Figure out your budget 

Once you’ve figured out how your RIA does business and determined the tech stack that can help do it more efficiently, decide on how much you can spend on the tech stack.  

You can decide on a budget before buying or subscribing to the new software. But don’t finalize the purchase or subscription unless you:  

• know how much the software is worth to your RIA 
• have a plan to pay for the software on a monthly or yearly basis 
• know of any onboarding fees and how to pay them 
• have a plan to pay for related expenses, like training costs for new users 
• know the costs of getting familiar with the tech stack 

After you and your RIA firm’s accountant have crunched the numbers, you can then set a budget and possibly a monthly target for covering the software expenses. You may also want to know the costs of not getting a tech stack for your RIA as well, if accounting needs a strong justification for the expense! 

Here are a few more tips from RIA enthusiast Chuck Failla. In this video, he discusses the essentials of building an RIA tech stack. He goes over some tips and strategies to help you choose the right technologies for your RIA practice:  

Here’s a listing of goRIA podcasts for more advice and insights from Chuck Failla on other aspects of building your own RIA practice.  

Why is having the most suitable tech stack important for an RIA? 

The benefits of having a cohesive tech stack for your RIA firm cannot be overstated. Many clients these days have heightened expectations. With a good tech stack, your RIA can:  

• deliver a real-time, digital-first client experience 

• stand out among competitors 
• easily tailor-fit products and services to suit various types of clients 
• retain valuable talent 

A good tech stack can also help RIAs keep key members of their staff.  

Which software contributed most to getting the best client outcomes?  

A recent study from the Financial Planning Association has shown that client portals reap the most benefits for RIAs, ensuring some of the most favorable client outcomes.  

In the study, 849 financial planners said that client portals as among of the most helpful and impactful technologies. In fact, different percentages of the financial planners surveyed reported:  

On the clients’ side, they reported these benefits from using the portals:  

• reduced financial anxiety 
• greater confidence in their financial decisions 
• greater motivation to achieve their financial goals 

FPA President for 2023 James Lee added, “the development of technology solutions has grown exponentially in recent years to serve the needs of financial planners and their clients. Technology has played a critical role in connecting me, as a financial planner, more meaningfully to my clients while connecting them to critical information.”  

Lee adds, “this research with our partners... doesn’t just highlight that connection; it quantifies it and provides the rationale for every planner to consider the role of technology in their practices.” 

The perfect RIA tech stack should complement your practice 

Putting together and implementing a tech stack for your RIA doesn’t have to be overly complicated – it just has to complement your RIA practice. For the most suitable tech stack, remember to involve all the relevant users who must collaborate and coordinate their efforts to deliver the desired results.  

Don’t forget to consult IT professionals who can help you choose the most important tools. Prioritize your client portal, CRM platform, financial planning software, and portfolio management software, then add any other helpful tools to your tech stack.  

For updates on all things tech in the investment industry, including RIA tech stacks and other tools, read and bookmark our Fintech page. 

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