2015 InvestmentNews Advisor Technology Study Highlights: Integration and Going with the (Work)Flow

By Raef Lee, Managing Director, SEI Advisor Network on Friday, April 10th, 2015

There are a couple of technology studies produced on a yearly basis that are worth a look. They serve up a whole bunch of statistics and it is worth taking a step back and seeing what those stats mean to you. One of the more in-depth studies is just out from InvestmentNews and is entitled InvestmentNews 2015 Adviser Technology Study. You can purchase and download the study here.

In my review, I’m not going to play back all the statistics, but will highlight the themes that emerged and that we feel are especially important for advisors.

Integration is at last real
For the last five to 10 years, there has been a constant drumbeat about integration. Custodians came up with different ways of approaching it. Big RIAs spent a lot of money putting together unique solutions. We have a long-held view that integration is not a word that an advisor should have to use, let alone understand the detailed ways that applications interact with each other. Advisors care about simple and easy-to-use applications where the data is entered once. However, the study shows that integration is at last really in place, with more advisors taking advantage of integrations (such as CRM) being provided by the vendors, rather than having to create their own. This illustrates that the integration of the front office for all advisors, not just the large ones, is now with us.

Workflow is driving technology acquisition
A trend I was pleased to see highlighted is the way workflow is coming front and center. In the study, the most popular answer to what would prompt an advisor to consider changing technology was “to improve workflow.” This is the first time I’ve seen this called out in industry statistics. In our workflow whitepaper, we outlined the premise that the way advisors perform their business (workflow) should drive the choice of technology. It is also good to see that CRM vendors, who typically implement workflow, understand this also. The new versions of Redtail and Junxure Cloud have sophisticated new workflow capabilities built into them.

Don’t be the CTO
Another trend reaching maturity is firms reaching out for help for their technology needs. The study uses a great term, “knowledgeable staff,” as people in the firm who, as part of their job, also support the firm’s technology. Those staff were historically given responsibilities far afield from their main job descriptions. Two years ago, “knowledgeable staff” did more technical support than third-party contractors; now, it is the other way around. As more applications move into the cloud, we should see this trend continue.

Use what you’ve got
It is so easy to be enamored by the shiny new toy. But the study outlines that advisors are becoming more aware that the best way to get ahead with technology is to make the most of what you already have. In fact, 55% say that fully using the firm’s current technology would be most critical to achieving their growth goals. This is in comparison with 28% who believe those goals can be attained by investing in new and emerging technologies.

We have all heard about the recent cyberattacks on Sony Pictures, Home Depot, Staples, and closer to home, JPMorgan Chase. These big, visible attacks have pushed cybersecurity into the public view. Advisors are now being asked more often by their clients, “How safe is my precious financial information and, more importantly, my assets?” The study shows that advisors are not able to field these questions confidently.  Only 2% say that they have had data compromised by a security breach; with 3% saying that they did not know. However, it is likely that many more actually do not know if they have been breached. This has created a new crop of vendors who would like to help advisors with cybersecurity. The list includes: External ITItegriaTrue North Networks and Right Size Solutions. This is an area that is only going to receive more and more attention.

The pace of change
This study is an interesting snapshot of the advisor technology world. In general, it shows that advisor technology is accelerating its pace of change and that the key element in distinguishing the most profitable and innovative advisor firms is the way that they use their technology. For an advisor to be successful, it is more about the human relationships and the trust they build with the clients. But if they are going to be both profitable and efficient, their success must include strategic use of technology.

Raef Lee is the technology contributor for Practically Speaking and he also serves as a Managing Director for the SEI Advisor Network. This article was originally posted on the SEI blog.

comments powered by Disqus