Efficiency is key when choosing financial advice software

Efficiency is key when it comes to choosing financial advice software, writes GEM Capital's Mark Draper.

There has been a lot of talk about technology providers in the financial advice space.

As a financial planner working for the past 10 years in a largely fee-for-service practice (we still take some trails), I believe that client relationship management (CRM) and Statement of Advice (SoA) production capabilities are only the starting points.

Financial planners need cutting edge software that helps us work more effectively, efficiently and compliantly with clients and which improves the overall productivity of our businesses.

Our software also needs to facilitate communication with our clients so that they see not only what we do for them (in the form of advice) but also the value of what we do, particularly during periods like the global financial crisis and its aftermath.

The following are the top 10 things financial planners should be demanding from their software.

SOA and annual/quarterly review generation

The software must be able to produce highly customisable, compliant SoAs and review documents quickly and efficiently.

CRM tools

The software should also offer CRM tools that allow us to communicate easily with our clients, in the format they prefer — text, email, phone or snail mail.

This function should integrate seamlessly with the portfolio management system so that we can deliver high quality, regular communications to our clients about any and every aspect of their portfolio (investment, securities and insurances) at any point in time.

In essence, what we need from our technology is the ability to function as a total communications hub.

Office efficiency

The system in place should also improve office efficiencies by filing any client documentation/communication under the client name automatically.

The bad old days of using one piece of software to look at a client’s portfolio, another to communicate with the client, and then filing manually should be well and truly over.

User-friendliness

Most financial planners are not technology gurus and they shouldn’t have to be. Software should therefore be intuitive and relatively easy to use.

A caveat to this is that if financial planners or their dealer groups make what is likely to be a significant investment in software, they also need to invest in the training that allows them and their staff to get the most out of it.

Technology, like all tools, is only as good as its end users and you can’t expect greater functionality if you don’t know how to use it.

Support

Because most financial planners are not technology gurus, technology providers need to offer ongoing technical support to financial planners.

Problems and glitches need to be remedied quickly. After all, we’re dealing with clients’ money.

In my opinion, any provider in the financial advice market that does not provide these basic functions is quite simply not serious about competing in the marketplace.

Data feeds

Software must be able to efficiently incorporate data feeds so that the information we have on hand is as up-to-the minute as possible.

This means feeds from various listed and unlisted sources as well as other fund manager and financial services institutions.

Ultimately, this should also include insurance and underwriting information. To be efficient, this will require commitment from the institutions providing the feeds to provide up-to-the minute information.

Ongoing investment in research and development

Technology requires significant ongoing investments in research and development (R&D).

A software provider specialising in servicing the financial advice market needs to continually invest in R&D to ensure that we as financial planners, who are dealing with clients’ money, are doing it as quickly and efficiently as latest technology allows.

Financial stability

Financial planners need to know that their technology provider will be around for the long haul.

Although big is not always necessarily better, when it comes to technology one of the issues planners and dealer groups need to consider is the longevity of the software provider.

Small newcomers might claim to be at the cutting edge, and might also claim to be nimble enough to implement technological enhancements quickly, but the hard fact of the matter is that technology and continued development and improvement of technology require capital — lots of it.

Only robust businesses can survive in such an environment. And I can think of few things more disruptive to my practice than having to unravel my business from one software system to another because a provider has gone bust.

Engagement

In order to make the enhancements that will make technology work harder and smarter for financial planners, technology providers need to engage with their users, interact with them and be responsive to their requirements.

Independence

Vested interests are a commercial reality, but if advisers use providers that are linked to product manufacturers they are likely to be highly incentivised to use those products.

They will therefore have less flexibility in providing solutions to their clients as they will not be able to select from the broad universe of available products.

Before making any investment in technology, I believe that financial planners and dealer groups need to ask themselves the following questions:

Does the software do absolutely everything we need it to do?

• Can it produce accurate, fully tailored advice and review documents efficiently?
• Does it effectively handle CRM?
• Can it facilitate client communication in the format the client prefers — SMS, email and snail mail?
• Can it incorporate investment portfolio management and associated securities pricing information?
• Does it provide data feeds into risk insurance and online underwriting updates?

Who owns whom?

• Is the business tied to a product manufacturer?

How long has the business been around?

• How well does it understand the financial planning industry?
• How well is it positioned?

Does the provider have enough resources invested in R&D?

• Is it likely to have the capital required for ongoing improvement?
• Is the provider constantly searching for ways to improve technology solutions for planners?

Can the software provider offer me excellent client service?

• Does the provider have the capacity to provide a hands-on approach to solve any potential software problems?
• Are the providers’ staff knowledgeable, efficient and willing?

Mark Draper is an authorised representative of GEM Capital Financial Advice (GEM).