A great attribute of our profession is the willingness and desire of advi- sors to exchange ideas and best
practices about what is and is not work-
ing at their firms. Of course, this can be a
challenge to interpret the information and
determine what actionable steps to take.
Specifically, it can be hard to know if
what everyone seems to say is the “best”
is actually good technology advice for
your firm. Considering all the variables
involved and differences between advi-
sory firms, these decisions often require
Common areas that advisors think
about when comparing their firm with
others include metrics like assets under
management, office location(s), num-
ber of client relationships, number of
employees, growth rate, etc. These are
important details to understand and good
starting points to compare notes with
another firm regarding technology prod-
ucts and ideas. However, advisors often
put too much emphasis on these metrics
as they think about whether a technology
product might work well for their firm.
In fact, sometimes an advisor might
completely “discount” the technology
information shared from another firm
simply because they are much larger or
smaller based on these metrics. Remember
that these metrics are just one component
of interpreting the information.
Certainly, critical components for inter-
preting technology advice is the busi-
ness similarities and differences between
firms. In hearing the advice, try to under-
stand if the firm is more of a financial
planning centric practice, investment
management, insurance solutions, maybe
all of the above. For example, a financial
planning focused firm might highlight all
the success and efficiency gains that they
have enjoyed in the client on-boarding
process using their technology solutions.
Yet this might not be applicable to a firm
that is primarily an investment management firm. The financial planning firm
is likely gathering different and perhaps
more client data points to build a comprehensive financial plan compared with firms
that don’t share the same business focus.
Or let’s say a firm is praising their portfolio rebalancing process and the systems they
use to manage investments. No doubt there
is something to learn here, but remember
that the investment allocation and trading
process is another area that can involve
important differences between firms.
I have seen many firms spend significant money, time and effort to achieve
scale and reliability with their portfolio
implementation and rebalancing process, so bear in mind that even firms
with a similar business focus can have
critical differences. This especially
relates to areas that involve customiza-tion and unique business processes.
Striving to achieve “technology success” is really about the overall journey,
the history, and the experiences gained
along the way. It is rewarding for advisors to share their technology advice
based on the benefits and successes
achieved by their firm. We love to hear
the “winning” details.
From these success stories we often
hear from other advisors, “Just tell me
what I should purchase for my firm.” But
it’s really important to hear about the
experience with products and processes
that didn’t work, which ultimately led to
technology successes. In addition, when
you listen to the technology journey,
don’t be surprised if some of the challenges and failures for one firm could
actually be successes for your firm.
Also, listen to comments about the
employees involved or the “technology
culture” of the firm. No doubt there
are significant differences in the skill-sets and overall experience of employees between advisor firms. For example,
you could hear about the success with
a complex product that was partially
achieved because the average tenure of
the firm’s employees was over 10 years.
Some firms can be fairly comfortable
in trying new technology products and
working through the issues, while other
firms might consider this a significant
distraction and therefore are much more
conservative about adopting a new technology product.
Dan Skiles is the president of Shareholders
Service Group in San Diego. He can be reached
THE TECHNOLOGY COACH
By Dan Skiles
Are You Really Getting the ‘Best’
Different firms have different needs in the tech space; in some cases, one
firm’s success can be another’s failure.