Firms should set out a five-year roadmap detailing how technology can enhance their propositions
How an advice firm uses technology will be one of the main determinants of its success and profitability. A growing body of research shows those that use it wisely can double the number of clients and assets under advice.
If you feel you have not taken advantage of these opportunities, perhaps it is time for a change. Who wouldn’t want to double their profits for less effort in the long run?
This week, I want to provide a few tips on how to start approaching such a change.
Many practice management systems have come on leaps and bounds over the past few years, offering far greater functionality than ever before. Does that sound like the system you are using? If not, then it is time to re-evaluate things.
This does not always mean immediately severing all ties. My default response whenever anyone asks for advice on switching software supplier is: are you sure you are getting the best from what you already have?
Changing systems can be a painful and time-consuming process.
While it may have enormous benefits over the long term, it is crucial to check you cannot do better by getting more out of your existing solution.
Create a detailed list of requirements, collating different priorities from different areas of your business, and call in your existing supplier. Present them with your needs and ask them to demonstrate how much of this they can support.
Many software suppliers have added extra functionality that existing users may not be aware of. In such situations, organising training on new features is a logical next step before exploring alternatives.
The range of software used by advice firms has grown significantly. While the practice management system remains pivotal, there are many more solutions available to improve efficiency and enhance client propositions. Until recently, these operated independently and required frequent manual rekeying of data but now this is largely a thing of the past.
More practice management systems are using API integrations to work seamlessly with the likes of cashflow planning, risk profiling and portfolio management tools.
Look at all the other software packages you use and check how easily they can be integrated with your practice management system. If there are a couple of third-party systems you use a great deal, ask them which practice management systems they think link best.
It is also really worthwhile to review the quality of links between your practice management system and the life offices and platforms you do the most business with.
First and foremost, your practice management system should be your central record of the truth, so moving information electronically means it should be accurate and up to date. There are significant differences between the levels of information platforms share with different practice management systems. As I mentioned in my last column, it is an area where they can do much more. Check your platform’s policy on sharing data. If a platform is not willing to share what you need, how you need it, it is time to review your arrangement.
I would urge all advice firms to start setting out a five-year roadmap detailing how technology can enhance their propositions. Some really great tools are emerging. Having a clear view of how they can help you and your clients should be a key part of business strategy.
The way in which advisers will interact with clients is going to change significantly over the next few years. The role of technology is to enhance this, not disrupt it, but it is important to have a clear plan on how to make the most of it.
Given the evidence that maximising software use drives enhanced service, improved efficiency and significantly increased profit, it makes sense for every advice firm – even those where the owners plan to retire in a couple of years – to look at how things can work better.
Ian McKenna is director of the Finance & Technology Research Centre