Your Silver Bullet is a new organization devoted to improving integration among software applications used by financial advisors, as well as promoting new integration relationships (www.yoursilverbullet.net). The aim is to help financial advisors create their own "silver bullet"—that is, their own personalized, best-of-breed technology solutions through the purchase of multiple software programs that can act in concert and share data. The organization also hopes to become an information resource for financial planners, a sort of clearinghouse of information about which programs work together and, eventually, plan future integrations among applications, including timelines for integrations in progress.

According to Greg Friedman of CRM Software, the developer of Junxure CRM software and ClientView office management software as well as a founding member of Your Silver Bullet, the idea for the organization was born at the "2007 Technology Tools for Today Conference," in Miami Beach, Fla. "Two sessions at the conference really lead my partner Ken Golding and me to initiate the formation of Your Silver Bullet," Friedman says. "The first was Andy Gluck's general session, where he said that there was no one comprehensive killer app and that it was unlikely that such an app would emerge in the future. In addition, Andy said that advisors really need vendors to facilitate integration."

The second crucial session was on integration (moderated by myself), in which Golding participated. "The idea was to demonstrate how some programs from different companies actually can work together today," says Friedman. "The room was packed, which confirmed our belief that advisors desperately want their vendors to integrate with one another. It occurred to us that most of the integration work we did was based on bilateral agreements, which is not the most efficient approach. A more collaborative model would be much more efficient." So far, some 17 additional producers of advisor-oriented applications have joined Your Silver Bullet, and more are rumored to be on the way. Many already have bilateral or trilateral integration with other companies; for example, CRM and asset management firm Adhesion can work together. Other members include CRM company Protracker, portfolio reporting company Etelligent Consulting, financial planning firm MoneyTree Software, and document management company Laserfiche.

Creating Standards

Friedman and Golding decided to help create a structure for companies to come together and facilitate integration among members of the group. "Vendors need to agree on some ground rules and standards," Friedman says. "We hope that Your Silver Bullet will play a role in the creation of the standards this industry needs."

Membership is open to any software firm or software consulting firm that meets these four objective requirements:

1. The company has an open database architecture/structure or a well-defined interface (API) that facilitates the exchange of data with other member companies;
2. The company makes a commitment to have or create data interfaces with other member companies where sufficient market demand is present;
3. The company agrees to work with other member companies to solve interface problems and bugs; and
4. The company agrees to abide by the membership Operating Guidelines.

Why, one might ask, is Your Silver Bullet necessary at all? The short answer is that while the overall capabilities and quality of the computer hardware and software used by advisors has improved exponentially over the past 10 years, little progress has been made in the one area that's critical to advisors: integration.

Since the dawn of modern financial planning, advisors have relied on a collection of applications to run their businesses and serve their clients. The typical financial planning firm relies on three core professional applications: client relationship management (CRM) software, financial planning software and portfolio management/reporting software. There may also be a need for applications such as account aggregation, form-filling software and document management software. Finally, general business applications such as word processing, spreadsheets, email and presentation software are required.

For years, advisors have craved greater integration, particularly with respect to the three core applications. The benefits should be obvious. First, true integration offers a single point of data entry. Multiple data entry points and repetitive data entry requirements leave advisory firms more vulnerable to data entry errors. Historically, a firm might have to enter some of the same client data in a CRM system, a financial planning application and in a portfolio management system. This creates three times as many opportunities to make a mistake.

Updates and synchronization are related issues. If an advisor is storing client phone numbers in three separate applications, and the client changes one or more phone numbers, how does the firm insure that new phone numbers are promptly updated in all of the applications? As a practical matter, they often aren't. Firms storing unsynchronized client data in multiple applications will surely experience suboptimal performance; and under certain circumstances, the fallout could be far more serious. For example, if an advisor must urgently reach a client, and has the wrong phone data on file, the delay could have dire consequences.

Single-Vendor Approach

There are two major avenues available to advisors who desire integration. The first is to purchase all core programs from a single provider, thereby insuring compatibility. Most early attempts at integration followed this path.

For example, Roy Quarve, an advisor in Stamford, Conn., developed an integrated program called QPLAN that met with only limited commercial success. Previous versions of dbCAMS (www.fcsi.com) included both portfolio management and CRM components.

IFS, a forerunner of Interactive Advisory Software (IAS) (www.iassoftware.com), released one of the first integrated solutions for independent advisors in the early 1980s. After some initial success, it disappeared in the 1990s and was resurrected in 2001 as IAS. Currently, IAS offers coverage in all three core areas. Another existing all-in-one program, Morningstar Advisor Workstation Office Edition, offers portfolio management and lite CRM, with some coverage of financial planning.

The advantages of the single-vendor approach are simplicity and accountability. With a single vendor, advisors can achieve integration with one phone call. There's accountability because if you have a problem with any of the applications, or with the integration among them, you know exactly who is responsible for resolving the issue.

There are, however, a few downsides to this approach. First, you're putting all your eggs in a single basket. If a sole provider is going to be responsible for the three core applications that you use to run your business, you had better be very sure that you can rely on that vendor. This means that the vendor has to be competent, trustworthy and responsive. In addition, the vendor must have the financial strength to insure both continuous operation and timely upgrades.

Another concern is that the needs of advisory firms vary greatly from practice to practice. As a result, it's difficult for software developers to create a product in a single core area that meets the needs of a wide enough group of advisors to be financially viable. Imagine how hard it must be to create three core applications that appeal to a wide audience. While a few firms have had success selling integrated products through institutional channels, no company has yet managed to produce an integrated solution that appeals to a significant portion of the independent advisor market.

Best in Category

The second, and, many would argue, preferred method of integration is for advisors to select the best CRM, financial planning and portfolio management application to suit their individual needs, thereby creating their own custom "Silver Bullet" solutions. If the Your Silver Bullet initiative succeeds, advisors would be able to mix and match products from member firms, secure in the knowledge that all pieces will communicate effectively with one another.

As stated earlier, this has been a challenge in the past because integration among programs has been so limited. Recently however, a number of the industry's software vendors have developed application programming interfaces (API's) for their products.

Wikipedia defines API as "a source code interface that a computer system or program library provides to support requests for services to be made of it by a computer program." APIs can be thought of as tools, functions, procedures, data structures and building blocks that facilitate communication between the host application and a third-party application. This is a good first step, but it may not be enough.

According to Bob Curtis of PIE Technologies (developers of MoneyGuidePro), and a charter member of Your Silver Bullet, "Integration means different things to different people. Today, many integration projects are limited to moving data or files from one program to another."

Curtis says the ability to move information from one program to another is a step in the right direction, but he thinks the industry can do better. "In the future, I think Your Silver Bullet can lead to the development of better integration. True integration will occur when there is a logical connection between systems that results in seamless, real-time communication between those systems. We are not there yet, but that's where I'd like to see us in the future."

In the short term, Curtis says that members want to get people talking more about data integration. This, they hope, will lead to commitments on the part of additional firms to pursue greater integration among financial software applications. "Advisors are regularly telling us that they want integration," he says. "The goal of Your Silver Bullet is to facilitate that and to let them know what firms can provide the integration they need."

While there is little doubt that Your Silver Bullet has identified a real area of need in the community, it remains to be seen how successful they will be at achieving their goals. If advisors support the organization, and if that leads additional firms to join, the likelihood of success will increase.

However, even at current membership levels, don't count Your Silver Bullet out. Member firms all have a history of serving advisors successfully, and they all have a vested interest in furthering integration among member firms. This is an organization that has the potential to improve the profession in a meaningful way. To monitor their progress visit www.yoursilverbullet.net.

Joel Bruckenstein, a technology consultant, is publisher of Virtual Office News, a practice management and technology newsletter. Email him at joel.bruckenstein@gmail.com.