Click here for a pdf version of Financial Planning's Software Survey 2008 from the December issue.

Welcome to Financial Planning magazine's second annual software survey. We are happy to report that more than 350 of you responded to our survey this year, so our findings are based on the reports of a broad swath of readers. Next year, we hope even more of you will respond.

Economic and political events over the last few months have served to increase the likelihood that demand for independent financial advisors will soar over the coming year. The collapse of several prominent wirehouses and banks, combined with the weakening of others, should lead clients of these firms to consider the benefits of working with independent advisors.

In addition, the poor performance that many self-directed investors have experienced recently will cause some of them to seek professional guidance. On the political front, the election of Barack Obama, combined with Democratic gains in the House and the Senate, will surely lead to changes in tax and economic policies. Americans will need help sorting through the new economic policies and determining strategies that are appropriate for the altered environment.

While many of you are currently focused on reassuring existing clients and tax-loss harvesting, 2009 could prove to be one of the best years ever for financial planning firms to bring in new business. But in order to do so, firms will need to become more efficient. Since adding qualified new staff is challenging and costly, firms that leverage existing staff through improved technology and better practice management techniques are the ones most likely to prosper in the coming year. We hope that this survey will help you pinpoint some products that can help you take advantage of the growth opportunities that lie ahead.

This year, about 350 of you told us what software you use and how satisfied you are with it; that's a 46% increase in our survey sample over last year. As was the case a year ago, a few of your answers surprised us. Some of your perceptions about what specific programs can or cannot do were off base. These misconceptions could be holding some respondents back: By choosing the wrong program for a job, advisors are failing to achieve the return on their technology investment that they should. This in turn could cause them to underinvest in the future. We hope that some of our findings will help correct some common misconceptions, thereby helping readers make better technology decisions in the future.

CRM Software

Client relationship management (CRM) is arguably the single-most important factor in establishing and maintaining a successful financial advisory practice. Clients are paying for your advice, and in order for clients to value your advice, they have to trust you. Clients may initially come to you through referrals, your reputation in the community or through some other channel—but to retain them, you are going to have to nurture relationships over time and continue to prove that you are worthy of your clients' trust.

Many factors go into creating and maintaining trust, but a fundamental one is keeping in contact. Successful advisors stay in touch with their clients during good markets and bad ones. They have a system in place that ensures that they make a predetermined number of phone calls to clients every year, that they send them a predetermined number of emails each year, and that they meet with each client an appropriate number of times annually, either in person or virtually via video conferencing. These advisors also make sure they never miss a client's birthday, anniversary or other important date. All of these client "touches" are initiated, monitored and recorded using CRM software.

CRM software can also play a critical role during times of economic crisis, such as the one we've been experiencing. One excellent trust builder is to proactively contact your most nervous clients when unexpected volatility strikes. With a good CRM system in place, it is possible to segment your clients ahead of time, so when an unexpected crisis does occur, you can automatically generate your list of clients who will need hand-holding the most.

Yet another way of generating trust is to insure that tasks involving multiple steps are always executed in a uniform manner and that no detail falls through the cracks. Creating and managing automated workflows through the use of CRM software ensures delivery of uniform service. As an added bonus, it improves office efficiency, thereby lowering the cost of delivery. And since all work is recorded, the CRM system can produce valuable time-management information that allows managers to eliminate bottlenecks and streamline workflows.