To access a pdf of Financial Planning's 2009 Software and Technology survey, click here.
Welcome to Financial Planning's third annual technology survey. A number of factors have conspired to make this our best survey to date. This year, 1,550 of you responded to our questionnaire. That's more than four times the number of respondents we had last year and roughly six and a half times the number we had for our inaugural survey. This large sample gives us a clearer picture of what you think. And now, with three years of data under our belt, we can begin to track changes over time. Over the years, we've tweaked existing questions and added a few new ones. We think you'll be surprised and intrigued by the results.
The past 12 months have been an adventure in every way, and technology is no exception. Many advisory firms, confronted by a market meltdown and rapidly shrinking profit margins, immediately cut discretionary spending. While we would argue that technology spending is a necessity, many advisors delayed purchases nonetheless. A number of technology vendors we spoke with (who requested anonymity) confirmed that new sales through the first six months of 2009 were weak.
At the same time, the market meltdown exposed inefficiencies that advisory firms had overlooked when revenue growth was robust. So, while market madness in 2008 and 2009 temporarily hurt technology sales, over the long term it may help-by refocusing advisors' attention on the bottom line and the importance of efficiency, two areas where good technology makes a huge difference.
As has been the case in every survey, some of your responses really surprised us. As you'll see, the results offer a number of insights into which technologies work for advisors and which don't. You will find ideas for new products to pursue and old favorites that deserve an upgrade. The survey also contains ample guidance for software developers and marketers. In some cases, there seems to be a real disconnect between what advisors want and what vendors are selling.
SMARTPHONES
This year marks our first look at smartphone usage and satisfaction. It came as no surprise to us that more respondents use a BlackBerry (502) than any other smartphone. The iPhone placed second (305); Palm (195) and Windows Mobile (186) were in a virtual tie for third place; and Google's Android (71), the newest entrant, brought up the rear.
When it comes to user satisfaction, however, the numbers tell a different story. The iPhone was the clear favorite, with an amazing 64% of users reporting that they were "very satisfied" with their phones. This compares with 46% of "very satisfied" BlackBerry users. Palm (20%), Google Android (18%) and Windows Mobile (18%) trailed badly here.
At the other end of the spectrum, only 5% of BlackBerry users and 7% of iPhone users called themselves "very unsatisfied," while the others phones suffered higher dissatisfaction grades: Google Android (24%), Palm (17%) and Windows Mobile (12%).
It's clear that iPhone users love their phones and BlackBerry users are content. Google Android's poor showing was a surprise. Several factors may be at work here: First, at the time of the survey, T-Mobile was the only carrier offering Android phones, and nationally T-Mobile coverage trails that of Verizon and AT&T (the only iPhone carrier). In addition, T-Mobile offered only two Android phones, neither of which is produced by a leading cellphone manufacturer.
By the time you read this article, though, T-Mobile and Verizon will both have launched Android phones manufactured by Motorola. Verizon's Droid, for example, will feature improved hardware—a more powerful chip, higher-quality camera, superior design—as well as the new Android 2.0 software. We expect other manufacturers and carriers to offer Android phones by next year, which should lead to higher satisfaction ratings.
CUSTODIAL AND BD OFFERINGS
For the first time, we asked you to rate custodians' and broker-dealers' technology offerings. Among custodians, Schwab blew away the competition, with 45% of respondents calling themselves very satisfied and another 41% satisfied. A total positive response of 86% is very impressive. TD Ameritrade and Fidelity were in an almost dead heat for second place. Both had a total of 73% satisfied, but TD Ameritrade had a three percentage point lead in very satisfied advisors. Pershing had a respectable 65% total satisfaction rating.
We were fairly surprised to see that Shareholder Service Group (SSG) achieved only a 54% total satisfaction rating and a 24% very unsatisfied rating. This is all the more shocking since SSG essentially offers the same technology platform as Pershing-with additional enhancements. Furthermore, SSG touts its high-service/high-touch approach.
