(continued)

Over the past year, CRM more than proved its value in an extraordinary market environment. Any successful client-advisor relationship must be based on a solid foundation of trust, and as you are no doubt aware, that trust was sorely tested by the wretched financial markets in late 2008 and early 2009. As markets spiraled downward, panicked clients called and emailed at an alarming rate.

Those calls needed to be logged and returned quickly and effectively-a task that's tough to accomplish unless you have a good CRM system. In addition, CRM could have been used to identify common threads in client messages, which would have enabled advisors to respond en masse through bulk mailings, bulk email and their websites.

Perhaps most important, a good CRM system empowers advisors to respond quickly and proactively to changing circumstances. Rather than waiting for upset clients to call, a good CRM system allows you to contact clients and reassure them. For example, if you knew that 10% of your client base was prone to panic over market gyrations, you could create a "calm them first" group. Perhaps any market decline of 5% would trigger a reassuring letter or email to that group. For the remaining clients, who require a deeper drop to get worried, you might set a higher threshold before reaching out.

By the same token, when you are busy during a crisis, you have to prioritize outreach. With a pre-configured set of groups and a strong CRM system, you would be much better positioned to handle increased service demands on short notice.

As was the case last year, the overall outlook for CRM was mixed. Only 8% of respondents said that they do not use any CRM software at all, about the same number as last year. Equally troubling is the fact that 24% of respondents say they use Microsoft Outlook for CRM (versus 25% in 2008 and 35% in 2007); this despite the fact that we've been informing advisors for years now that Microsoft Outlook does not fit the true definition of CRM. Outlook can't track complex workflows, nor can it store industry-specific information.

The silver lining, if there is any, is that until this year no CRM product specifically targeting advisors, nor any general purpose CRM product for that matter, approached Outlook's market penetration. This year, Junxure, a CRM product developed by advisors for advisors, fell just a few votes short of MS Outlook, equaling its 24% share. The results for Advisor Assistant (3%); EZ Data (6%); Lotus Notes (3%); Microsoft CRM (3%); Redtail (6%); and Salesforce (4%) showed little if any change.

ACT! was the biggest loser, falling from 15% in 2008 to 11% in 2009. Others with declining numbers include ACT4 Advisors (4% vs. 6%) and ProTracker (2% vs. 4%). Other listed applications included E*Assist, IAS, Saleslogix and Upswing, but none garnered even a 1% share. E*Assist is new, so the relatively low response rate is understandable in its case.

The "other" answers represented 11% of responses, and the write-ins in this category were widely dispersed. We saw a smattering of familiar names among the write-ins, including the Bill Good System, Qube and Oracle CRM. One new name that caught our attention was Zoho CRM. Zoho offers three editions of their online CRM product: a free edition for up to three users; a professional edition that offers additional features for $12 per user per month and the top-of-the-line enterprise edition at $25 per user per month. In addition, Zoho offers a full line of online applications that include a word processor, spreadsheets, document management, Wiki, email, online repository and an online invoicing system. It will be interesting to see if this firm gains traction within the advisor community.

PLANNING SOFTWARE

There was some movement in the financial planning category this year. We immediately noticed that 19% of respondents said they aren't using financial planning software, versus only 11% last year. At first glance, this was surprising. Then we looked more carefully at the sample. Last year 84% of respondents said they offered comprehensive financial planning; this year, only 81% said they did. So, we have 81% of respondents who offer comprehensive financial planning and 81% who use financial planning software-sounds about right.

As was the case last year, MoneyGuidePro was the most popular single application with 21% of the votes, off a bit from last year's 23%. EISI's combined stable of financial planning products (Financial Profiles, NaviPlan Standard and NaviPlan Extended) grabbed a combined 25% share, also off a bit from last year. In fairness, more than a few respondents wrote in that they used a proprietary version of NaviPlan, such as the Ameriprise version, so EISI's numbers are probably somewhat understated. eMoney exhibited a significant jump to 9% from 5%, which might be attributable to a change in management, while MoneyTree and SunGard held their own at 11% and 8%, respectively.