Why were their results so much poorer? One possibility: Of the groups mentioned above, the majority of CPA firms surveyed were managing $25Ă¢â‚¬â€°million or less; by comparison, 49% of independent RIAs manage $50 million or more. We suspect that most of our CPA respondents are solo practitioners, and hence cannot take full advantage of many CRM features (workflow, analytics, etc.) that can be so valuable to firms of a larger size.
Moreover, our CPA respondents have not made really good CRM decisions. For instance, 43% of CPAs told us that they use Outlook as their CRM, versus 35% for the advisor population as a whole - and of course, Outlook is not CRM software.
Incredibly, another 39% of CPAs told us that they don't use any CRM software at all. These smaller CPA advisors would almost certainly benefit from a relatively inexpensive, easy-to-use cloud based CRM solution - yet only 3% use Redtail, and 3% of them use Wealth Advisor CRM. It is interesting to note that Wealth Advisor CRM only has a 1% total market share overall, but a 3% share among CPAs. Is it possible that the developers of Wealth Advisor CRM know what CPA advisors are looking for? Is the low price a factor among cost-conscious CPAs? Or are there other dynamics at work here?
CRM RANKINGS
Speaking of CRM software, no single provider of CRM software appears to do well across all business lines. Redtail, with a 14% overall share, does well with dually registered advisors (15%), affiliated independents (22%) and independent RIAs (15%) - but it lags with insurance reps. Salesforce also does well across all groups, although it did substantially better with bank-affiliated advisors and employees of B-Ds than its overall 8% share would suggest. This intuitively makes sense, because Salesforce is best suited to large organizations that can leverage its power and sophistication, and customize it to their needs.
The Salesforce market share among independent RIAs (9%) also appears to be on the rise - perhaps because a number of large RIA custodians have released their own customized versions of Salesforce that they are actively marketing to their advisors, as have a number of independent third-party providers. In fact, Salesforce appears to be lagging among only CPAs and affiliated independents, for whom it is probably too expensive and too powerful.
In contrast, Junxure shines primarily with independent RIA firms. Although its overall share is 6%, it is tied with Redtail at 15% for the lead among true CRM applications for independent RIAs (although 27% of independents say they use Outlook). Insurance agents exhibit the highest Outlook usage of any group, which means they are probably leaving a lot of productivity on the table.
Next year should be a very interesting one for Junxure, as well as for the competitive CRM landscape. Early in 2013, it should release Junxure Essentials, its long-anticipated cloud CRM application. A successful launch would not only strengthen Junxure's strong position in the independent RIA space, it might also open up opportunities for Junxure in the various B-D and bank channels - areas where the company has lagged.
WEB CONFERENCING
We found some other surprising results for ROI questions. When we asked about web-conferencing ROI, we expected to see very strong numbers because the entry-level cost of the equipment and service can be very low, and the time savings is attractive, as is the ability to reach clients and colleagues anywhere, at any time. Yet just 18% of respondents reported above-average ROI in this category, while 22% had below-average results.
We suspect that the problem here may be a lack of comfort with the technology. Some technologies, like Skype and FaceTime, were originally designed for consumers; as a result, they are great for videoconferencing. Other technologies, such as WebEx and GoToMeeting, have advanced business conferencing features and are capable of hosting large meetings, but they do require some training to use effectively.
We strongly suspect that, as advisors become more comfortable with the technology, web-conferencing ROI numbers will improve over time. The cost is low and the potential benefits are many. What's not to like?
PORTFOLIO MANAGEMENT
The variations across groups in use of portfolio management software and services were substantial. The one product that led the ranking, Morningstar Office, did relatively well across all groups, with the exception of CPAs. But Albridge, which ranked second overall, drew almost all of its strength from dually registered advisors and affiliated advisors; it had virtually no support among independent RIAs and CPAs.
