Financial advisors are generally unhappy with financial planning technology.
According to a survey by Tiburon Strategic Advisors, almost all the planners called the current technology offerings merely acceptable or downright unsatisfactory.
What are the sources of this discontent? Chip Roame, Tiburon's managing partner, told Financial Planning that there are three major issues. "First," he said, "financial planning technology often is not integrated with one's' portfolio management system, which requires data to be re-keyed. This can and should be resolved through better integration."
Second, according to Roame, some financial advisors do comprehensive planning while others do modular planning. "Systems written one way or the other under-serve some financial advisors," he said. "This is more difficult to address." The third issue: some financial planning technologies are insurance sales tools in disguise or, in reality, more narrow investment planning tools, Roame asserted. "This can and should be solved."
The new research release, Financial Advisor Technology: Leading Edge Financial Advisors Technology Strategies, defines financial advisor technology as including client relationship management systems, financial planning technology, client profiling, risk assessment, asset allocation, portfolio construction technology, portfolio management, data download, and reconciliation technology.
Tiburon foresees increased spending on financial advisor technology, improved integration of various financial advisor technology components, and growth in client-facing collaborative technology, as well as the growing dominance of application service providers and cloud computing.
"Almost half of all financial advisors use no account aggregate software," the report notes, while "13% of financial advisors do not even use report generation software." As advisors add these systems, spending is likely to pick up.
Tiburon also reports that "application service provider model companies believe that their technology will not be adopted by large software companies like Oracle, due to a lack of nimbleness and other reasons."