There are few responsibilities that are more important in ensuring the success of a independent planning practice than making the technology choices that will power the firm. Spend too little, and you may find too much time consumed by creating financial plans or rebalancing client accounts. Spend too much, and you could find yourself resistant to upgrade to the next technology cycle. Make a poor choice, and you or your staff might come to hate your processes and procedures.
That's what makes our latest Tech Survey so useful - as either a buyer's guide or a detailed comparative tool to gauge what products and trends are hot, what's not, and where your firm stands versus your peers.
I asked Financial Planning Tech Tools columnist Joel Bruckenstein, who reports on the survey's results, what he thought were some of the most surprising findings. On a broad scale, he was struck by the acceleration of the race to the cloud. He also didn't expect that social media adoption would be strongest at the smallest firms. Indeed, those with less than $10 million in assets under management made greater use of every single social media platform we asked about.
Also of note, Bruckenstein says: the fact that financial planning software ranks No. 1 in ROI, yet many advisors are still not using it. Nearly 31% of respondents go without, even though many planning software packages are more user-friendly than ever.
I was struck by the low popularity of rebalancing software, although it might not be as surprising that the biggest independent firms were far more likely to use it than their smallest rivals.
Big picture, the firms most likely to increase tech spending next year have lower AUM totals, probably because practices this size have the scale to truly benefit from tech investments and have likely underinvested in the past. That's a plus for the broker-dealers, custodians and vendors who work with them.
We are always struck by how many advisors still use Microsoft Outlook as a CRM tool, though the total is noticeably smaller this year. Many advisors have finally realized that Outlook is no substitute for a real CRM system.
Our Tech Survey coverage features six predictions for 2014, including one on the power of Big Data. By 2015, I expect a leading trend will be advisors harnessing that power to benefit their firms and their clients.