A new survey of broker-dealers highlights the extent to which their firms rely on back-office technology to manage and improve advisor relationships, while at the same time revealing broad dissatisfaction with the solutions that firms have currently deployed.

Of the broker-dealers polled, 85% said that a customer relationship management (CRM) system is a critical element to maintaining communications and workflow between the back office and the advisors, according to SalesPage, the Kalamazoo, Mich.-based CRM provider that conducted the survey.

"SalesPage set out to better understand how broker-dealers are using CRM and to identify their challenges through administering this survey," Aric Faber, executive director of business development for SalesPage, said in a statement.

Of the respondents that said CRM systems are crucial to their firm's operations, 30% said they are using multiple systems or spreadsheets to manage back-office workflow, while 46% said they have consolidated into one system. Another 9% said they have been operating without a CRM system, but are actively in the market for one.

Of the 15% who said they don't need a CRM system, the majority were firms with fewer than 50 advisors, while larger practices tended to place more value on a CRM system to manage advisor relations, according to SalesPage.

But the firms polled indicated that they are not using CRM applications to their full effect. For instance, 91% of respondents said that the mechanisms for back-office support and service for advisors ranks from "moderately important" to "very important," but just 53% said that they use a CRM system to handle those processes.

That gap extended through other functions, with a larger number of firms identifying tasks such as lead generation and recruiting as moderately to very important than those that use CRM systems to manage those tasks.

Moreover, less than half of the respondents who said they use a CRM application to manage advisor relationships reported being happy with their system.

Given that low level of satisfaction, "it is clear there's a gap between what broker-dealers need and what's available in the solutions they currently use," according to the authors of the study.

"There appears to be a significant satisfaction gap -- a real disparity between those CRM features that are important to broker-dealers and those that they are managing with their current CRM systems," they wrote.

Behind advisor support and service, the most common back-office functions that broker-dealer firms handle through a CRM system included recruiting (47% of respondents), lead generation or marketing to prospective advisors (41%) and transition (41%).

The broker-dealer firms also tended not to monitor the efficacy of their CRM systems. For instance, just 37% said that they measure the efficiency and effectiveness of their advisor support process, while just 61% said they track the volume of service tickets processed each week. Then, only 30% said that they track the resolution time for their service tickets.

"The cumulative survey results indicate that a majority of broker-dealers who use a back-office CRM system aren't realizing as much value from their investment as they should expect," the authors of the report wrote. "Respondents' existing back-office CRM systems don't appear to meet broker-dealers' needs in terms of advisor service and support."

For its survey, conducted over the fourth quarter of 2011 and the first quarter of this year, SalesPage canvassed broker-dealer firms ranging in size from 10 advisors to more than 3,500.

Kenneth Corbin writes for Financial Planning.


Register or login for access to this item and much more

All Financial Planning content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access