After the first surge in growth, a mature practice often becomes more profitable by becoming more efficient. Adopting new technology and making it genuinely useful is key; it will make your practice more efficient and is likely to attract more of the kind of clients you want most.

Advisors have always had a strained relationship with technology. A decade ago, advisors were slow to adopt email and create websites. Today, some are still balking at portfolio rebalancing tools and automated workflow technology that could make their practice more profitable.

What are some of the major technology challenges advisors are facing today? To upgrade their technology, they need to create a budget for that purpose, figure out how to integrate the software they choose and sign on to the power of the mobile revolution to transform their practice.



The lack of software integration is an impediment to productivity, particularly among independent RIA firms. While financial planning, portfolio management, and other software have all improved dramatically over the last 10 years, the ability of these programs to "talk" to one another and to communicate with custodial back offices has improved only recently. But the pace is speeding up, and advisors now have three ways to proceed: choosing a third party to do it all, handpicking services or piggybacking on a custodian.

* All-in-one. Years ago, dbCAMS, to cite one example, combined portfolio management and CRM functionality into a single offering. Today, firms like eMoney, EnvestNet, Interactive Advisory Software, Morningstar and Tamarac Advisor offer integrated, multifunctional solutions. The advantage of these providers is that you write one check, and there's a single point of sales and service.

The disadvantage is that a provider may not be strong across all applications. Some firms offer you the option of substituting an application with one from an independent party, but then you may not get the best integration.

Moreover, getting information from the custodian to the independent provider software historically has been a daily chore. Now, all of the providers above will manage and scrub the data, often at an additional charge.

* Best of breed. Advisors have often liked to handpick the best of breed in each area. Quality tools are now available to facilitate software integration. One such tool is Your Silver Bullet website, which tells you whether your preferred application integrates with other applications. For example, if you are using Laserfiche for document management and you are in the market for CRM software, the Your Silver Bullet website will inform you that Laserfiche integrates with Junxure and ProTracker.

* Custodian solutions. Custodians have been working hard to solve the integration problem, and there is no sign of a let up. Fidelity led the way with its WealthCentral platform, followed by Pershing, with NetX360. Schwab's Intelligent Integration comprises two initiatives: OneView Office, a turnkey solution, and OpenView Gateway, a modular, open architecture approach.

The first results of TD Ameritrade's open application program interface (API) initiative were on display in February at the custodian's annual conference. Software vendors were demonstrating beta versions of integrations developed using API for the first time. Other custodians, including Shareholders Service Group (SSG), Trust Company of America and Trade PMR also offer integrated solutions.

Custodians bring financial resources and technical expertise to the table. In addition, they hold out the promise of better integration with the custodial back office, reducing the need to enter data manually and making data more timely and accurate.



Smartphone and tablet PCs are already changing the way advisors practice, but we've only seen the tip of the iceberg. Advisors are moving away from the BlackBerry to the operating systems with the best selection of apps, and that often means the iPhone and Android. Gartner, a technology consulting firm, forecasts that worldwide revenue from mobile apps will triple this year to $15.1 billion.

To stay connected with clients and prospects, advisors will need to have their app on the devices their clients and prospects use. Custodians and software providers to advisors have taken notice. Many have already released iPhone and Android apps, and many more such apps are under development.

Tablet PCs, with their larger screen and more robust processing capabilities, should have an even larger impact on our business. When Financial Planning surveyed advisors last fall, 17% of respondents said they already had an iPad, and another 31% said they planned to buy one soon. Seven percent already owned a tablet other than an iPad, and another 9% plan to buy one soon.

The sale of non-iPad tablets, specifically Android tablets, likely will expand even more rapidly. At the recent Consumer Electronics Show in Las Vegas, a diverse set of manufacturers were showcasing a variety of Android tablets. By the time you read this, Motorola probably will have launched its much anticipated Xoom tablet powered by Android.

Over the next several months, manufacturers will be launching Android-powered systems with screens ranging from seven inches to 11 inches or larger. We expect many Android tablets to retail for significantly less than the iPad, which should speed adoption among both consumers and advisors alike.

What are the implications for your practice? Clients and prospects are already accessing your website using smartphones and tablets. If you have not checked to see what your website looks like on a smartphone or tablet from leading manufacturers, now is the time.

Some of you will need to make immediate changes. You also need to check with your vendors to find out if they are offering, or plan to offer, their own apps for your phone and tablet. A well designed app should give you quick and easy access to the data you'll most likely need when out of the office.

You might also want to determine what type of phones and tablets your clients are purchasing so that you can cater to their specific needs. It is not too early to consider providing your own iPad and Android apps for your clients. That means your icon sits prominently on their tablet and phone, and it will be where they go first for their financial needs.

Some firms are already replacing paper reports with reports on tablets at client meetings. These digital reports can contain more striking graphics and supplementary audio and visual content. They also allow you to explore alternatives interactively in real time.

As tablets proliferate, they could represent an ideal tool for communicating with clients. Not only can you send email to a client's tablet, you also can create custom newsletters, stream video commentary, conduct virtual meetings through video conferencing technology and much more.



Spending by advisory firms on technology varies greatly. The 2009 and 2010 Financial Planning Technology Surveys have indicated that roughly half of all advisory firms spend 5% or less of revenues on technology. Another 40% spend between 6% and 10% of revenues on technology.

Does this mean that the latter group always gets superior results to those that spend less? Not necessarily. The gross numbers only tell part of the story. It's not just how much you spend on technology, it's how you spend it.

According to the 2010 Financial Planning survey, 81% of respondents didn't have a written technology plan, and 94% didn't analyze the return on investment (ROI) of their technology purchases. If your firm is one of that majority, make it a priority to change.

According to a 2010 Schwab whitepaper, Integrating Technology into Your Practice, firms that report being early adapters and view technology as "central" to their practice or "critical to their business" say they benefit the most from their technology investment. These strategic spenders spend only 2.4% of their revenues on technology versus 5% for the top spenders in the survey, yet the strategic spenders generate twice the operating income.

This may sound counterintuitive, but it focuses on a basic point: If you want the most bang for your technology buck, think strategically, create a plan and measure results. Improved integration and new mobility tools hold out the promise of a much brighter future, but advisors must do their part.


Joel P. Bruckenstein, CFP, is an international expert in applied technology and co-producer of the annual T3 Technology Conference for financial advisors. For more, visit

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