Ask smarter questions, get smarter answers. This year's Financial Planning Tech Survey was the most scientifically accurate version the magazine has ever done - and it gave us new insights into advisors' changing relationship with the technology they use each day.

Overall, advisors seem more focused on technology issues than they were a few years ago, and their willingness to adopt relatively new technologies has increased. Only 4% of respondents told us that they plan to shrink their technology budgets in 2013, versus 36% who expect it to grow.

We found that many advisors are just starting to become involved with social media. Most are limiting themselves to LinkedIn, a quarter use Facebook, and many are only logging into social media infrequently. File-sharing services are gaining popularity among advisors, with DropBox, a leader in providing such services to consumers, a favorite of advisors as well - presumably due to ease of use and high name recognition.

We were also able to get new details this year. During the early years of the survey, we did not look much beyond the gross numbers - but new methods allow us to share intriguing observations based on the business models of the advisors surveyed. Do the tech decisions made by independent RIAs differ from those of dually registered advisors or advisors affiliated with a broker-dealer? If so, what might be the reason for some of these differences? We saw some big differences here in portfolio management software, mobile devices, CRM tools, and other areas.

One key finding was that independent RIAs are slightly more likely than average to shrink their tech budgets. This could be because they have already performed a recent upgrade, are relying more on their custodian for technology, or have already achieved some economies by moving to the cloud.

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A note about that methodology shift: To improve the survey finding's integrity and prevent any ballot box stuffing, FP sent out individual, single-use links to thousands of readers. The total number of responses was smaller than the past - although still the same size as major national surveys - but the accuracy of the data was far superior. The margin of error is /- 2.7%.

Among our findings: More than half (56%) reported their income source is a combination of fee and commission. Another large group (28%) were fee-only advisors. The remainder of the group broke down into commission-only, salaried employees and a few hourly workers. Almost all provided retirement services; other common services were asset management (82% of respondents), comprehensive financial planning (77%) and wealth management (75%); only 20%, by contrast, provided tax prep services.


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Some of the most surprising results this year came from a deeper dive into smartphone use patterns of our readers. Because some readers own one phone for business and one for personal use, we asked specifically about use of phones for business purposes.

Overall, 13% of readers told us they still use a BlackBerry. Independent RIAs are right on the average here, with independent affiliates and CPAs who also do planning falling noticeably below average. On the other hand, bank-affiliated advisors and employees of broker-dealers are at least twice as likely as the average advisor to own a BlackBerry. Insurance reps also indicated above-average BlackBerry usage. We've long suspected that these groups would be the last to give up their BlackBerrys, because many larger enterprises dictate the device that employees must use. It also confirms our suspicion that BlackBerry's share will fall further when these corporate contracts expire and the enterprises consider alternatives.

The big winner in this category, of course, is the iPhone. It does best among independent RIAs, with dually registered advisors and CPAs who do some planning tied for the second-strongest segments. Again, this makes sense - after all, these groups are the least constrained in their technology decisions. With the exception of the advisors at major companies mentioned above, Android seems to have a consistent market share of approximately 30% across the remaining users. And, as predicted, the Palm has virtually disappeared.

Perhaps the most surprising fact was that 20% of advisors say they still do not use a smartphone for business at all.

Advisors' attitudes about smartphone ROI were fascinating. Overall, 38% of advisors felt that their smartphones provided above-average ROI, but the range of responses was significant. At the high end, 44% of independent RIAs reported above-average ROI. That makes sense, because they were free to choose the devices they wanted, and they primarily chose iPhones and Android phones.

The shocker came from the CPA group, which registered only a 19% above-average ROI rating, the lowest of any group. Since they also were free to choose, and since they also chose primarily iPhones and Android phones, why the discrepancy? We have two theories: One is that the CPAs are simply tougher critics; they demand more from their purchases. The other (and perhaps more likely) explanation is that CPAs are not making full use of their phones' capabilities.

The big question mark for 2013 is the Windows 8 phone. Currently, Windows phones have only a 2% share overall, but our survey closed just prior to the release of Windows 8 phones. We think Windows 8 could change the fortunes of Windows phones in the advisor space for three reasons.

* We expect Windows phones to offer security that meets the demands of enterprises, which could mean that they become a viable alternative to BlackBerry devices.

* The early prototypes we have seen are very well designed from both a hardware and software point of view.

* Perhaps most important: Windows 8 phones fit nicely into the new Windows 8 ecosystem. Since the vast majority of advisors spend their time on Windows PCs and in Windows apps, the ability to seamlessly move from PC to tablet to phone may appeal to advisors.

We'll have to wait and see how this scenario plays out, but the potential is certainly there for a Windows phone to finally win over financial advisors.


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What about tablets? Half of all advisors now own a tablet - and of those, 81% own an iPad, 15% own an Android and 7% own a Windows tablet. The iPad was strongest among independent RIAs and weakest among insurance agent advisors. Android tablets were strongest among dually registered advisors and lowest among bank-affiliated advisors. Only 8% of advisors said they plan to buy a Windows 8 tablet over the next 12 months but, as of the survey's close, advisors had not yet seen a Windows 8 tablet, so those numbers might rise.

CPA advisors are twice as likely as the average advisor to purchase a Windows 8 tablet soon. We think that's because CPAs spend so much time in MS Excel, and Windows 8 tablets work natively with MS Excel.

Advisors gave tablets lower ROI scores across the board when compared with their phones. There could be a number of reasons for this. One is cost: In the case of smartphones, you're buying a phone anyway and, with a contract, the incremental cost of the premium phone may be perceived as acceptable. In the case of a tablet, you are not only buying another device, but in many cases you are buying another cellular data plan - so the investment itself is high.

We also think most advisors want to use their devices to interact with Microsoft Office apps, custodial apps or the industry-specific apps they use daily. Yet there are no Microsoft Office apps available for the iPad yet. Workarounds are available, but they are far from seamless. This may lower the ROI in the eyes of some. Industry-specific apps, meanwhile, have only been on the market for a relatively short time, and some offer only a limited set of functionality. As these apps get better, perceived ROI should rise.

As with smartphones, we will be watching closely in the months ahead to see if Windows 8 tablets can win over a larger share of the financial services market. We don't see Windows 8 overtaking the iPad any time soon, but we do believe the number of advisors owning Windows tablets could increase significantly by next year. In particular, the ability to work with native Office applications, store them to the Microsoft cloud and then access them later, from other devices, looks very appealing.


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Another interesting result was the varying perceptions of ROI with respect to CRM among the various user groups. When we asked independent RIAs, 36% said that they enjoyed an above-average return on their CRM investment, and another 51% said they got an average ROI. Only 16% complained of below-average results. The numbers for dually registered reps and independents affiliated with a B-D varied slightly, but not by much.

On the other hand, when we looked at CPAs, just 9% of respondents said that they received above-average ROI, 63% said they received average ROI, and a full 28% said that they received below-average ROI.

Why were their results so much poorer? One possibility: Of the groups mentioned above, the majority of CPA firms surveyed were managing $25 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?


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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.


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?


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.

Schwab's PortfolioCenter, on the other hand, led all competitors in the independent advisor niche, but it displayed weakness across most other categories. Advent AXYS, which had only a 3% share, also did relatively well with independent RIAs, posting a 7% share.

We find it noteworthy that many advisors do not use portfolio management software or services; 15% of independent RIAs said they did not use such a product, compared with 62% of CPAs.


Custodians and broker-dealers can be great facilitators of technological improvement for their advisors, but they can also be an impediment if they fail to take a proactive role. Virtually every executive at custodian and B-D firms seems to think his or her firm does a good job on the technology front, so it is always interesting to see if their advisor clients agree.

When it comes to custodial technology, it came as no surprise that TD Ameritrade had the most "very satisfied" advisors this year. TD Ameritrade's success with VEO Open Access, the program that integrates the TDA platform with many leading third-party software providers, has been a huge success. Schwab and Fidelity also scored well in advisor technology satisfaction. Some firms in the middle of the pack did well within a specific category: For example, the custodial technology results for Trade PMR were average overall, but with dually registered reps they had the highest percentage of very satisfied advisors - and by a substantial margin.

On the broker-dealer side, a firm that is often mentioned on the street as a leader in technology, Commonwealth Financial, had the most "very satisfied" advisors. Cambridge Investment Research also had a solid showing. The good news overall is that there are relatively few advisors who are "very unsatisfied" with their custodial or B-D technology. Just two firms, LPL (14.8%), and Ameriprise (10.7%), had "very unsatisfied" rankings in the double digits.

Integration, or lack thereof, remains a problem. Overall, only 10% of advisors are "very satisfied" with the integration among their various applications. That number drops to 7% for independent RIAs, indicating there is still significant work that needs to be done on the integration front.


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In the financial planning software category, MoneyGuidePro remains the top choice of respondents. It's strongest among independent RIAs, but also ranks or is tied for first across all categories except bank-affiliated advisors, where NaviPlan holds the top spot.

MoneyTree and NaviPlan were other popular financial planning software choices among independents. As has been true in the past, Zywave products (such as NaviPlan and Profiles) and SunGard show strength with dually registered advisors, advisors employed by a B-D and affiliated independents.

Overall, 69% of advisors said that they do not use rebalancing software. Although the use of rebalancing software has increased steadily over the last several years, adoption still seems far too low. We strongly suspected that ease of use, or lack thereof, was an impediment to growth. Yet only 19% of total respondents said rebalancing software presented above-average difficulty.

So what might be going on? We suspect that different groups are rebalancing differently, using different applications. When we looked more deeply, it turns out that independents and CPAs were using more sophisticated, location-aware, tax-sensitive rebalancing applications with much greater frequency than other groups. These more sophisticated programs have many benefits, and we believe the ROI of such programs is substantial and indisputable - but they are more difficult to learn and use.


Windows 7 usage was highest among independent RIAs at 66%, which indicates they are willing to invest in technology to stay competitive. Dually registered reps and CPAs were essentially tied at 65%. CPAs also log the highest Windows XP usage, at 46%.

From this we can conclude that our CPAs are frugal. They are buying new equipment, but they are not throwing out their old computers; they are repurposing them. Windows 7 usage was lowest, by a wide margin, among bank-affiliated reps, who still rely heavily on Windows XP. This suggests to us that they are not investing sufficiently in IT infrastructure. Windows XP was released in 2001 - an eternity in technology years. It also raises some security concerns, since OS security has changed significantly since then. We'd worry a little bit less about these bank-affiliated reps if they planned to upgrade to Windows 8 in the coming months, but they ranked dead last in that category as well, with only 4% saying they planned to upgrade to Windows 8 in the next year. (Of course, 71% of the group said they don't know or they are not sure, so there is still some hope.)

Overall, half of all respondents said they will take a wait-and-see attitude toward Windows 8 PCs, with 16% saying they plan to purchase one. Only 4% of bank advisors expect to purchase a Windows 8 PC, versus 22% of CPAs.

We attribute the initial lack of enthusiasm for Windows 8 to a number of factors. First, not all of the B-Ds, custodians and vendors are prepared for a new OS the day it launches. Second, many advisors have not been educated about the potential benefits of Windows 8 yet. Third, the new Windows 8 Start page can be intimidating the first time you see it. We have no hard evidence to support the notion that advisors will adopt Windows 8 more rapidly than the survey numbers indicate, but we think the new OS, combined with the attractiveness of Windows 8 tablets and phones, will win over advisors sooner rather than later.


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One new question this year focused on social media usage. LinkedIn was the most popular social media site by far; in fact, among bank-affiliated advisors, it was the only social site with a substantial following. LinkedIn is most heavily used by independent RIAs, probably because for many RIAs, the compliance process is more streamlined.

There are a number of reasons for LinkedIn's popularity. First, it is perceived primarily as a business site. It is designed for networking among professionals, and it can also be used for prospecting. There are many advisor-focused groups on LinkedIn that readers can subscribe to. In addition, LinkedIn can help advisors stay informed about conferences that may be of interest.

Although many advisors use social media in some business-related fashion, many do so infrequently. Only 30% use social media at least daily, while 36% use it once a month or less.


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About one-in-three advisors plan to purchase a tablet soon. It will be interesting to see if 80% stick with the iPad, or if a meaningful number decide to give the Windows 8 tablets a try. We suspect that Windows 8 tablets will attract a following within the advisor community, although adoption will vary greatly depending on the business model.

We also believe that Windows 8 will have a larger impact on the business sooner than the survey numbers indicate. Although only 16% of advisors said they plan to install Windows 8 in the next year, 47% told us that their next major technology purchase will be a PC. That number jumped to 68% in our CPA subgroup. We expect many of those new PCs to come with Windows 8 installed.

Most of the focus in the popular press has been on the new Windows 8 Start page, which some see as an impediment to adoption, but there are many benefits as well. Windows 8 is more secure than previous versions, and it boots faster. It is also more closely tied to the cloud, and plays well with Windows 8 tablets and phones. We think it is particularly well-suited to the needs of advisors. Furthermore, the upcoming version of Microsoft Office 2013 will not be compatible with Windows XP or Vista, so many advisors still using old operating systems will need to upgrade soon.

Although the custodial and B-D satisfaction numbers fall short of where some in the industry think they should be, relatively few advisors say they are "very unsatisfied" with the technology these firms provide. Hopefully for those advisors and those firms, there will be an upward trend next year.

The average advisor's technology is better than it was a few years ago, but there is still much work to be done. We sometimes question why adoption is so low for applications that are proven to deliver ROI, such as document management software and rebalancing software. The only logical conclusion is that it is a problem of perception. Too many advisors still view technology spending as an expense, as opposed to the investment in their business that it is.

Attitudes are changing, but they are changing slowly. As more advisors become aware that technology is a necessary investment that provides a good return over time, they will become more willing to invest more. Over time, this will lead to additional productivity gains and improved profitability. Barring a significant market decline, which tends to put the brakes on advisor spending, we expect 2013 to me another bright year for advisor technology.

Joel Bruckenstein is a Financial Planning editor-at-large and co- creator of the Technology Tools for Today newsletter and confer- ence series. He is also president of Global Financial Advisors in Mira- mar, Fla. For more info, visit

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