How advisors going indie can assemble their digital toolbox

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When advisor Ryan Pine and his partners left Morgan Stanley to open an RIA in 2013, they had their work cut out for them. The team had to negotiate office space and figure out branding for the new enterprise.

But building a technology stack from top to bottom — Pine remembers that as one of his biggest challenges.

“We didn’t know anything, honestly,” Pine says. “When we went out on our own, we didn’t know what was left and what was right.”

Pine’s dilemma is one shared by advisors across the industry as they sift through a plethora of technology offerings to figure out what works for them — and their clients.

Assembling that digital toolbox has become a core service offering of aggregators, BDs, consultants and networks that help advisors go independent. While many industry experts agree on the core tools a new firm needs, there are differing philosophies on how to go about putting them together.

While Pine’s custodian, Charles Schwab, offered guidance, ultimately it came down to trial and error, he says. His firm, Genesee Capital Partners, started with Schwab’s portfolio management technology, but switched to Envestnet Tamarac after the first year. After the team realized that Salesforce just wasn’t working for them, they switched to Redtail.

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Now Genesee uses Advyzon, which offers both CRM and performance software, Pine says.

“We didn’t have a ton of time to focus on technology,” Pine says. “If I could do it all over again, having a suitable solution in place would make this whole thing so much easier, especially months into your firm being founded.”

For Cindy Halpern, COO of Advisory Services Network, it all begins with having a CRM and paperless onboarding software to ensure an easy, painless transition for clients. And with many advisors deciding to continue working from home, having a safe, secure and compliant cloud storage system is more important than ever, Halpern says.

Alternatively, Gary Bonner, COO of tru Independence, recommends advisors make portfolio management software the hub of the firm’s technology stack. Popular tools from Orion, BlackDiamond, Tamarac and Addepar offer core functions like billing, trading, rebalancing and performance reporting, and can integrate other tools like CRM, financial planning, investment research and a client portal like spokes on a wheel.

Bonner also recommends advisors use account aggregation technology to pull in held away accounts and give clients a holistic view of their holdings, which he calls the “holy grail” for advisors.

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“I think part of what they need to look at is what the end client is going to expect: Static reports or dynamic reporting?” Bonner says. “Performance reporting where clients can manipulate the data within a portal is significant, but some portals are nothing more than a site where [the advisor is] posting a PDF.”

After getting those core pieces together, advisors can benefit by keeping the rest of the technology stack simple, says Todd Resnick, president of One Seven, an RIA that helps advisors transition to independence. Today’s marketplace of independent advisor technology is so large that trying to choose among the myriad options can distract from running the business, Resnick says.

“You can basically spend your entire life researching software [in each] category and you’ll never get to the end of it,” he says, comparing an advisor going independent to new parents preparing for their first child. “Everyone tells you that you need product after product to make your life better, but at the end of the day, you just need milk and diapers.”

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Getting distracted by the latest and greatest tools has been one of the most challenging parts of going independent for Stephen Nelson, who recently left a large RIA and is in the process of opening his own firm, Birchwood Capital. The “shiny object syndrome” can result in paying for technology an advisor doesn’t end up needing, Nelson says.

“Thankfully it wasn’t a whole lot of money, but I signed up for an electronic signature service back in June. I paid for a year of it, but I haven’t used it and don’t plan on ever using it,” he says.

Advisors going independent should map out exactly what they want their firm and client experience to look like before investing in a specific technology, says Brad Sherman, who left Lincoln Financial Securities five years ago to launch Sherman Wealth Management. For example, Sherman wanted to offer a more qualitative approach to investing rather than rule-of-thumb labels like “conservative” or “aggressive,” so having a tool like Riskalyze was paramount.

Today, compliant texting and eSignature are also increasingly important, Sherman says.

“Technology should reduce friction and reduce the anxiety around financial planning and money,” he says.

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