In a perfect world, advisors would purchase client relationship management, or CRM, software from any one of the well-known market leaders and — voila! — all of the data would be imported and the result would be a near flawless environment in which everything works beautifully.
It’s a pleasant fiction. Isn’t it? The reality is that CRMs are not perfect. The good news is that by focusing on four key areas, advisors can unlock value in their CRMs.
What advisors want from their CRM is reasonable: all of the data from the front and back offices to filter efficiently and effectively through it, allowing the program to function as the centralized hub for all the firm’s data analytics and workflow management.
When this fails to happen, frustration sets in. The clients I serve today are at different points on their CRM journeys. Some are just beginning the journey from paper to digital processes. Others, who are further along, are determined to have some of the best CRM software out there but are unwittingly underutilizing the software.
Our wealthtech management consulting firm sees four trends in the challenges advisors often face along the road.
1. Your CRM requires constant nurturing
When choosing a CRM, many advisors develop shiny object syndrome. They buy a fancy, top-tier CRM system, implement the tool and then sit back and wait for it to solve the business problem it was purchased to address.
Advisors who are serious about positioning the CRM as their firm’s data hub need to treat the technology like the complex entity that it is, one requiring constant attention from those operating it in every facet of the business. This is where the issue of adoption can really cause an advisor some grief if the buy-in isn’t there across departments and offices, and from entry-level associates up to senior level executives.
2. Bi-directional connectivity is a must-have
By definition, a hub of any business’ data needs to be able to host all relevant information in the same place. This means it’s essential for CRM systems to integrate seamlessly with the other tech providers responsible for managing various elements of that firm’s core functions, information and workflows. Part of the problem today is that many large fintech companies aim to be the equivalent of the app store for their advisors — the illusive one-stop shop. Because of that, they don’t offer bi-directional connectivity with other tech providers outside of their ecosystem.
For data to flow freely between all the technology providers firms use, bi-directional connectivity requires willing partnership and collaboration from both providers. Sooner or later, these big fintech players are going to have to accept the reality that financial advisors only want to enter a piece of information once, knowing that the data will filter into all other systems automatically. In the meantime, advisors should consider the bi-directional capacity of any new technology as a key factor in their decision on whether it will support their CRM strategy.
3. Top-down and cross-departmental buy-in is key to adoption
We have seen firms implement CRM either to drive operational efficiency in back-office workflows or to drive the firm’s sales and marketing efforts. Most advisor firms only do one; and herein lies the adoption challenge for CRM. Oftentimes CRMs are set up and managed by the operations team, but to be a truly effective technology for the firm, they need to be maintained firmwide so they can serve as both a record-keeping tool as well as a lead tracking and business development instrument.
For CRM to do the job that it is supposed to, it needs to be a tool that the entire firm embraces — you’re either all in or you’re all out. It requires buy-in from the CEO down to the most entry-level staff member, and from the compliance team over to the business development team. CRMs can’t provide the value they are meant to if only half the firm is taking the time to input the necessary data.
4. Simplify with straight-through processing to solve the client onboarding conundrum
The onboarding process is often the first real experience a new client has with your firm, and it can be a painful one. There is a lot of paperwork and administrative obligations involved as the industry moves away from paper-based experiences to more digital ones. Both advisors and their clients are looking for a straight-through digital experience.
CRM companies that have connected their tools to the APIs of the advisor’s custodian are making strides toward establishing onboarding processes that are streamlined and simplified and, unsurprisingly, are the ones also turning the heads of advisors. Eliminating the need to enter data in multiple places as clients move their assets over to your firm allows you to start managing them as soon as possible.
While those building the CRM continue to work toward achieving a UX as elegant and streamlined as that of the iPhone, advisors implementing CRM technology will yield the most benefit by integrating it into every layer of their business — fully committing to the maintenance and care of the data flowing into that system across every part of their organization’s processes. With full engagement from both those designing the CRM and the financial advisors using the software, I believe we can make the centralized data hub we have always hoped for a reality.
