Susan Glover Insight & Advice

Technology That is Wrong for Your Firm is a Costly Mistake – Tips on Making the Right Decision

Published on Monday, April 1, 2013

Technology That is Wrong for Your Firm is a Costly Mistake – Tips on Making the Right Decision

Reasons advisors may consider new technology:

  • Automate a manual process or streamline an existing process
  • Feel that needs are not being met with the current system
  • Believe that issues can only be resolved with new technology
  • Pressure from vendors about how their products will meet all of the firm’s needs and then some
  • Desire based on what other advisors are doing


Think, before you act, about what you are trying to accomplish with new technology.  Be prepared to understand what you need and why you need it.  The following tips will help you make the right decisions about your technology needs.

Understand the complexity of your process

Before evaluating software to streamline your process, understand how simple, or complex, your process is.  Consider the following example:

Your firm is considering re-balancing software to eliminate the manual efforts of managing portfolios.  Before calling on vendors, review your re-balancing process.  Are there firm wide procedures in place to manage the portfolios or does each advisor have his or her own re-balancing procedures? Do you maintain a fixed number of models or is each account/household considered its own model? Can you identify the five most complex portfolios you manage? How many “exception items” are there in your re-balancing process? 

Answers to questions like these will determine your business requirements and will ease the process of evaluating solutions.  This exercise can be applied to other processes and will also help in communicating your needs to vendors.

Evaluate whether you are fully utilizing your existing technology

Advisors believe it is easier to look at new software tools rather than understand how the current technology structure can best be utilized. The issue may not be the tools you have but a lack of understanding on how to incorporate them into your business.  The complexity of your tools may also play a role if you are not staffed properly to utilize them.

Determine if the source of your problem is related to technology 

Before you assume that your problem can be resolved with new technology, analyze the source of your problem. Your firm’s support structure consists not only of technology, but also relies on staff, custodians, outsourcing services, and work-flow processes. Your problem may be resolved by means other than new technology.

Listen to, but don’t act upon, what other advisors are doing

Those webinars and technology articles about what others are doing may sound convincing.  Before placing credence on what other advisors use, understand that their business model may not be the same as yours.  Advisors may give a high rating to a product based on features that are not applicable to your business.  Decisions must be based on your business needs and requirements (see above re-balancing example).  How other advisors rate technology tools should be considered only after you fully understand your own needs.

Technology decisions are business decisions

Advisors need to understand the role technology plays in the firm. Remember, your investment in technology will be a good decision only if it is aligned with your business needs and is properly integrated into your business structure.

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