Published September 30, 2021
We often hear from clients that one of the allures of becoming an independent investment advisor is the freedom to build your business the way you want to, without fighting through the bureaucracy one would encounter with a broker-dealer.
However, you may want to curb your enthusiasm before embarking on your journey to create your technology stack. A technology stack, sometimes called a solutions stack, is a combination of front-end tools, back-end tools, databases, and/or frameworks which are often connected via APIs (Application Programming Interface software). Depending on the level of complexity, and the degree to which custom APIs may be needed, this can be a time-consuming and labor-intensive task. Many advisors who have gone independent have found identifying and evaluating technology options can ultimately become a daunting experience.
“Technology companies–mostly software providers–looking to do business with wealth managers, have put themselves in a predicament. They sought to build the most sophisticated products and services useful to every firm. But what they built is so complex, too few wealth managers want to use them.”
- RIAintel.com; Feb. 6, 2020
To be all things to all advisors, many technology providers have become their own worst enemies. What started as a noble effort to address advisors' primary concerns and needs regarding technology can become a cautionary tale in which trying to please everyone ultimately pleases no one. For advisors, the exercise of assessing and selecting programs can become a time thief, as they weave their way through a limitless array of features they may never need or use.
Houston, we have a [complexity] problem. Will you end up paying for features you never need to use?
According to a 2019 study by research and consulting firm Cerulli Associates...
“40% of advisor-managed assets are [under the control of] medium technology users, meaning the practices do not use technology extensively and could be better serviced by strategic partners. [And] The biggest hurdle the majority of practices (68%) faced was a lack of time to learn and implement technology.” - RIAintel.com; Feb. 6, 2020
Let’s face it. Staying up on new technologies and using them to their full capabilities is a challenge we all face daily. And while technology can be an investment advisor’s best friend, that relationship only works if the advisor understands how to use and optimize the software. Unfortunately, with advisors focused on managing existing client relationships, that often leaves minimal time to invest in the necessary training for new technology tools.
Do you and your staff have the ability to devote the necessary time to understand the nuance of each technology within your stack?
“In the recent 2020 Fidelity Financial Advisor Community COVID Series - Technology Study of more than 300 advisors, more than half of the respondents reported working with at least 6 third-party fintech firms, and 94% of the respondents felt like the number of technology providers they worked with will increase or remain the same over the next five years.” - Financialadvisor.com; September 2020
Everyone already has trouble juggling their logins and passwords for Netflix and Uber and Postmates. Add on top of that all the passwords and portals you use professionally. Instead of juggling between browsers and keying your username into the handful of siloed technologies you need each day, find a platform that consolidates multiple functions in one portal. A Turnkey Asset Management Platform (TAMP) can encompass CRM, billing, aggregation, reporting – and more – in one place. That means fewer logins, but also more integration since each facet of your operation is connected and sharing the same data.
Integration is a huge part of determining the effectiveness of your tech stack. Do you have someone in your practice who can optimize the integrations among your tax technology, compliance software, client relationship management platform, and financial planning tools?
A Simpler Alternative?
A few of the premier TAMPs have worked incredibly hard to help solve many of these challenges for advisors who would like to select their technologies personally, but may not have the bandwidth or knowledge to do so. Some providers have formed alliances with other tech providers to provide single-solution options that hopefully meet 90% or more of your tech requirements.
GeoWealth, however, recognized the importance of simplifying the technology decision for investment advisors and chose to build its platform from the ground up, with its easy-to-use technologies that integrate across every aspect of your business. So, whether you have needs for document management, generating proposals, performance reporting, or creating customized portfolios for your clients, GeoWealth’s platform may just save you from the anxieties and headaches you initially thought would be such a fun part of building our new practice. You can run your full practice on GeoWealth’s platform, with all of your key functions available through one login, featuring data-rich displays and fully connected functionality baked in.
To learn more about how GeoWealth technologies can accelerate the growth of your practice, contact us today to schedule a live demo and see our platform in action.