3 Tips for Advisors to Choose the Right Technology 

“We are stuck with technology when what we really want is just stuff that works.”
Douglas Adams, The Salmon of Doubt

Advisors are flooded with technology choices.

You can throw a dart at the map and hit a software application that has hundreds of satisfied users. But is it the right technology for your firm? And how do you know when it’s not?

That was one of the topics for a panel I moderated at this year’s AdviceTech.LIVE virtual conference. The panel was called What’s Next in AdviceTech? so I had a lot of leeway to direct the conversation in any direction I wanted.

Fortunately, I was given a killer group of panelists that had tremendous experience working with advisor technology, so it was a breeze pulling together the agenda.

AdviceTech.LIVE is about coming together, learning AND making a difference – no matter how big or small. From the sponsors to attendees, it was an opportunity to create momentum for change by investing in a cause that speaks directly to our industry.

This year’s AdviceTech.LIVE 2021 Benefactor Partner was the Foundation for Financial Planning (FFP), a nonprofit that each year brings pro bono financial guidance to thousands of families in need. 50% of all ticket sales will benefit FFP and its charitable programs.

One of our awesome panelists was Derek Notman, CFP, Founder at coaching firm Conneqtor and Founder at virtual RIA Intrepid Wealth Partners.  I pulled a few of Derek’s most insightful quotes from our discussion and wrapped some extra content around them for this blog post.  Please share this on your social media if you like it.

Click here and schedule a Discovery Session to find out how Ezra Group can help improve your client experience & grow revenue.

How to Choose the Right Technology

What’s important to know is not just what technology you have, but is it the right technology for your practice?
— Derek Notman

According to a survey by eMoney, when purchasing new technology, 72% of independent advisory firms said client experience was one of their three top considerations, while 65% cited productivity gains.  It’s not surprising that different advisory firms have different priorities when selecting core technology to run their practice.  There are no few one-size-fits-all tech stack that work for everyone.best technology for financial advisors

The wide variety of choices of software for advisors is both an opportunity and a challenge, Notman pointed out.  The challenge is not rush the process for selecting a new application or platform that will impact how your practice is run, he said. Too many advisors jump at the first demo they see or are wowed by the bells and whistles.

Taking a step back going a bit slower can save a lot of headaches that firms find themselves with when they sign up to replace their existing technology with something that looked good on the surface, but doesn’t actually meet the needs of their advisors, clients or operations staff.  But doing this preliminary groundwork is not natural for most business operators.

Shiny object syndrome is real. We see it all the time.

We recommend that our clients ask themselves a few key questions before starting the vendor selection process:

  • What are your pain points?
  • How would you prioritize them?
  • Have you spoken to your vendors about them?
  • Have you documented your key business processes?

I can’t tell you how many clients never bothered reaching out to their current vendors about their problems and never learned that there is a feature or an integration available they didn’t know about or a new version being released soon that could have alleviated their biggest issues.

They soon realize thatI didn’t need all of this new stuff and they’re stuck with a bigger problem than they had before. Understand the technology you currently have is just as important as how you go about selecting new technology. (See The Battle for the RIA Technology Integration Hub)

Taking a step back and going a little bit slower will result in better outcomes instead of just jumping in and buying a whole bunch of new stuff, Notman warned.  It’s only after signing the contract and installing the software that many firms realize that they’ve significantly increased their fixed costs without a corresponding increase in efficiency or scalability.  This is where documenting their business processes would have come in handy.  Never assume you know how things are working, especially before spending money for new software.

Even the largest broker-dealers we work with fail to consider the soft costs associated with a new application. These include time spent on demos, contract negotiations, internal discussions, implementation, training, running old and new systems in parallel, opportunity costs from lost business and additional vendor charges when you can’t shutdown the old system when the new vendor told you they’d be done, but they’re not. (See 13 Reasons Advisors Should Be Emperors of Their Technology Domains)

How technology shifted from differentiator to table stakes

Technology used to be a major differentiator for advisors, but over time it has shifted to become table stakes.

— Derek Notman

Like most industries, technology has radically changed how advisory firms operate, how they scale their business and how they interact with clients.  Back in the day, just having a website meant you were cutting edge.  Now there is software available to automate almost every advisor task and it’s darn near impossible to run an RIA without it.best technology for financial advisors

There are so many software applications available, that there’s a map updated every month by industry guru Michael Kitces and myself called the Kitces Financial Advisor Fintech Solutions Map. I suggest you check it out (as if you haven’t already).

At one point, it could have been argued that technology was the main value proposition of many advisors, according to Notman.  But over time, this normalized and shifted such that the core software applications, CRM, financial planning, portfolio management and client portal, went from differentiator to table stakes.

The move to fee-based advice also forced software to shift from supporting product sales to supporting more holistic advice such as goals-based and cash flow planning, generational wealth transfers and health and wellness. (See Merging Health & Wealth with Robert Kirk, InterGen Data)

But choosing the right technology is driven just as much by who your clients are as who you are as an advisor, Notman stated.  This means that you need to spend some time understanding how your clients interact with your technology, their pain points and their expectations.  We see too many firms simply barreling down a path towards a specific software solutions without fully comprehending their current environment.  I hate to use this cliché, but it’s a recipe for disaster. There, I said it.

The Human Element of Fintech

Technology is simply a medium that facilitates the human connection between advisors and our clients.

— Derek Notman

In The Innovator’s Dilemma, author Clayton Christensen explains that success becomes a barrier for companies to developing innovative ideas because they’re consumed with supporting their existing client base and internal bureaucracy.  We’ve seen this happen in our industry, Notman explains, as legacy fintech firms built some pretty cool stuff 20 years ago, but in his opinion, haven’t really evolve much since then.best technology for financial advisors

What they’re missing is the human element, according to Notman.

A recent survey from Financial Planning magazine reported that almost half of advisors believe that technology has helped them to strengthen their client relationships.  Customer Relationship Management (CRM) software often has the highest impact, but complimentary applications such as financial planning and portals have enhanced existing touch points and also created new ones. (See 5 Foolproof Tactics for a Successful CRM Implementation)

How can advisors leverage technology to facilitate better connections?, Notman asked.  Use of video to replace in meetings has exploded, but there are many other ways to implement video into your practice, he said.

One option is posting a video introduction on the practice website, which can help connect with prospective clients on a more personal level. Introductory videos don’t need to be long but they should be creative, according to marketing consultants Momentum Marketing. “Avoid sitting in front of a camera reading a short biography about yourself or your business. Instead, think of introduction videos like a video self-portrait. Don’t just tell your audience who you are, show them.”

Whiteboard Explainer Videos are another handy piece of content that are inexpensive to produce, but can be powerful engagement drivers. “Whiteboard videos have a raw, simplistic quality that makes the content seem more authentic”, as explained by Communication Cafts. “The minimal use of visuals in a deliberate, distinctive way attracts attention by virtue of stark imagery and being different from traditional online content.”

Here’s an example of a Whiteboard Video we did to promote one of our WealthTech Today podcast episodes.

A third idea for video is using a video messaging app like LoomScreencastify or Vidyard.  These apps allow you to send customized video messages, including screen recordings, that are then tracked so you know when the person viewed them. You can also add a button at the end of the video with a Call to Action link that takes them directly to your website.  Very handy!

The poor man’s version is just to record yourself on Zoom, Microsoft Teams, Webex or whatever video meeting app you use, export the video and upload to Box.com, Dropbox, OneDrive or whatever file sharing site you use and then send an email link.

Technology can act as a barrier between advisors and clients or it can be a connector, Notman pointed out.  Fintechs and mobile apps treat the human part of the client relationship as more of a commodity, which is an opportunity for advisors.  The pendulum is swinging back as technology is used to promote improved communication rather than as a way to avoid it, he said.  (See The Jedi Masters of Client Experience)

Which fintech companies get it?

This was quick-hitter question that I asked each panelist. We all agree that the human connection is important and we’ve all experienced software that doesn’t feel as though it was designed to be used by humans.

So, in your opinion, which vendors’ have developed a product or products that seem to “get it”?

Here’s Notman’s list (in alphabetic order):

Click here and schedule a Discovery Session to find out how Ezra Group can help improve your client experience & grow revenue.



The Wealth Tech Today blog is published by Craig Iskowitz, founder and CEO of Ezra Group, a boutique consulting firm that caters to banks, broker-dealers, RIA’s, asset managers and the leading vendors in the surrounding #fintech space. He can be reached at craig@ezragroupllc.com