Being distracted is no way to run a business.
And when you jump on every industry trends, you waste time chasing rather than getting things done.
Slow down and assess whether or not the new technology can compliment your existing infrastructure or not. Don’t follow what others are doing just because it’s the hottest thing now — it’s not sustainable.
One of the most common benefits our clients’ experience is helping them to focus on what’s most important to help grow their business. Whether they’re RIAs, broker-dealers, or asset managers we work with them to uncover the hidden roadblocks holding them back from reaching their full potential.
I was recently at the Riskalyze 2021 Fearless Investing Summit where I moderated a session called Experts Panel: The 2021 Advisor Toolkit.
One of the experts was Shannon Saccocia, the Chief Investment Officer at Boston Private Wealth, which is owned by Silicon Valley Bank. Boston Private has around $19 billion in assets under management with 60 advisors based primarily in Boston and California.
Shiny Object Syndrome
“The technology you use impresses no one. The experience you create with it is everything.”
– Sean Gerety, User Experience Manager, Home Depot
After sitting through thousands of demos and helping hundreds of wealth management firms to make decisions about which new software to choose, I’ve seen more than my share of cases of shiny object syndrome. It is a disease of distraction and it can affect organizations both large and small.
Shiny object syndrome can be more common at fast-growing advisory firms since they tend to be highly motivated and are always looking for new technology to give them a leg up on their competition.
RIAs should be wary of falling victim to shiny object syndrome during demos of new software, Saccocia explained. Watching an experienced salesperson put their product through its paces following a well-rehearsed script can be mesmerizing and result in your decision makers focusing on the wrong things.
Salespeople are salespeople for a reason, Saccocia noted. Their job is to overcome your objections and get you to buy their software. And if the salesperson is worth their salt, their new product will look a lot better than what you’re currently using.
This is where a little preparation can go a long way. Saccocia advised that firms should take stock of their current tech stack and pay attention to the number and depth of integrations between key applications. How will this shiny new software integrate with what you already have?
No company has an unlimited technology budget. When evaluating how new software will fit into your tech stack, pay careful attention to how it will enhance or detract from your client experience and advisor experience, Saccocia said. There’s no sense is adding costs unless it significantly enhances either of the two. (See The Jedi Masters of Client Experience)
Another aspect of acquiring new technology You don’t want to disrupt an existing process that’s working. but you also want to make sure that you’re thinking about staying on the cutting edge.
What’s the best way to avoid Shiny Object Syndrome? Don’t avoid it. Sometimes shiny objects can give you energy, spark new ideas, and help you discover new ways to engage with your clients. Just make sure you put boundaries around them so they don’t hijack your time, your business and your life.
Looking Past the Bells & Whistles
When demoing software, the vendor will often focus your attention on the features that are the most interactive or have the most interesting user experience (UX). These are the “bells and whistles” that can sometimes hide serious flaws in the application. Anyone evaluating technology for their firm must be able to see through these superficial aspects and drill down to the core of the system.
Expanding on the need to prepare for demos, Saccocia compared technology spending to investing in your company. Just as an advisor would conduct in-depth research before buying a particular security, so should you research your own company’s requirements before talking to vendors.
This research should include at least two or three of your firm’s key use cases, Saccocia recommended. These should be selected by the actual users of the application; advisors, admins and operations staff. Their perspective as stakeholders must be incorporated into the evaluation and selection processes.
Until you document and fully understand these processes end-to-end, you are flying blind when evaluating new software, in my opinion. It’s almost impossible to know if a particular platform can support your business if you’re hazy on the details of your key processes. Lack of research before selecting new software is the most common mistake we see with our wealth management clients.
You don’t need to have all of your stakeholders in the same room or on the same zoom call, but each one needs to be interviewed to get their input on how things are working and what the biggest pain points are in the current processes. Every client who we do this for is surprised by what we find!
The most productive demos are the ones where the client brings their list of processes, requirements and priorities for the vendor. The will enable them to customize the demo to hit your key points and ski-the ones that aren’t so important. Everyone saves time this way.
Don’t be afraid to stop the demo in the middle if the vendor is going off on a tangent or focusing on features that aren’t important to you or are already being provided by other software, Sacoccia advised. Don’t be shy! Better to interrupt and redirect the demo than waste time seeing something you don’t need or isn’t a priority.
Tech Stack Review Tips
When Silicon Valley Bank bought Boston Private Wealth, it was the third acquisition Saccocia had been through. This series of consolidations resulted in a significant amount of legacy data that they had to deal with. This legacy data combined with tech debt was slowly increasing their fixed costs over time.
They knew for several years that as they continue to grow their business, the underlying technology was going to be increasingly important to create the economies of scale that are necessary to maintain profitability.
The firm conducted an analysis of their infrastructure and realized that changing their core system would be a very time consuming and expensive process. Once they started looking at alternatives to stack on top of their core system, this gave them a starting point and allowed them to narrow down their choices, Saccocia explained.
Saccocia’s team relied on the Kitces Advisortech Map as a guide to the top vendors in each of the categories they were evaluating. Once they decided that the core software was staying, it made their RFP process a lot easier because they knew that they would only be looking at applications that were already integrated with it.
Another of their requirements was for advisors to be able to have the same view that their clients were seeing within their portal. They found that SS&C Black Diamond offered that capability in their client portal, which the vendor refers to as an “immersive digital hub”.
We’ve seen vendors expanding the functionality in their client portals beyond simple holdings and performance reports to include budgeting, held away assets included in net worth, and financial planning integration.
