For the independent financial services organization, regardless of size, selecting the right front office technology solutions is one of the biggest challenges. Not only does the scope of technological capacity move at a rapid pace, but with new programming techniques and platforms (Adobe Air, AJAX, web services, etc.), most struggle to keep current with what is available.

Most decisions boil down to buy it, build it or some hybrid of both. There have been volumes (literally) written on the processes of due diligence:

• Determining a need
• Identifying the scope
• Documenting requirements
• Mapping those requirements back to real existing (or newly proposed) processes – also known as “use cases”
• Validate budget and resources available
• Begin researching providers

In the end, as noted, it circles back to – can we buy it somewhere or do we need to build something (or at a minimum customize what we’ve bought).

One of my pet peeves has always been that latter notion of buying something and then customizing it. Unless you are a large corporate enterprise (and even then I have doubts), one should not bring that in as an option. It rarely is cost effective and your time to market (when you are using the new tool in production) is delayed significantly. Both of these facts I know very well from past experience.

As I have determined the scope of this commentary, I am not going into a treatise on my philosophy on build versus buy versus hybrid (another time). What I am going to recommend is that the first bullet on your list of needs when considering new front office technology is integration.

A Wealth Management Platform Scenario

Mr. Smith is a principal and advisor who manages an independent advisory firm with two advisor partners four support staff. The group has $180 million under management and maintain a product mix that includes two custodians as well as about one-third of their book held directly with fund companies and carriers. A portion of their revenue is generated by one of the partners in traditional life insurance, thus they also have a strong relationship with a brokerage general agency. This group averages about $2.4 million in revenues overall.

For the nine years they have been in business (the three partners were all breakaway brokers), the group has utilized primarily lightweight tools offered at little or no cost from their primary custodian. Having recently gone through a strategic review of their business, it was determined they needed to identify and standardize their approach to systems and processes that service prospects and customers.

They clearly defined how their operations processes broke down:

1. Prospecting and Centers of Influence
2. Client Services and relationship management
3. Financial Planning and Portfolio Analytics
4. Client access online
5. Reporting – both client and management level

In systems terms – they were looking at:

• CRM
• Financial Planning
• Portfolio Analytics
• Imaging
• Data Aggregation and Portfolio Reporting

The group very quickly determined they would outsource the full package of solutions based on two key factors, 1) No in house technology staff and no plans to invest in that direction and 2) Not wanting to get into the business of hosting infrastructure themselves.

The picture they began to see looked as shown, using exclusively Software as a Service providers (SaaS).

While outsourcing reduced the burden on the group for dealing with infrastructure such as telecom, hardware/software, servers and the like; they still faced a significant set of tasks.

During the previously noted strategic planning exercise, they had successfully documented their key processes surrounding the operations of the firm. However, what remained was the need to train on several new platforms, understand the features and functions and subsequently map those back to their workflow.

That being said, they developed a smart project plan, with reasonable time frames to sequentially learn the new systems and take them live one by one.

The Highlight of Integration

You can see from the diagram the benefits of integration when assembling a front office suite. Let’s look at how this fit into our group’s plan.

As they identified their clients at the core of this whole endeavor – they chose to start with CRM. They then went in the following order (having already had an imaging solution in place that would remain):

1. CRM
2. Financial Planning
3. Form Filling
4. Portfolio Analytics
5. Data Aggregation and Reporting
6. Portal-enabled web site

Starting with a database of clients, peers, centers of influence and prospects – this was converted for them into the CRM solution they elected to purchase. The successive solutions rolled out all had integration connectivity to either the CRM provider or the financial planning provider – thus – no additional conversions and no new data entry to syndicate that CRM data to other tools.

For Mr. Smith, the icing on the cake were the final two steps – adding the aggregation capabilities and the web portal.  Not only could he and his team now run their own reports on demand – but also shared that data with the CRM system (to the benefit of the rest of the tools) and to the web portal. The clients then clearly saw and reaped the benefits of the business investments their advisory firm had made.

Yes, Mr. Smith and his partners had shared some of the findings of the strategic planning sessions with their clients, including the decision to reinvest in the business through this new technology platform.

Pared down to business terms – this group made an overall first year investment of about $75,000 including time, expenses and vendors. The results include:

• A reduction of 20 hours weekly in data entry – equates to redistributing $20,000 in annual labor away from the keyboard and back to the customer
• Increased client satisfaction and retention by moving a step closer to them through online access to financial plans and reporting
• Eliminated the need for a new full time employee planned for the following year – a savings of approximately $40,000 in full
• Will have second year and ongoing costs of about $39,000

There are steps left for the group to take. For example, they are pursuing master extracts from these systems to build into their current backup process as well as continuing to master the overall solution with advanced skills.  What integration offered them is more time to commit to professional and service oriented activities and away from shuffling data from one system or file to the next.

Elizabeth MacBride covered three of the top investment advisors in the world, including Barron’s number one advisor (Ric Edelman) at RIABiz recently, revealing a common theme among successful practices. That is establishing scalable, repeatable processes and systems that empower advisors and staff to focus on clients. We believe it is the difference maker for teams that seek to grow their assets on a large scale while maintaining control of resources, expenses and supporting a high standard of service.

Extensive studies have been completed on this topic by the likes of Moss Adams and Tiburon Strategic Advisors, however, MacBride boils it down to the key techniques of these three who all have accumulated north of $4 billion in AUM. We could not agree more – having surveyed and worked with a number of practices and broker dealers across the spectrum in AUM size and client/account ratios.

In our view it broadly touches on these key areas:

• Knowing your business model – in our terms – understand your “wheelhouse” where you add the most value and expertise and focus on it. Don’t spread your offerings and resources thin to try to accommodate every prospective client
• Have a business plan for each component of your business – leadership responsibilities, staff assignments, technology and systems and marketing.
• Don’t try to keep up with your competitors – deliver your expert offerings with confidence and quality, provide high-touch service and stick to the tenets you forged to define your business.

Posted via email from Wealth Management Technology Musings

Allyson Lewis has put together an essential top 10 list on the Morningstar Advisor web site.

“One of the simplest ways to implement better business practices is to quit holding on to bad business practices. If you want to be more successful, then take a long hard look at your daily activities and make the decision to remove any bad habits that may be holding you back and hurting your business.”

We could not agree more. In working with our clients we frequently discover that they have not always made bad technology purchasing decisions (nor are they unintelligent folks) – they just have bad habits around process and workflow. This often generates responses in our discovery questionnaire like “[insert program name here] just does not work for us” or “we are probably not using more than 10% of this program”.

A painful component of changing a bad habit is that it is change, and it means learning something new. While we love to learn, I equate changing a habit to quitting smoking or skipping your morning coffee. Yes, that is not easy and may make some feel prone to anger. However, in fixing bad habits, we also create new positive outcomes, both intangible (I feel better about handling these tasks) and tangible (we are printing less paper and this now only takes 15 minutes).

Read the article by Ms. Lewis here.

What has long been called “word of mouth marketing” has re-emerged as a very profitable mechanism in today’s social world. In a new article exploring the value of turning “social capital into economic capital”, the writers at Knowledge@Wharton have taken an in-depth look at today’s referral program. It is certainly understood in financial services that referrals are a core component of building the business – and this also translates to our neighborhood small businesses, and for that matter, our business here at QuonWarrene.

As they smartly opened the article with:

“If your hair stylist gave you $10 every time you sent one of your friends her way, you might be more tempted to tell all of your buddies what a fabulous stylist she was — or you might even try to make new friends to refer.”

In our view (not unique we would assume) by making doing business easy and clear, delivering what we state we will provide with premier customer service – it is not a challenge to discuss referral business with our clients. Equally compelling in today’s socially interconnected world – does this translate to social media – enabling you to leverage these satisfied client relationships to extend to their friends & followers on Facebook, LinkedIn and Twitter?

Does the referral tweet, Facebook post or LinkedIn InMail carry as much (or more) weight than the traditional word of mouth? We believe it is at minimum equally as important as our offline efforts to connect with clients and their peers. Thus we maintain a presence (this blog) online, as well as a LinkedIn and Twitter.

Read more to review results of a study of a referral program at a German bank – assessing if customers won through the referral process can be more profitable and more meaningful relationships. While the piece does not span into social media in detail – the analysis of the study is compelling and most certainly some financial institution will be (or is) exploring this now from a social networking perspective.

Our biggest complaint with managing schedules has long been the hassle of coordinating meetings – thinking of time zones, availability and the constant back and forth of confirming date and time slots. Neal and I quickly became fans of Tungle.me when we deployed Google Apps Premier for Business for our organization.

Tungle syncs to the Google calendar(s) of your choice and provides a public online view into your availability. No private information is shared – the service simply displays time slots you have deemed as open to others scheduling time to meet with you. In the multiple attendee meeting scenario – you can propose several date and time slots and distribute those to all prospective attendees. Tungle juggles everyone’s response and tallies it for you to see which slot(s) work best and books them.

Earlier this month Tungle also released its LinkedIn integration, enabling users to see the LinkedIn details for all attendees to your meetings who have LinkedIn profiles (very cool).

Based on its open architecture with sync – you can be using Google Calendar – or offline using Apple iCal or Microsoft Outlook and keep your calendar current. While the iPhone app is handy for the throngs of iPhone users – we are patiently awaiting a release of an Android app for our Nexus One phones (we chose those for the convenience of using with Google Apps for our business).

See an introductory Tungle video here from their YouTube profile.

The Forrester Blog For Business Process & Applications Professionals

This is a critical intersection in CRM – expanding the communications component, both incoming and outgoing.