Financial advisors looking to scale their firms and offer better client services need a technology edge. A J.P. Morgan Chase study of 1,000 asset managers finds clients who work with tech-savvy advisors see their fund operating costs drop 39% while their average dollar target for returns rise by 19%, according to a report[1].
Technology alone, however, is not enough. Advisors must consider how these tools and platforms can develop operational efficiency within their firm. This approach creates a two-fold solution. First, it improves back-office processes. Second, it addresses clients' concerns as the firm begins to scale.
For advisors and their firms, building operational efficiency requires investment in tools such as automation software and customer relationship management (CRM) platforms. From there, advisors can quickly and efficiently address many customer concerns through better marketing, sales, and improving the overall customer experience.
Automating and Streamlining Back Office Operations
Every advisor’s process is unique, but streamlining those operations is a must.
Advisory firms must identify back-office inefficiencies and determine which manual tasks can be automated. This approach frees up advisors' time, which can be better used to address clients' concerns and financial needs.
Automation makes these enterprise technology systems more efficient. These tools reduce physical paper and ensure that various software systems are optimized to produce the best results. This approach also allows advisors to focus on high-value, high-touch services while scaling their client base.
In a September 2021 report published in the Harvard Business Review[2], the authors wrote that enterprise technology upgrades help firms eliminate work by automating some processes.
The HBR report notes technologies like “robotic process automation (RPA), workflow, and intelligent document processing can free up workers and make each person much more effective at creating value.”
This is where technology investments, including investments in CRM, help speed up automation.
A June 2023 report from research and consulting firm Forrester[3] finds top-end CRM solutions specializing in financial services include packaged workflows, data models, and extensions to core systems to help manage customer experience while allowing for more marketing, sales, and services automation.
Focus on Client Experience
As advisors look to increase operational efficiency through automation, they also must consider how a new CRM system improves the client experience.
Advisors who consider operational efficiency from the client’s perspective can identify areas for improvement on the front end, according to a 2023 Financially Simple podcast episode[4]. The show pointed to the onboarding process as one area to review, noting that top-performing firms spent an average of 13 fewer annual hours to acquire a new client compared to other firms. If a firm acquires ten new clients each year, that could be a difference of 130 hours.
Forrester notes that top-end CRM solutions help advisors increase their back-office operations and enable firms to deliver personalized experiences to new and existing clients, as well as better onboarding, robust customer service, and marketing effectiveness, among other services.
According to a 2023 Financial Advisor story[5], CRM software can improve personalized touches to keep new clients. These systems can highlight clients and prospects nearing age 50, nudging the advisor to contact those clients with personalized messaging related to life-event activities such as catch-up contributions to their retirement plans. These offerings go beyond email with CRM platforms capable of making scripts for phone calls, PowerPoint presentations, and other messaging.
Advances in artificial intelligence and machine learning may also transform how advisors use automation and CRM technologies for lead generation, according to a June 2023 report from Financial Planning[6]. The report notes, however, that only some firms are aggressively leveraging data science to acquire new customers, as only 18% of respondents report that their firms are using AI for these purposes.
Harnessing AI, however, will allow users to mine their internal and external data to create new leads, give advisors new insights about their customer acquisition strategies, and conduct prospect outreach.
Consider Future Needs
CRM solutions can significantly increase back-office and front-office efficiencies for advisors.
However, as the firm grows, advisors may realize that they need additional capabilities to continue scaling. Financial advisory firm Carson Group[7] notes that advisors must think about how to acquire the right tech stack. The benefit of “plug-and-play” technology may work for firms without much in-house technical expertise. Before investing in new technology, advisors should explore how the new solution will provide the capabilities in the future as they need to expand their business.
A cloud-based solution that addresses the specific needs of wealth management firms by reducing the need for in-house IT expertise allows advisors to access CRM on desktop and mobile devices. This type of solution provides access to the latest updates and capabilities. These platforms can also access business apps from marketplaces such as Salesforce AppExchange.
For larger firms with IT talent, connecting to a robust enterprise cloud-based system allows flexibility to customize the technology – creating unique fields or building easy-to-install integrations to the underlying platform.
Improving the Bottom Line
To scale successfully, advisors need defined goals and the technology savvy to take advantage of the available tools and platforms. The ultimate goal is to build operational efficiency through automating processes and streamlining operations. This is why CRM platforms can help firms achieve operational efficiency by automating tasks such as sales, marketing, and onboarding of clients.
CRM also increases back- and front-office activity productivity, allows firms to harness newer AI technologies to optimize business results, and improves the advisor-client relationship with advanced collaboration tools.
Advisors interested in learning more about attracting next-generation clients using a robust CRM can do that with a purpose-built solution. At SS&C, we help firms build and implement custom CRM workflows that seek to enhance firm efficiency and improve client satisfaction. To learn more about the solutions that may best fit the unique needs of your wealth management firm, request a personal demo, call 800.727.0605 or email info@salentica.com.
[1] How RIAs and Financial Advisors Can Improve Their Operating Efficiencies, Wealthtender
[2] 6 Strategies to Help Your Company Weather Inflation, Harvard Business Review, Sept. 28, 2021
[3] Introducing The Financial Services CRM Landscape, Q2 2023, Forrester, June 14, 2023
[4] What Are the Key Drivers of Operational Efficiency In Your RIA?, Financially Simple, Aug. 8, 2023
[5] Tech Gets Personal, Financial Advisor, Feb. 1, 2023
[6] Unleashing automation: Attracting the next generation of investors, Financial Planning, June 27, 2023
[7] The Essential Guild to a Financial Advisor Tech Stack, Carson Group, Aug. 12, 2022
