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3 Questions to Ask Before Your Next FinTech Purchase

By gavin spitzner // wealth consulting partners, llc
Guest Contributor

The right financial technology investment can be a huge boon for advisory firms, helping streamline internal processes, increase productivity and improve the client experience. On the other hand, the wrong choice could add unnecessary complexity to your tech stack, silo off important client information and increase administrative work.

It’s important that firms carefully consider every new FinTech investment before making a decision, assessing what features they absolutely need, what each platform can deliver and how solutions will integrate with the existing tech stack and related processes. To help you choose the right technology, here are some key items to have on your checklist during the search process:

1. Does it simplify work?

A financial advisor’s job is anything but easy, and the last thing they need is to get bogged down in extra tasks or struggle with complicated processes. Any new technology purchase should make their lives easier, streamline processes and help them do their job better.

If you look at the most successful advisory firms, they typically share this one thing in common: They have all embraced more specialized roles within their organizations as they’ve grown and increased their revenue. Everyone has a specific job to do, and these firms break up tasks across the front, back and middle office, so it’s crystal clear who is responsible for what. 

FinTech should accommodate those specializations, providing transparency across the organization and keeping everyone on the same page. Creating a single pane of glass that covers different processes like prospecting, onboarding and client management clears up any confusion about where things stand. At the start of every workday, team members know precisely what they have on their plates and the tasks they personally need to accomplish.

Firms need to use platforms designed specifically with wealth management in mind so they account for processes and tasks that are routinely managed in this industry. Broader technology solutions that are intended for more general use might not factor in the day-to-day realities of advisory firms, making it difficult to really get your money’s worth out of them.

2. Does it increase productivity?

One of the byproducts of simplifying workflows is advisors suddenly have a lot more time to spend on the work that actually generates revenue for firms. If technology can help cut unnecessary work, automate processes and assign tasks to the right people, firms will see their productivity skyrocket. As Wealth Consulting Partners Founder and President Gavin Spitzner noted, there’s just more time to spend on the work that really matters.

“The number one complaint I hear from firms, especially larger firms, is that too much time is wasted on what I call ‘administrivia’ — getting accounts onboarded, compliance reviews, etc.,” Spitzner explained. “You have to have the technology to take care of a lot of that work.”

Take the client onboarding process, for instance. There are a lot of steps to go through — even more so if you include prospecting and ongoing account management tasks. Advisors and other stakeholders should know exactly what they need to do to bring a new client into the fold. Those tasks might include:

  • Setting up a client account in your customer relationship management (CRM) system.
  • Transferring information gathered during the prospecting and sales processes to your CRM.
  • Sending out a welcome message and emailing introductory information to the client.
  • Creating a preliminary financial strategy.
  • Scheduling an initial call or appointment to touch base with their assigned advisor.

With the right platform, firms can automate many of those steps so advisors don’t have to worry about them. CRM and business management platforms with built-in automation tools can stay up to date with the latest client information, send out calendar notifications about upcoming appointments and email clients about the latest updates to their financial plans. That just leaves the strategic work of mapping out a financial strategy that fits the client’s needs.

3. Does it improve the client experience?

When advisory firms have the time and resources to really understand what clients want and deliver on those needs, they’re able to keep clients happy. Unfortunately, many firms struggle to provide that level of freedom and flexibility. According to Kitces Research, the average financial advisor only spends roughly half of their time doing work that directly impacts their clients.

We’ve already discussed how business management platforms free up time for advisors, but there are other ways that FinTech supports a better client experience. You have to look at the entire client journey and spot opportunities to improve things. 

For instance, prospective clients might want to get a taste of wealth management and financial planning services before signing on the dotted line. Using portfolio analytics tools, firms can calculate risk scores across different holdings and show those prospects their underlying financial risks. Not only is this “freemium” approach a good sales technique, but it can start the relationship off on the right foot by giving clients a valuable service at no cost.

Digital communication platforms are another great way to create a better client experience. Video conferencing tools help advisors stay in constant contact with clients and check in on their wealth management plan. Even if advisors can’t meet in person, video calls let them put in some much-appreciated face time with their clients.

Every FinTech purchase should serve the broader client experience, whether directly or indirectly. End-to-end solutions like business management platforms enhance the client experience from multiple angles. They free up advisors to spend more time on accounts, streamline client-facing processes such as onboarding new accounts and simplify CRM updates so client information is always accurate. Those are the kinds of benefits advisory firms should look for in a new tech purchase.

A final note…

Try to avoid getting too attached to any particular FinTech solution. If you become convinced that some shiny new platform is going to solve all of your problems, then you might overlook glaring problems or missing features. Make sure every FinTech purchase delivers the features you need to get the most value out of those investments.

Any new FinTech purchase can be a major investment for firms, so it’s important to take the time to thoroughly vet each solution and ensure that it’s worth the upfront cost. By answering the three questions listed here, you can focus your search on technologies and platforms that benefit your firm, your staff and your clients. With the right FinTech solution, everyone wins.

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Gavin Spitzner

President, Wealth Consulting Partners, LLC

Gavin has over 25 years of experience helping banks, RIAs, broker dealers and their advisors overcome complex obstacles standing in the way of accelerated, profitable growth. Operating at the intersection of business strategy, the fintech landscape and execution, Gavin has helped dozens of organizations launch or enhance wealth management platform solutions leveraging innovative technologies and processes designed to improve business performance and enhance client experiences. Gavin’s consulting firm Wealth Consulting Partners, LLC helps wealth management organizations and their advisors harness technologies, data and augmented client engagement techniques to improve revenue growth.

Prior to consulting, Gavin was Senior Vice President of Business Development for Envestnet and before that, Prudential Investments.

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