Why Consolidating CRM Technology Matters In Technology
By Rosa Atkinson
You’ve been tasked with selecting and implementing technology for a growing RIA firm, encompassing a range of functional teams, a variety of dependencies and a growing book of clients. With that many moving parts, it can seem daunting to standardize everyone on a single technology platform.
Despite the challenge, consolidating to as few technology platforms as possible is a worthy goal. For RIAs, the advantages of cutting down on unnecessary deployments and simplifying operations far outweigh the scale of the task. Once you’ve made the move, the functional and financial benefits will add up over time.
Pre-consolidation: A troubling status quo
Too many RIAs are forced to deal with inadequate technology configurations. These scenarios take many different forms, but the throughline is that outdated, unsuitable or cobbled-together tech tools can’t support the diverse and complex needs of today’s growing advisory businesses.
Some examples of systems in need of a refresh include:
- Outdated legacy systems: Some organizations are dealing with solutions built in-house years or decades ago. These systems can be overly complicated and difficult to maintain. Since an out-of-date legacy system can’t meet the needs of a fast-paced modern financial firm, firms and advisors may be using their own “rogue” technologies to supplement the official platform.
- Expensive custom CRM builds: While using general CRM technology (not built for the financial sector) may seem like a good starting point, these projects to customize and implement it can spiral out of control. RIA firms may find themselves spending significantly more money for the initial custom build and implementation and then having to take on long-term costs for headcount and resources to maintain the technology.
- Patchwork technology: While rogue technology is a threat at any firm, sometimes this piecemeal strategy is simply the way things are done. When firms and advisors come to the table with their own technology tools, the firm loses its centralized view of what’s happening, along with an ability to control essential processes like governance.
While existing tech stacks may be causing problems for RIAs, a consolidated upgrade isn’t just about countering the negatives. There are true advantages that can only be gained with a well-designed centralized technology platform.
Motivating factors for consolidation
For reasons ranging from legal liabilities to day-to-day efficiency and everything in between, it pays to find a single platform that can work at all levels of a RIAs. The following are just a few of these advantages:
- Governance and compliance oversight: No RIA can thrive without a solid approach to compliance and data governance. Dealing with patchwork legacy technology means data may be in a variety of locations, with varied security protocols in place. Enforcing compliance standards on this scattered data is time-consuming and nerve-wracking.
- Consolidated systems built for use in the financial space provide peace of mind as well as efficiency, providing the workflows necessary to enforce compliance among a team of thousands.
- Analytics and intelligent data use: Having everyone on a consolidated technology platform offers dynamic opportunities for improved data use, at both individual and company-wide levels. This data can be integrated from the tools and applications that advisors use daily, providing them with key insights.
- RIAs have access to the same data-driven capabilities, enabling them to deliver better outcomes for their clients. Additionally, firm leadership can analyze trends across the advisory practice to make more informed, data-backed decisions.
- Support and tech management costs: Managing updates, customizations and tech support becomes more expensive and complex as companies add more technology tools. Legacy systems and rogue technology are especially bad from support perspectives. Dealing with patchwork or outdated systems can stretch teams thin.
- This is one budget line where a consolidated, purpose-built system can deliver immediate value, especially when the technology’s provider offers hands-on support. Processes that once demanded excess time and attention are now smoother, or even automatic.
- Integration with specialized tools: A CRM platform designed for RIAs, as capable and consolidated as it is, can’t do everything on its own. The best of these systems, however, offer effective, API-based integration with other systems.
- Integration with wealth management tools ensures the data flowing into the centralized platform is accurate, consistent and up to date. The role of CRM technology is to be the hub for the company’s operations. To optimize this role, it should integrate smoothly with all the others.
The sooner an organization gives up on the status quo, the faster it can achieve these advantages. Staying with a technology approach that is “good enough” or “not broken” means missing out on many potential benefits, ones that are especially valuable at scale.
Getting support for a centralized system
To complete the move to a new technology platform and bring your firm into a better era of digital operations, you’ll have to make sure the new solutions meet with widespread approval and adoption. After all, the idea behind a centralized system is that as many people should use it as possible.
Getting advisors on board can be a challenge if they’ve been burned before by tech tool deployments that didn’t work out. To reassure the team that this upgrade comes with tangible benefits, and that it’s the last one they’ll have to go through for the foreseeable future, it needs backing from leadership and firm-wide support.
Leadership should be behind new technology deployment from day one to build confidence in the new system. Institutional champions across levels and departments should also be brought in to ensure the deployment has plenty of momentum from the start.
Once the advantages of the new technology start to become clear — with analytics yielding better ways to deal with clients and everyday processes becoming simpler and more automated for advisors — barriers to adoption should fall. Especially in cases where the old system had major shortcomings, a new centralized platform can catch on with a wide swath of advisors.
Now is a great time to rethink your approach to technology — to see what that means for your organization, contact Practifi today.
