Finding The Right Technology and Tools for Financial Advisors In 2023

Technology is a vital part of any business, and it’s more vital than ever today in the financial services industry. As a financial advisor, it’s important to keep current with the latest technology and tools to help you better serve your clients and manage your business efficiently. The right technology and tools can streamline your workflow, increase your productivity, and improve the accuracy of your financial advice. But choosing the right tools and systems and taking full advantage of their potential value can be challenging. Technology is always changing, and a tool or platform that might be right for one advisor might not be the best choice for your practice.

In this blog, we will discuss:

• Why having the right technology and tools is so important for financial advisors
• The current state of technology in the financial services industry
• Things to consider when choosing technology and tools
• The leading tools and technology available today
• Challenges and opportunities presented by technology for financial advisors

The Importance of Technology and Tools for Financial Advisors

Technology is so important in every industry today that any business that refuses to embrace technology is probably doomed. And even those that embrace technology but refuse to keep up with advancements are at a major competitive disadvantage. For every company lagging behind in technology, there are two or more companies using newer technology to maintain a competitive edge.

For financial advisors, the range of technology and tools available today to help streamline and improve every aspect of your business—from marketing to portfolio management—is broad and dynamic. Advisors who embrace and stay current with these resources have a huge advantage over competitors who don’t when it comes to things like lead generation, office efficiency, client services and retention, closing ratios, and overall business growth.

Financial advisors who embrace the latest tools and technology and keep pace with changes are well-positioned to create high-value relationships with clients, continually attract new clients, and maintain and manage long-term growth. Advisors who dismiss or fall behind on technology, are at a competitive disadvantage in all these areas and more.

Overview of the Current State of Technology for Financial Advisors

Once again, the range of tools and technology available to financial advisors today is broad and diverse, from point-of-sale software tools to video conferencing platforms and portfolio management software. We’ll take a closer look at some of these resources later in this blog. For now, be aware that tools and technology now exist designed to help you:

• Grow your brand and attract potential new clients online
• Conduct online prospecting seminars and workshops
• Compute financial formulas
• Organize and keep track of client data
• Improve office organization and efficiency
• Improve client services and client communications
• Track business metrics

Key Considerations When Choosing Technology and Tools

When it comes to choosing the right technology and tools for your business, there are many important factors to consider, including the following:

1. Cost – The right technology and tools will improve your bottom line in the long run; however, they sometimes come with a hefty up-front price tag. Most advisory firms that specialize in wealth management use at least three technology platforms: financial planning software, portfolio accounting software and customer relations management (CRM) software—the combined costs of which can add up quickly. For example, general financial planning software packages typically cost between $1,000 and $1,500 per advisor per year. That’s not bad, but now add to that the cost of portfolio accounting software. This is typically the costliest software expense for advisors, partly because you are often charged per account. If the cost per account is $60, that means if you have 70 clients with an average of three accounts each, your annual expense would be $12,600. Still, the benefits of this software solution often outweigh the costs. The size and needs of your business will ultimately play the biggest role in determining how much you should invest in new tools and technology.
2. Ease of Use – Some types of technology and tools for financial advisors can be quickly implemented and easily used; others are more complex and challenging. Before selecting a particular tool or platform for your practice, make sure that you and your team members will be able to comfortably master it and maximize its value without a long learning curve. Investing in technology that is too complex or cumbersome for your office can lead to operational bottlenecks that actually reduce productivity—which is the exact opposite of your goal. Having a reliable IT support person on your team, or under contract, is more important than ever in today’s business environment.
3. Integration with Existing Systems – In addition to making sure the tools and technology you choose can be easily used and maximized, you must also make sure they can be smoothly and effectively integrated with your existing systems. Introducing new tools and technology shouldn’t require having to overhaul your entire operation every time. Choose tools and technologies that align with, complement and ultimately enhance the systems and practices you already have in place.
4. Security and Privacy – Security and privacy are always a concern when discussing any kind of digital technology, but they are a particular concern in the financial services industry where you are dealing with sensitive, personal financial information. Make sure any new tool, service or platform you implement has a solid reputation and meets all regulatory requirements and standards around privacy and security.
5. Customer Support – Finally, make sure the tools and technologies you choose are backed by strong and reliable customer support policies and services. The last thing you want is to have questions or problems with a new tool or system and then no one is available to answer your questions or help solve your problems.

Top Technology and Tools for Financial Advisors in 2023

We’ve already briefly mentioned some of the most popular current technology and tools being used by financial advisors today. Now, let’s take a closer look at eight of the most popular:

1. Financial Planning Software – Financial planning software is an essential tool for any advisor. This software can help you create comprehensive financial plans for your clients by analyzing their current financial situation and recommending investment strategies. Some popular financial planning software includes eMoney Advisor, MoneyGuidePro and NaviPlan.
2. Client Relationship Management (CRM) Software – A good CRM system can help you manage your clients’ information and interactions. It can help you track client communication, manage appointments, and even automate some of your marketing efforts. Popular CRM software includes Salesforce, HubSpot, and Wealthbox.
3. Portfolio Management Tools – Portfolio management tools can help you manage your clients’ investment portfolios by providing real-time market data and analytics. Some popular portfolio management tools include Morningstar, AssetMark, and Black Diamond.
4. Robo Advisory Platforms – Robo-advisory platforms use algorithms to automatically manage investment portfolios for clients. They can help you provide cost-effective investment advice to clients with smaller portfolios. Some popular robo-advisory platforms include Betterment, Wealthfront, and Vanguard Personal Advisor Services.
5. Document Management Tools – Document management tools can help you securely store and organize client documents such as financial statements, tax documents, and estate planning documents. Some popular document management tools include Dropbox, Google Drive, and Box.
6. Digital Signature Tools – Digital Signature tools can help you save time and streamline your workflow by allowing clients to sign documents electronically. Some popular digital signature tools include DocuSign, Adobe Sign, and HelloSign.
7. Video Conferencing Tools – Video conferencing tools can help you meet with clients remotely, which is especially important in today’s virtual world. It can also allow you to host prospecting events such as seminars and workshops online—which has become an increasingly popular strategy for successful advisors since the coronavirus pandemic. Some popular video conferencing tools include Zoom, Microsoft Teams, and Google Meet.
8. Social Media Management Tools – Social media management tools can help you improve your social media platforms and maintain a strong and current social media presence. You can automate posts and even place a scheduler. You can even integrate your social automation tool with your website’s CMS, so your publications are posted as soon as you put them on your blog. Some social media management tools include Hootsuite, Zoho, Loomly and Sprout Social.

Challenges and Opportunities for Financial Advisors in 2023

Invariably, the development and ongoing advancement of any technology creates both opportunities and challenges. We’ve already discussed many of the potential opportunities created by new and emerging tools and technology for financial advisors—from attracting more and better leads through digital marketing to leveraging data analytics and AI tools to better serve existing clients.

On the flipside, here are two of the major challenges brought about by today’s new technology and tools for financial advisors:

Regulatory Changes and Compliance Requirements – In 2022, regulators introduced a host of investment management regulation changes related to emerging technology, outdated rules, and progressive topics. Most of the activity was led by the Securities and Exchange Commission (SEC), which approved more than 30 proposals to amend existing or create new regulations. In this environment, the services of a qualified compliance officer or compliance department will continue to be essential for all financial advisors.

Competition from Robo-Advisors – As a tool, robo-advisors can help your business, as noted above. But they also represent a potential new form of competition for traditional money management services. Because these online platforms can be used by everyday investors at relatively low costs, they give do-it-yourselfers an attractive new option. Like any type of technology, however, they also have their limitations, and it’s likely that most people (particularly those with more assets) will ultimately prefer working with a qualified professional.

Summary and Takeaways

Embracing and staying current with the latest tools and technology is important in any business, and it’s especially important today for financial advisors. In many ways, technology is redefining the way advisors do their jobs. Finding and using the right tools for your practice is essential to helping you serve your clients, attract new clients, maximize your productivity, and stay ahead of the competition.

New tools and technology exist today that can help you (among other things) grow your brand and attract potential new clients online; host online marketing events; improve portfolio management and client services; improve office organization and efficiency; streamline your business.

With so many options available, due diligence is important when choosing just the right tools and technology for your practice. Considerations should include cost, ease of use, integration with existing systems, security, and customer support.

Some of the most popular and potentially valuable new tools and technology available today for financial advisors include:

• Financial planning software
• CRM software
• Portfolio management tools
• Robo-advisory platforms
• Document management tools
• Digital signature tools
• Video conferencing tools
• Social media management tools

Along with the opportunities created by today’s new technology and tools, there are new challenges as well, including new regulatory requirements and increased competition from robo-advisors.

Financial advisors who thrive in this environment and in the years to come will be those who embrace these changes, identify and use the right tools and technology for their practice, and position themselves to capitalize on all the opportunities while effectively meeting all the challenges. If you want to learn more about these powerful tools for financial advisors and more, contact us today to begin the conversation.