Required Reading for Tech-Savvy Planners:
Latest Drucker-Bruckenstein book disappoints in some areas, but still worth the investment
book review by Bruce Colin, CFP®
The challenges faced by advisers in keeping up with technology are unfolding along two broad fronts.
The first is posed by the continual evolution of financial planning programs, portfolio management systems, and other industry-specific applications that frequently form the backbone of advisers’ offices on a day-to-day basis. On a much larger scale, however, we are witnessing the rapid adoption of technologies (such as social media, file sharing, and mobile computing) in the broader world whose implications for advisory firms are less clear.
Not surprisingly, advisers may at times feel as though they are in the middle of a burgeoning arms race involving the very technologies that, ironically, promise to make their offices more simple and efficient.
Enter David Drucker and Joel Bruckenstein, who for years have helped to shape technology discussions within the advisory community. Readers of the Journal of Financial Planning are likely to recognize their contributions as writers, speakers, and cofounders of the annual T3 technology conference.
With the January release of their newest book, Technology Tools for Today’s High-Margin Practice, they continue on the path initiated more than 10 years ago with the publication of its predecessor title, Virtual-Office Tools for a High-Margin Practice. Only this time they have turned over the reins to a number of contributing writers, and only the book’s introduction and epilogue are authored by Drucker and Bruckenstein, respectively.
Drucker begins his leg of the relay by noting that their first book’s recommendations were based on his and Bruckenstein’s own experiences as advisers, and even offers a brief review of how some of those early recommendations look after a decade of tremendous technological growth. As Drucker notes, that same decade has seen the emergence of technology experts serving the advisory community, and he and his co-author felt that their readers would be better served at this time through such experts’ contributions. Their decision is simultaneously a strength and weakness. On the one hand, readers will learn from a diverse group of contributing authors. On the other hand, Drucker and Bruckenstein’s voices as practitioners would have been welcome additions along the way, perhaps through sidebars, occasional question-and-answer formatting, or roundtable discussions with vendor representatives from competing technology firms.
The book’s first chapter, “Selecting the Right CRM System,” is written by Davis Janowski, technology reporter at InvestmentNews. The subject is a fitting place to begin, because CRM often is the hub of an adviser’s technology suite. As Drucker points out in the epilogue, CRM discussions 10 years ago revolved primarily around Microsoft Outlook, Goldmine, Junxure, and ProTracker. In today’s world, Outlook is not properly regarded as a CRM, and Junxure is the only one of the remaining three with significant market penetration.
Janowski begins his overview with Junxure, but also addresses now familiar names such as Redtail, Salesforce, and Microsoft Dynamics, and notes that there are at least 32 providers offering CRM products in the InvestmentNews tech directory.
Janowski paints a clear picture of the CRM landscape, including issues such as customization and integration with other technologies—both of which should factor heavily into advisers’ considerations. At the same time, it would have been helpful to see some side-by-side comparisons of various CRM programs’ capabilities, perhaps accompanied by screenshots of their layouts for common tasks or functions.
To a large degree, chapter four’s discussion of portfolio management software falls along the same lines. Mike Kelly, president and CEO of Back Office Support Service, provides a general outline of the functionality and role of portfolio management software, with cursory mention of familiar names such as Orion, Advent-Black Diamond, PortfolioCenter, Morningstar, and others. While thoughtful, his discussion lacks the sort of granular review that might help an adviser choose one program over another. As an example, he suggests that new advisers “get a high-level view of what portfolio management software can do,” and notes that it can be obtained from “vendor websites, discussion groups, professional organizations, industry conferences, and discussions with your peers.”
In fairness to both Janowski and Kelly, they each acknowledge that only so much can be accomplished within the boundaries of single chapters. Moreover, given the pace of technological change, in-depth reviews of CRM systems and portfolio management software would have a limited shelf life. Still, readers will likely come away wanting such depth, so both contributors will have eager audiences should they wish to continue their conversations over time.
Among the book’s remaining chapters, two in particular will probably garner the most adviser attention. The first, by Marie Swift, is titled “Managing Your Online Presence.” If your firm does not yet have a website, or your existing site has not been updated recently, she quickly ups the ante and proclaims that, “In today’s world, you don’t exist as a viable business unless you have a good website.” And if you do have a good website, she escalates things again by saying that a good website is no longer enough.
Swift encourages advisers to build a spider web of digital assets or outposts that might include blogs, LinkedIn profiles, Facebook business pages, and video postings. Although it is easy to become overwhelmed with the prospect of creating and maintaining a broad online presence, she shares links to resources advisers can explore, including 11 vendors who specialize in creating websites for financial advisers.
Bill Winterberg writes the next chapter of high interest when he tackles the subject of client portals and collaboration. (Journal readers will recognize Winterberg as a regular columnist and subject of a 10 Questions interview in the February 2013 issue.) Along with conventional portals that can be incorporated on a stand-alone basis or accessed as part of larger technology applications, he also explores the advent of file sharing services such as Dropbox that enjoy wide adoption outside of the advisory community.
One of the most potentially interesting ideas to emerge in the book comes in Bruckenstein’s epilogue as he gazes into the future and suggests that traditional quarterly reporting may give way to reporting that is tightly integrated with clients’ financial plans. He notes that at least one vendor may be up and running with such a system by now.
Tom Nally, president of TD Ameritrade Institutional, comments in an early chapter that “With technology, you’re never done. In our industry, if you stand still when it comes to technology, you’re going to get left behind.” For advisers interested in staying ahead of the technology curve, Drucker and Bruckenstein’s book should be regarded as required reading.
Bruce Colin, CFP®, is president of an advisory firm in Southern California. He may be reached at email@example.com.