Modern financial planning technology is dramatically different from what was available to the upstart profession at its inception more than 40 years ago. Gone are the days of creating copies of original documents with typewriters and carbon paper, writing down “while you were out” messages when colleagues miss phone calls and manually calculating rates of return with handheld financial calculators (or more likely by slide rule).
Today, the profession benefits from a tremendous amount of technology and innovation that has fundamentally changed the way you deliver financial planning services. It is now possible to operate your business using just a laptop and a mobile phone. Sophisticated financial planning and portfolio management software is available on-demand via the Internet, allowing you to simulate thousands of possible planning scenarios and rebalance client portfolios in a matter of minutes.
But all too often, financial planners fail to embrace innovations or simply dismiss new technology altogether. When introduced to a new device or product, some planners might respond, “That’s nice, but I did just fine building my firm over the last 20 years without such-and-such tool.”
Evidence continues to accumulate revealing how firms that make a conscious, consistent effort to embrace technology and make it part of their strategic planning process are widening the gap over their peers. Such evidence includes the 2011 InvestmentNews RIA Technology Study and Laserfiche’s 2011 report, ROI for RIAs.
Firms that leverage technology grow faster, serve more clients and enjoy higher profits. As a financial planner, you must commit to the continuous improvement of your firm’s services, productivity and capacity through the purposeful adoption of technology.
In Clients’ Shoes
As you think about where your firm stands with technology, let me ask you an important question: Given the technology you use today, would you be a client of your own firm?
Put yourself in the shoes of a prospective client and think about your firm’s technology and capabilities. You are a busy professional, balancing the commitments of work, family and community on a daily basis. Much of your communication is done today using your mobile phone, and in the last year or so, you may have added a tablet computer or ultra-portable laptop to your mobile tools. Much of the information you read is delivered electronically, with one or two exceptions for local news, national financial papers or magazines.
Because of the mobility and productivity gained from the technology you use, you have high expectations of the services, tools and providers you use today. Things around you should just work, but when something happens to the devices you depend on, you experience a major disruption to your day.
So, how do your firm’s services and deliverables stack up to your own expectations? Are you able to deliver a paperless experience to your clients using their tablets and laptops? Can you offer to conduct meetings either in person or by videoconference? And what about your clients’ stream of financial data? Do you leverage tools to aggregate cash-flow transactions and asset information in held-away retirement accounts, or do you continue to manually update this information?
While you are evaluating opportunities to enhance your firm’s technology, consider those products and services that not only will satisfy but also will attract clients who seek contemporary financial planning firms.
Now Is the Time
You are introduced to new technologies almost daily. As you discover something new, think of the ways the product, service or technique can be applied to your firm and how it may ultimately be used to benefit your clients. It is essential that you foster a culture of curiosity within your firm, where everyone is encouraged to come up with ways to apply such innovations and share those ideas accordingly.
Empower one person in your firm to champion efforts to integrate technology into your business practices. That person’s responsibilities should include performing due diligence, identifying clear business cases and outlining how to best introduce new technology into the firm. Avoid limiting the process to an annual or semi-annual exercise. Instead, allow for a continuous cycle of improvement for your firm’s practices and procedures.
Finally, take it upon yourself to create new services and experiences for clients that they may not necessarily know they want or need. Few people wanted anything to do with tablet computers before Apple created a device that was lightweight and powerful, yet didn’t require a 100-page manual or computer science degree to operate. When clients realize how significant a difference you make in their financial lives, how can they not want to tell all of their friends and family how terrific you are?
So, go ahead, see how far technology can take your firm. Never allow yourself to become complacent—take a few risks, seek continuous improvements and aspire to build the best financial planning firm you possibly can.
Bill Winterberg, CFP®, is a technology consultant to financial advisers and a columnist for the Journal of Financial Planning. His comments on technology and financial planning can be viewed on his blog at www.fppad.com. Follow him on Twitter @BillWinterberg.