When it comes to technology most advisory firms are stuck in the wrong decade (or century)

Yogi Berra, a baseball player-cum-philosopher, once famously quipped, “It’s tough to make predictions, especially about the future.” (Or, did he? More on this later.) The origin of the quote notwithstanding, it goes without saying that it is risky to make predictions as shown by this hilarious Forbes article.

But many (most?) advisory firms don’t have to worry about embarrassing themselves with silly predictions. That’s the least of their worries; they are not exactly on the cutting edge of technology, contemplating what the future might hold. To the contrary, when it comes to technology, they are stuck in the past, not quite able to move beyond the now primitive “information superhighway” period and into the post-smartphone, cloud-based, software-as-a-service, internet-of-things kind of world.

Everyone has moved on — except the wealth management industry

Such technology plateauing isn’t entirely surprising given that fully 48% of CFP® certificants are 50 or older, and 43% of advisors (CFP®s and non-CFP®s) are over 55. Come to think of it, today’s 50-year-olds didn’t start using email until they were 34 or so. When iPhone was first introduced in 2007, they were around 41. It’s not a stretch to say that they are not exactly digital natives.

Sadly, their blissful ignorance prevents them from seeing clearly the importance of, and the opportunity to, vastly enhance client experience, improve profitability and increase capacity through technology. Furthermore, many don’t seem to grasp the grave danger that their complacency might threaten their firms’ very ability to survive, let alone thrive. And all the missed opportunities are further exacerbated by the fact that most of these 50-and-over planners are owners, and by extension, decision makers. They are smart, they are hard-working and they are undoubtedly well-meaning. But, tech-savvy they ain’t.

If you happen to fall into this 50-and-over founder/owner group, chances are that a firm-wide adoption of technology isn’t happening because of you. Everyone must adopt to new software and process, you say. That is, everyone except you. But because you don’t (or are unwilling to) enthusiastically adopt or understand technology, your employees have to make exceptions for you, creating extra work for them and resulting in less than optimal use of technology. That’s not only frustrating for your employees but it’s also a waste of resources. (Perhaps this is why industry benchmarking studies show that elite firms tend to spend less on technology, yet enjoy more benefits from it.)

As for your clients (and prospects), they can make bank deposits with their phones but they have to wait 3 months to see how their investments fared. They have bought and sold houses or refinanced their home loans signing paperwork without leaving their computer, but they have to do it the old-fashioned way when they open an account with you. They have moved on from the traditional taxi service to ride share service, but they still can’t make an appointment with you on their smartphone. Their world hasn’t stood still, but somehow your firm seems to be stuck in the previous decade.


You might be asking the wrong questions

When evaluating technology, it’s important to ask the right questions, or you will end up with the wrong answers. The question should not be, “What is broken?” or “What are we trying to fix?” Those are the wrong questions. Often the answer will be, “Nothing is broken and we are not trying to fix anything.”

For example, when you use email instead of snail mail, it’s not because the traditional mailing system is broken. You can print out quarterly newsletters, stuff them into envelopes and mail them out. It’s a perfectly viable method. It’s clearly not broken. In fact, you might even be suspicious of email and ask, “Why would we email the newsletters? Doesn’t email have security issues?” “Don’t they get breached by hackers?” “United States Post Service is perfectly functional, why would we do anything different?” “If we want to send something instantaneously, let’s use fax instead. It’s much safer.”

Here are more examples. You might prefer to conduct research at a local library instead of using the internet. Or, you might prefer to go to a bank branch and withdraw cash via a human teller instead of using an ATM. The library isn’t broken and neither is a bank branch or human tellers. But there are clearly more convenient and faster ways to get things done.

Let’s remember also, when you first replaced your flip phone with a smartphone many moons ago, you did more than just upgrade to a newer version of your old phone. While your flip phone was more or less a wireless version of the traditional landline telephone, your new smartphone was something completely different. Unlike its predecessor, it was essentially a portable computer that let you take high quality pictures, share those pictures instantaneously, search for the best restaurants in your neighborhood, make dinner reservations, make deposits to your checking account, look up your brokerage account and make trades, read/watch the news, check the weather, listen to music, watch movies and shows, find and pay for a ride, and on and on. Oh, and it made calls too. The only thing your flip phone and your smartphone had in common was the word, “phone.”

Again, your flip phone was perfectly capable of making calls untethered to your landline. It wasn’t broken, and you weren’t trying to fix anything by upgrading to a smartphone.

So to repeat, your question should not be, “What’s broken?” or “What are we trying to fix?” Nothing is broken and you are not trying to fix anything.

Ask the right questions

So what is the right question when it comes to technology? It’s simply: “How does this technology transform my business and help us remain competitive?”

Just as a smartphone opened up a new world of possibilities that were both unimaginable and inaccessible before, technology upgrade must be approached with an open mind and an abundance of imagination. It requires a total paradigm shift. With today’s technology, you are not dealing with incremental improvements in features like a landline phone versus a wireless phone. Rather, these new technology upgrades open up entirely new, previously unimaginable ways of doing things with a whole new set of solutions to old problems.

With that in mind, some additional questions you may consider are:

“Does this technology significantly enhance client experience?”

“Does this technology significantly improve efficiency?”

“Does it allow us to do things we weren’t able to (or not possible to) do before?”

“Does it allow us to do things we do already, but significantly faster, more easily with fewer (or no) errors?”

“Does it allow us to compete effectively with giant firms by leveling the playing field (by democratizing the power structure, by making information available to all, by making processing power available to all, etc.)?”

As an aside, in addition to the above, it’s important to view technology as human capital as it replaces humans for certain tasks. Technology isn’t inexpensive, to be sure, but it does allow you to hire fewer people.

Advisor technology trends to watch

There are some technology trends driving business transformation that you might keep your eye on for your advisory firm (though admittedly, they are not exactly cutting-edge).

Account aggregation: It allows you and your clients to view their entire financial picture. The additional information will help you help them far more meaningfully than without such information. It also minimizes the need to manually gather and enter client data.

Online performance reporting: Instantaneous, near-real-time investment performance data with ability to mix and match seemingly unlimited combinations of benchmarks.

Integration: Various applications seamlessly “speak with one another” so that end users experience them as if using one piece of software. For example, when you update client’s address in your CRM, it will update your performance reporting software as well thereby eliminating multiple data entry.

Mobile: Ability for clients to access their accounts, financial plans, etc. Also, ability for our employees to work anywhere, any time.

Automated client onboarding: Seamless account opening, including risk profiling, IPS generation, account paperwork, ACAT, etc.

Business analytics: Ability for you to easily and quickly generate useful analytics and key performance indicators to manage your business better.


So, was the prediction quote correctly attributed to Yogi Berra? A quick, 5-second search led me to this article among others. See for yourself.

Thank you internet. Thank you technology.