For RIAs, finding the right technology can be critical. Technology doesn’t just save advisors time – it can transform their practice and set them up for the future. However, we have often seen RIAs make the mistake of bringing on technology that may be the right fit for the advisors but isn’t necessarily top-of-the-line for other employees at the firm.
Sourcing a technology suite that benefits client-facing employees, as well as operational and more technical employees, can help improve efficiency across the business and increase employee retention.
Understanding the Day-to-Day
Advisors who have started their own RIAs have to take on a lot of work to run their business. As they grow their businesses, they often hire new employees to tackle some of those responsibilities so they can spend more time directly serving their clients. We have seen RIAs encounter issues when they experience strong growth but only upgrade their client-facing technologies. Once advisors stop having their hands in every part of their business, it's not easy to recognize where issues may arise or where there is an opportunity to streamline technologies for other business functions.
At their core, RIAs are entrepreneurs. They are used to making significant decisions for their business and like to control the direction of their firm. The truth is that they can’t make every decision for the firm – they need input from their team. If an advisor isn’t handling trading, payroll, or billing, how will they make an informed decision about their trading, payroll, or billing technologies?
Advisors should listen to their employees who are tackling these functions every day to better understand what is working and what needs to be improved.
It takes time to evaluate technology providers – time that advisors often can’t spare. It’s our opinion that advisors shouldn’t shoulder all of the responsibility of finding and signing with a new provider on their own.
Advisors should start the technology search by meeting with their team to agree on the key features the firm needs from their next provider for both client-facing and operational workflows. We then recommend the team develops a shortlist of potential providers. From there, it’s time to divide and conquer.
Armed with a list of key features, consider assigning team members to handle the first couple of conversations with the prospective providers. These team members should help to narrow the list, easily removing any firm that doesn’t meet the criteria.
Once that list is trimmed down, advisors should have some assurance that they are only reviewing technologies that the team believes could be the right fit.
Adding technology that fits the needs of all employees, not just those in client-facing roles, can improve retention. If employees feel their needs are heard and the firm is willing to make changes to support those needs, that can create a much more positive working environment. Additionally, looping in these employees in the decision-making process brings valuable insights to the table and helps create a greater sense of collaboration. When individual employees can contribute to the direction and success of a company, the company's culture can grow stronger.
We encourage all RIAs to frequently reevaluate how their technology providers are serving every department of their business. The technology in this industry is constantly evolving, and seeing what alternatives are out there is a great way to determine if your current providers are the best fit.