Financial Advisor Marketing & Technology

Marketing & Technology For Independent Financial Advisors

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Archive for July, 2008

Tell Vendors What You Think About Integration


Financial advisors for years have clamored for an all-in-one solution combining portfolio management, customer relationship management, and financial planning software into a single platform. Combining these three functions, which are essential to any advisory firm that wants to adhere to best industry practices, has been an elusive goal. Years ago, I branded the long-sought breakthrough application “The Silver Bullet,” evoking the legendary powers of the only weapon capable of killing a werewolf.

But the all-in-one application has proved elusive. So persnickety is the typical independent advisor (IA), he couldn’t work for anyone but himself. That’s why he chose to be an independent advisor. No single application incorporating portfolio management software (PMS), financial planning software (FPS), and customer relationship management (CRM) could ever be widely adopted. Uncompromising entrepreneurs don’t want a Veg-O-Matic—the kitchen appliance that sliced, diced, broiled, and boiled. A Swiss-Army-knife approach would be unacceptable.

Advisors want to choose each tool in their practice because they’re managing other people’s money. When your clients’ wealth is at risk, not to mention your livelihood and reputation, you understandably want the tools that work best for you. No wonder the typical advisor insists on individually picking his favorite PMS, CRM, and FPS applications. No wonder that advisors won’t settle for a CRM solution that’s “pretty good” even if it is integrated with a PMS system that’s great. You want things your way. You want technology tailored to you.

Getting that was basically impossible and the quest for the Silver Bullet didn’t get very far. Until now.

Web Services are now enabling advisor applications to talk with each other. These Web Services, which allow your PC to call data from a Web server—empower you to build your own Silver Bullet. If you purchase applications from vendors who are investing in Web Services, integration suddenly becomes easier. Your portfolio management application can feed data to your financial planning application. Your financial planning application can feed your website. And your website can feed your client relationship management software.

Just as the Veg-O-Matic gave way to blenders, juicers, and food processors, the one-size-fits-all Silver Bullet is giving way to new solutions using Web Services to create a new kind of Silver Bullet. eMoney Advisor, a financial planning application, uses a Web service to stream data from Cash Edge’s account aggregation application. Redtail Technology, a CRM system, uses a Web service to pull in contact data from Albridge Solutions. MoneyGuide Pro offers a Web service to pull in holdings data from BlackDiamond Reporting. The list could go on and on. Technology vendors of Web-based applications are typically able to build XML interfaces in 50 to 200 man-hours, which is not that big a commitment considering that it opens up each application to another’s user base.

For advisors, the Web Services provide significant improvement in efficiency and savings. They free advisory firms from re-keying client data into multiple applications, which saves labor and reduces errors. Service to clients is also improved because you no longer have to input all of the holdings every time you do analytics on a portfolio. If your analytics program, say Morningstar Principia, can take a Web Service from your portfolio accounting application or get it directly from your custodian, you are likely to run your analytics program more often.

A handful of technology vendors are leading the way by integrating with each other using Web Services. Please let me know which applications would you like to see integrated? Which integrations have been working well for you? Which have not worked well? Please comment. Vendors need to know what you’re thinking.

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