In the old days, before the iPhone, a financial advisory firms could get away without updating their technology every year, but not anymore. As consumers go mobile, they expect advisors to be up-to-the-minute with the latest technology. Almost everyone uses the web or mobile technology and expects to get info on a 24/7 basis. If an advisor isn't providing that service, they can be sure their competitors are.
But with all the tech tools out there, how do advisors sift through the clutter to determine which tech products and systems help financial advisors compete and which ones don't?
"Before you buy a new technology make sure the process is sound and that you're not automating something stupid," said David Edwards, president of Heron Wealth, an RIA in New York City. "If you have a bad operations set up or a bad marketing set up, bringing in technology won't make it better."
Is It Better, Faster or Cheaper?
Edwards makes a commitment to replace his technology every four years, and attends the Technology Tools for Today conference every February to keep up to date. He also has three criteria for purchasing new technology. First, is it better, faster and cheaper than something he already has. Second, does it integrate with his current system and current custody platform and financial planning platform, which are all tied together. The final criterion is security.
"We've had vendors that were not maintaining their platforms with current standards for cybersecurity, which is so important," said Edwards. "All the data that a bad guy needs is neatly packaged inside our systems. We need the highest level of encryption with duel factor authentication."