At the recent Technology Tools for Today (T3) conference, a forum to share advisor-focused technology trends and best practices, the hottest topic was financial-oriented client relationship management (CRM) systems.  CRM holds the promise of enabling much greater advisor efficiency, better collaboration across teams, and improved client service.  Until recently, however, CRM solutions have suffered from being too generic and lacking the financial data and advisor-specific business processes to really improve an independent practice.  As advisors shared ideas and implementation stories at T3, a few recurring themes emerged that advisors looking at CRM technology should keep in mind.

First, CRM is as much a process as a solution.  No CRM solution can help make a task, workflow or process more efficient if you haven’t defined it first.  If you don’t already have a model for how your replicable tasks should be handled, such as new account procedures, how financial plans are developed and monitored, or all the tasks that have to be delegated when a client changes marital status, then a CRM isn’t going to magically help make you more productive.  It’s also imperative that you RELY on the CRM system to do its job, meaning everyone in the firm must use it without exception. One person still relying on the post-it note system for task monitoring and communication can undermine the entire team, since data and process steps will be lost.  At T3 we heard advisors say things like “If it isn’t in the CRM system, it HASN’T HAPPENED.”

When selecting the right CRM system, financial advisors have to consider a number of technical features to determine what is right for them. The main requirement is that the CRM system has to be the primary repository for critical client data, including asset details, income information, financial goals, and, in general, all aspects of what it takes to “know” your client and offer them advice. There are a myriad of tools that claim to be for advisors, but are really only glorified prospecting or contact management tools, with a few financial attributes bolted on for good measure. If you can’t live in your CRM system and have complete visibility to your clients and business processes, it’s not a complete system.  A complete financial CRM system should have a document vault, an activity archive, management reports, as well as opportunity tracking and task management.  A growing number of small office and independent advisors are realizing the benefits of web-hosted CRM applications so they do not need to manage and maintain in-house servers or complex CRM databases.

Perhaps the main criteria when selecting a complete financial CRM solution is to determine what other applications it is integrated with. For example, can I get the data out seamlessly and run a comprehensive financial plan based on all of the asset and income details my CRM system is managing? If I’m a financial planner and I have to re-enter data, the efficiency the CRM system is offering may drop precipitously.  A good CRM system should really form a foundation for a complete advisor platform that also includes financial planning, portfolio management, and back office data integration for trading information and asset updates. Clearly no CRM system can offer this out of the box today, so integration with specific best of breed products to suit the advisor’s needs is important to consider, not just the standalone merits of the CRM system.  Advisor surveys show that a majority of small office advisors work primarily in Outlook to manage their client contact information and daily task and meeting schedules, while working in another tool for clients’ financial details. As a result, many advisors are looking for a CRM solution that works seamlessly within Outlook to reduce their learning curve and avoid additional complicated overhead.

Advisors looking to reduce overhead and make their practice more efficient are well-advised to explore and compare various CRM solutions to incorporate into their practice. To make a CRM deployment successful, it takes some up-front planning and expenditures to get the most out of the system.  A good payback from CRM is certainly not assured unless it becomes a cultural commitment from the entire firm.  But done properly, a CRM system can certainly be a great foundation for improving your practice and the value you can offer to clients.

Gary Kinghorn is the Director of Product Management at AdviceAmerica, Inc., a leading provider of financial planning and client relationship management solutions to major firms and independent advisors. Previously, he was a financial advisor with Smith Barney in Menlo Park, CA. He can be reached at gkinghorn@adviceamerica.com, or read his advisor blog on practice efficiency and technology trends.