Financial Planning

You can bet that the economic recession has financial planners in a tizzy. While the current economic climate is bound to increase the likelihood that demand for independent financial advisors will soar over the coming year, the need for client relationship management tools are increasing as well.

A recent software survey by Financial Planning revealed that its constituents are interested in learning how to leverage existing staff through improved technology and better practice management techniques, but are limited by what they think they know about the software available.

The 350 survey recipients indicated the types of software they currently use and how satisfied they were with it. New trends within the financial planning industry have emerged with more users adapting industry-specific technologies aimed at effectively creating and managing automated workflows, as well as managing documents and other pertinent information.

Client Relationship Management (CRM)

Most survey participants recognize the value of CRM software in their practices as 97% of participants said that they use it. Yet, respondents had different ideas for how and what CRM is used. 25% of respondents indicate Microsoft Outlook as their CRM. ACT!, a well-known general purpose CRM program was second with 15%. As for industry-specific CRMs, usage of Junxure, Redtail and ProTracker was up representing 11%, 9% and 4% respectively.

Document Management

Since 2007, more than 38% of respondents indicated that they do not use document management software. Not only is there an unfortunate decline in one of the most important management tools available, but those who are using document management technologies have admitted to using Adobe Acrobat as their primary source of management. Perhaps, there is need for clarity within this area.

At a minimum, a document management system includes a filing system, a retrieval system and storage. Financial professionals often require more sophisticated capabilities, including:

Adobe Acrobat may be able to handle the basics, but it is not an advanced knowledge manager.

Compliance Management

Disturbingly, 71% of advisors noted that they are not using any software to help with their compliance needs. While it might seem reasonable to scrimp on CRM or document management, financial planners would be hard-pressed to find a technology that would benefit them as much as one that oversees compliance.

Next Steps

While it's nice that 63% of advisors would be willing to spend more on technology if would improve their firm's overall efficiency, financial planners have an upward battle ahead of them. There is a growing disconnect between what advisors think they have and what they actually do (or don't) have with regard to document management systems. The onus lays on both the customer and the vendor to communicate their needs more clearly and to spend more time educating advisors about the benefits of their products. The financial planning industry will be among the most watched in the coming months. It would behoove them to get to work.