Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.
Evaluating your tech stack and contract pricing must be on your agenda as your wealth management firm starts the new year. Modernizing your tech stack will ensure operational efficiencies, increased client satisfaction, and overall business growth.
Here are three reasons why:
- Align your tech stack with your growth strategy
Aligning your tech stack with your growth strategy is a pivotal step towards improving your clients’ experience. A technology stack that does not help you to achieve your goals is a counterweight on your business that stifles growth.
It is critical to conduct a thorough analysis of your existing processes and technologies by evaluating their efficiency and effectiveness to achieve an optimal technology stack. This assessment will pinpoint opportunities for streamlining workflows, automating tasks, and ultimately improving the overall advisor and client experience.
Start by reviewing your processes. Outline what is working well and not working well in each process from lead through annual meeting. Advisors usually feel most comfortable with discussing their sales and financial planning processes. Operations teams usually feel most comfortable with client onboarding and money movement.
Evaluate how well your technology maps to your processes once you’ve completed your process review. Areas where technology does not provide you with process efficiency are typically areas for improvement. Ask yourself whether your current technologies have the capacity to scale alongside your future growth trajectory and if they can seamlessly support onboarding new team members to support your growth. A robust and user-friendly tech stack will elevate employee and client satisfaction, which supports growth.
- Ensure protection through contract terms and performance through SLAs
This step involves a thorough analysis of the contract terms and service-level agreements (SLAs) of your technology providers. Review the specifics of each contract to verify they align with your current and future needs, and regulatory requirements.
Your review of the contract terms should determine how each agreement safeguards your interests. Are there clauses that limit your flexibility or impose additional costs? Does your vendor intend to use your client information for their own purposes? Do the contracts specify key elements such as cancellation costs, CPI adjustments, and auto-renewal language? Cancellation costs should be considered if you decide to replace any technologies.
The SLA should ensure optimal performance and clearly outline the steps that you can take when you have a service interruption. This becomes part of your business continuity plan. The SLA should clearly define the level of service, performance standards, and remedies or penalties for service providers failing to meet their commitments.
Review the cybersecurity posture of each of your service providers. Know the safeguards that they have in place to protect your firm and client information. Also know how to contact them if you suspect a cybersecurity incident.
This assessment will guarantee that your technology contracts deliver the performance, reliability, and security your wealth management firm requires.
- Evaluate contracts to identify cost savings
Evaluate your contract pricing to uncover potential cost-saving opportunities. A comprehensive examination of the cost-effectiveness and capabilities of each contractual agreement is a hallmark of this step. Consider the cost for each technology on a per-advisor or per-household basis to identify technologies that are cost outliers. Identify unnecessary services or platforms your firm might be paying for but not utilizing. For example, did your firm turn off Microsoft licenses for team members who left the firm?
Benefits of engaging external consultants
Bringing in external consultants for your technology and cybersecurity assessments offers numerous advantages. Consultants will objectively evaluate your contracts by leveraging their expertise in industry standards, pricing, and service levels. Consultants are adept at identifying hidden costs or services that internal biases or lack of knowledge may cause you to overlook.
Consultants may have experience in changing technologies and can set your expectations for the timeframe to migrate from one technology to another. This can help your firm to ensure enough time to change service providers before a costly contract extension. They can provide best practices based on their experience with similar firms, aiding in negotiations for better terms or finding more suitable service providers.
Consultants can offer an independent review of your firm and service provider’s cybersecurity policies and processes. This can be invaluable to ensure that you are protected and for your service providers to realize that you will review their practices.
The best consultants serve as an extension of your team and their knowledge and expertise can lead to substantial savings, better contract terms, and a more strategic alignment of your technology with your processes.
Start your year with a tech assessment
The start of a new year is the perfect opportunity for your wealth management firm to evaluate its tech stack and contract pricing. Strategic investments in the right technologies can have significant long-term benefits, including:
- Improved process and operational efficiency;
- Heightened employee and client satisfaction; and
- Achieving your growth goals.
Consider evaluating your tech stack or engaging an industry consultant to help you and support your firm’s potential for increased success.
John O’Connell, founder and chief executive officer for The Oasis Group, specializes in helping wealth management and technology firms solve their most complex challenges. His newest online training courses serve as a leading source of education for financial professionals at all levels in their careers. With modules ranging from cybersecurity to custodian markets and more, https://training.theoasisgrp.com/ enables firms and enterprises to upskill, learn at their own pace and rewatch lessons to reinforce specific learning objectives. Get an additional 20% off any course with coupon code ADVISORPERSPECTIVES.
A message from Advisor Perspectives and VettaFi: To learn more about this and other topics, check out our videos.
More Financial Planning Topics >