Issues advisors face with technology integration

Michael Kelly, the founder of fee-based registered investment adviser Switchback Financial, starts logging into his client relationship management software every day, where he keeps his client notes, calendar and to-do list.

Kelly also spends a lot of time in his financial planning tool, which has most of the cash flow data he needs to get things done on his agenda, but limited integration with CRM means he’s constantly changing and re-entering. data between the two programs.

“Let’s say I’m looking at a particular client’s property and casualty insurance, I need to know the cash flow dataset. So I get this in my financial planner, then I go back to CRM, then I go to my custodian, then I go back to CRM, I get my next task, then I go back to financial planning software to find this client and his information,” Kelly said. Sometimes data is structured differently on different programs, leaving Kelly to figure out how to format it on his own. “If I could get all this data entry in one place, it could be a one-stop shop,” he said. “Some [fintechs] claim to have an integration, but it’s so dull.

“Some [fintechs] claim to have an integration, but it’s so dull.

Michael Kelly, Founder, Switchback Financial

Kelly’s experience is familiar to many financial advisors. The typical company uses five different technology vendors, and a third of companies are looking to add more, according to the 2022 Adviser Technology Study by InvestmentNews Research. However, 57% of advisors say the lack of integration between their primary applications is the biggest problem with the technology.

“It’s kind of the craziest thing where some [fintechs] pretend to have an integration, but it’s so dull,” Kelly said. “Like, cool, you brought in the client’s name and birthday, but it’s the more detailed stuff that I’m really interested in.”

Advisors expect the technology they use for work to follow what they see in consumer technology, said Kristen Schmidt, founder and president of technology consulting firm RIA Oasis. Much of the integration touted by the industry comes down to simple connections like support for single sign-on, where logging into a fintech will connect an advisor to other tools, or the ability to unilaterally transfer data from one software to another.

Advisors today want to see software changes automatically updated in every app in their technology stack, Schmidt said. “That’s what everyone wants right now. We have a gap in this industry for data collection and updating between systems.”

technology integration advisors

More than just an inconvenience, the lack of integration can have a tangible impact on a business. According to research firm Cerulli Associates, 94% of practice management professionals find that limited technology integration creates productivity challenges.

“What it looks like today is a waste of time,” said Ainslie Simmonds, chairman of Pershing X, a new fintech-focused business unit within BNY Mellon.


The industry seems to be struggling to move forward. This is the second year in a row that technology survey respondents cite integration as their top technology barrier, and the third year in a row it is cited as a major challenge by a majority of respondents. Two-thirds of advisors report that some of the systems are connected while others are not, and there has been little movement across several studies despite widespread recognition that this is a major barrier .

technology integration advisors

The problem is structural within the industry, Simmonds said. Tech companies are encouraged by early investors to focus on solving a single problem like tax optimization, financial planning or portfolio building, but there is no shared infrastructure on which these companies can lean on. New technology companies have more and more niches to break into an ever-expanding crowded market.

“For example, we used to just have financial planning and now we have software for student loan planning, social security planning, and estate planning,” she said. “It’s going to keep happening because all this fintech venture capital money pouring in says ‘find your niche, that’s the way to differentiate it’. This problem is going to get worse before it gets better.

Businesses either have to put things together themselves or rely on a partner, such as a custodian, to do it for them. InvestmentNews Research found that 56% of advisors select individual technology vendors to build their technology suite, while 20% use an open architecture service provided by a custodian or broker.


At the same time, more established fintechs have expanded the services they provide, often through acquisitions, to offer all-in-one solutions that promise greater connectivity. Adoption has been slower, with 18% of advisors reporting using a product provided by their dealer or BD and only 6% reporting using an all-in-one solution provided by a vendor.

technology integration advisors

While these can be great for new businesses starting with a digital blank slate, it’s harder for established businesses to change multiple pieces of technology at once, said Robert Schultz, chief operating officer of Rollins Financial Advisors. , an Atlanta-based RIA with $1.1 billion. in assets under management.

“It’s impossible to change everything at once, so you have to slow down the transition,” Schultz said. “One problem with slowing change is that what you thought was a great solution today may not be in one to two years.”


Not all advisors struggle with integrating technology. While there’s room for improvement, the fintech advisor is performing better than ever before, said Chris Chen, CEO of Insight Financial Strategies, a Boston-based fee-planning firm.

“Most of the vendors I use have many direct integrations with all kinds of vendors,” Chen said in an email. “What’s hardest isn’t integrating the technology, what happens often is integrating it into workflows.”

Having documented and repeatable workflows is good practice for companies to get the most out of their technology, Schmidt said. Businesses should also have a dedicated person on staff to keep up with ongoing technology integration updates to update workflows accordingly and train the rest of the business.

Companies are also successful in selecting a single technology to be the primary data hub that connects to the custodian, and then using APIs to push that data to other fintechs. More than half of respondents said their CRM acts as the hub of their technology stack, and 62% said CRM was best integrated with other technology elements.

“I really see it as the CRM should be the central hub,” Kelly said. “From there it should be able to route information to and from financial planning software, tax planning software, performance management tool, custodian, etc. you wouldn’t need integrations between each product.

The goal is to create something like Microsoft’s Office 365 or Google’s G-Suite — a true fintech ecosystem for advisors, Simmonds said. But getting there will require a significant paradigm shift for many industry players.

“We’re not as good as big tech at really understanding the value of open architecture. We think we have to own it all,” Simmonds said. they’re going to own the councilman’s office are completely insane.”

Afraid to hold bonds as rates rise? Try an annuity for size

About Shirley L. Kreger

Check Also

HPG, a Leader in EHR Technology Integration, Acquires HIT

SPRING HILL, Kan., July 14 10, 2022 (GLOBE NEWSWIRE) — Healthcare Performance Group, Inc. (HPG), …