Making a great CRM isn't easy. Maintaining and servicing apps for financial planning and performance reporting software as well as a CRM is a lot more difficult. How will an all-in-one app keep up with a dedicated app that is continually adding new features in a world in which software programming skills are abundant? It can't.
Enterprise sales of multifunction apps will not be easy either. Enterprises limit the risk inherent in relying on a single vendor by instead using three separate apps for CRM, planning and portfolio accounting. The three apps are made by separate companies but are integrated via Web services.
Toaster ovens are convenient but not great for professional cooks. Look for apps that do more than one thing to see their penetration limited to advisors who can be satisfied using less than the best tool.
Online apps are gathering momentum and desktop apps are getting phased out. The slow march toward embracing Web-based apps and phasing out desktop systems is accelerating. Independent B-Ds are actively promoting online apps because they can monitor their advisors for compliance and exert greater influence (in some cases, control) over their reps. The B-Ds are thus funding development, growth and integration of online apps. That makes these systems more competitive and scalable. But the inherent benefits of online apps are also driving advisors toward them.
Online apps are less costly to maintain: When a desktop app vendor wants to upgrade features or fix a bug, the change must be made on each computer using its apps; when an online app vendor writes an upgrade or fixes a bug, it makes the changes on one computer, a Web server, and all of its users get the update. In addition, it's a lot more complicated to get data in and out of a desktop app into another application than it is to leverage an API in a Web-based app. Integration of Web-based apps is simpler and important to advisors. These factors make online apps less costly to maintain for vendors and advisors.
While RIAs who use desktop software are likely to lag in adoption of online apps because of the dominance of Schwab PortfolioCenter and Advent Axys, the benefits of online apps can delay for only another couple of years the movement of RIAs toward Web-based apps.
Registered reps are getting better platforms than many RIAs. For the first time ever, registered reps are often getting technology that's on a par with or better than platforms used by many RIAs. RIAs always had the distinct advantage of choosing the apps that best matched their advice model and business practices. It was a much more flexible and sophisticated way to practice. Reps were often told which apps they could use.
Now, while some B-Ds continue to dictate which apps reps can use, they are giving reps more choices and, more important, the choices are integrated with each other. Plus, not only are reps getting systems they can use with their clients, but B-Ds are building integrated intranets that allow an advisor to see a dashboard of his daily business activities and metrics.
Stitching together a platform with multiple apps integrated via Web services requires planning, technology expertise and training. While most B-Ds have resources for creating such a platform, RIAs are less able to build integrated systems and gain adoption of new technology. Consequently, reps are getting technology promoting efficiency and offering more features more than many RIAs.
For B-Ds, business conditions are better than they have been in years. If FINRA ends up as the self-regulatory organization for RIAs, key advantages RIAs have over reps will narrow. Independent B-Ds would find it easier to recruit advisors from wirehouses and may be in for a reversal of their long-slumping fortunes.