With increased focus on the use of technology to support and enhance the operations of a financial practice, broker-dealers and custodians have provided a broad selection of tools to their advisors. Given the competitive environment, many B-Ds and custodians have increased these offerings in an effort to attract and retain advisors. So it seems natural, at some point, to ask if the advisors are actually using these tools. And, if they are using them, are they making the most of the technology that is available to them through their broker-dealer and/or custodian?

To help answer this question, I spoke with Robert Powell, vice president of sales and marketing at Laser App Software, a leading automated forms management software solution that works with hundreds of broker-dealers and custodians. According to Powell, the adoption of technology (including software and resources) is generally low. But the fault does not rest solely with advisors. Broker-dealers and custodians are also at fault for a variety of reasons. First and foremost, a corporate vision is needed and should be clearly communicated to the advisors/reps. If there are technology fees, they also need to be better communicated.

And in cases where it makes sense, creating a tiered structure of tech fee subsidies might increase the adoption rate by advisors. Powell suggests that a structure rewarding advisors/reps for increased productivity, based on the use of software tools (for instance) could positively drive up adoption of such technology as it clearly aligns the tools with the success of the advisor.

One of the key concerns of many advisors is "who owns the data." Depending on whom you ask, you might get different answers. However, many advisors fear the loss of control over their client's information. For this reason, they may be reluctant to embrace a fully inclusive package solution mandated by their affiliated institution. However, institutions point to issues such as transitioning advisors and compliance as reasons for the institution to maintain control over the data.

But in cases where a happy medium is reached between the institution and the advisor/rep, the key seems to be to communicate effectively on the use of such tools and the benefits. Powell also suggests that software offerings need to be simple. Broker-dealers and custodians need to set a dependable standard for these offerings and then communicate that standard in a way that makes sense to the end users.

One example used by him is the problem of "NIGO" (not in good order). Paperwork, particularly trade-related paperwork, often has to go through several steps before completion. In the case of new applications or forms requiring client signatures, this may involve not only passing the paperwork back and forth with the client but also some trade review process steps before completion. Often, with so many steps (and potentially so many people) involved, there are multiple opportunities for errors requiring even more steps to correct. With an automated forms processing solution that could potentially include electronic signatures, many of these steps could be eliminated, which not only cuts down on processing time, but increases an advisor's staff efficiency and productivity. Simply offering such a solution without communicating how this solution could favorably impact the advisor's practice would be a mistake, in Powell's view.

I also had the opportunity to speak with David Grace, Ph.D., founder and managing director of Interactive Advisory Software (www.iassoftware.com). IAS offers an integrated suite of software tools that share a common database, such tools as CRM, financial planning, portfolio management, rebalancing and much more. Grace says that the adoption rate of such tools within the IAS suite as the client portal is actually very high among advisor/rep subscribers. The reason, according to Grace, is that IAS provides a high level of training, including videos and in-person instruction on how to leverage such tools to gain the greatest impact, increase productivity and efficiency in the advisor's practice.

Conversely, if such tools are offered to advisors (and their clients) without proper training and preparation, the adoption rate of a client portal, for instance, tends to be quite low. This may be due to a cascading effect. If the advisor/rep does not fully understand the value of the tool, he or she is unlikely to effectively communicate that value to his or her clients, much less provide instruction and support of the tool with clients. So it should not be surprising to note that adoption rates among clients are often below 10% in cases such as this.

David Fetter is the president of Quadron Data Solutions (www.quadrondata.com), a large data warehouse offering a suite of five applications ranging from account opening to data aggregation and compliance solutions for broker-dealers and advisors. In a recent interview with me, Fetter mentioned that the adoption rates of advisors can be extremely low and offered three issues that need to be confronted to overcome this:

1. Maturity issue. The process conversion to a new system or software platform can be lengthy and complicated. It is important to recognize the amount of time and effort required of an advisor's staff in fully adopting a new technology.