Dissatisfaction With Microsoft
Some advisors are saying loudly and clearly to me that they are unhappy with Microsoft products. "Not sure this is a trend, but I am extremely frustrated with Microsoft products, especially Windows," says Smith. "Thus, in the near future, I am going to purchase an Apple computer/laptop for home to see how this might impact the office environment." Smith is also frustrated with Microsoft's browser, but like others we spoke with, he indicated that he was waiting for his vendors to become browser-neutral before abandoning Microsoft Internet Explorer. "I plan to change to Firefox or Chrome as an Internet browser if TD Ameritrade's software will work with something besides IE7. I have been using Safari at home and love it."
Others voiced their dissatisfaction with Microsoft's Windows Vista operating system specifically. Marc Schindler, a CFP with Pivot Point Advisors LLC, told me: "We just purchased a Dell laptop for our conference room and paid a premium for Windows XP instead of Vista." When I ask why, he says of Vista, "It's a memory hog and there are numerous problems with it." Stone, meanwhile, plans to buy two new computers this year, but both will run Windows XP, she says, because "every person (without exception) that I know that uses it, finds it very frustrating. The last thing I need is technology headaches."
With advisors' renewed interest in efficiency, it is possible that even more of them will become disenchanted with Microsoft products unless quality improves. Clearly, when it comes to browsers people are looking for speed, efficiency and security. Most experts believe that Internet Explorer lags in all three areas. There is no excuse for vendors who do not support other browsers, and because of demand, it is likely that Chrome, Firefox and Safari will be widely supported. We do not expect advisors to abandon Microsoft products in droves just yet, but we do expect advisors to demand that their vendors accommodate alternatives in the future.
Automating Rebalancing
In spite of tight budgets, firms will continue to pursue technologies that can demonstrate a quick return on investment. One of those technologies is rebalancing software. LeBlanc says that his firm plans to buy iRebal late in 2009 or early 2010. Ron Rhoades, a CFP at Joseph Capital Management LLC, is also looking at acquiring portfolio rebalancing software, perhaps Tamarac, at about the same time.
Improving Backup Capabilities
One surprising trend is that virtually every advisor I have spoken with has voiced some displeasure with the state of his or her information backup capabilities. Some advisors are finding that they require extra capacity or increased speed to handle their backups.
Others who have tested their restore capabilities have found them lacking. Finally, a couple of advisors who back up over the Internet are finding that they require additional bandwidth to process the volume of data they must transmit daily. Clearly, there is a real demand for better solutions in this area.
Data Encryption
Data encryption is also a timely industry subject, because a number of states are starting to require it under certain circumstances, and others are sure to follow. In Nevada, a law requiring encryption for transmission of personally identifiable information over public networks was enacted late in 2008. A Massachusetts law, scheduled to take effect May 1, requires that businesses encrypt not only the transmission of personal data, but also the personal data stored on laptops and removable storage devices. The Massachusetts law also says organizations must verify that their service providers are compliant, which could have repercussions beyond the Massachusetts borders when the law takes effect. Over time, it is highly likely that advisors will be held to a higher standard of protecting their client's personal information, and we expect most firms to begin moving to encryption technologies, whether they are required to do so by law or not.
With all of these things to consider, it is likely advisors will continue to invest in technology in 2009, but they will focus primarily on core functions and operations as opposed to cutting-edge tools. And they will also look to invest their technology dollars where they can yield the best and most immediate return on their investments. Successful technology vendors in the coming year will be those who can help advisors work smarter, faster and more profitably.