“What really shocks me is how few advisors actually use CRM software. I think they’re missing the boat.” So says Timothy J. Watters, founder and principal of Watters Financial Services in Paramus, N.J.

Indeed, customer relationship management (CRM) software is one of the most important pieces of technology that can help sales-oriented businesses manage their current client relationships as well as prospect for new ones—but only if it’s used correctly and effectively.

CRM systems store and manage existing customer and prospect data, sales leads and other information in one location, usually in the cloud, which makes the information accessible to everyone in an organization in real time. There are several CRM systems on the market designed specifically for financial advisors, registered investment advisors, retirement planners, wealth managers and broker-dealers.

Financial Advisor asked several financial planning firms of various sizes to talk about the CRM software they use, its advantages and disadvantages, how long it took them to master it, and what they would advise companies of their size when choosing such a system.

Watters Financial, a four-person firm with $120 million under management, has used Junxure for many years. The firm first used the desktop version before switching to the cloud version several years ago.

Tim Watters describes Junxure as a “very robust CRM program. We have created several workflows for many of the tasks that we have to deal with on a regular basis. We have workflows for everything from sending money to people to dealing with a death of a client to the review cycle. You name it, we have a workflow for it. We have also created service levels for each of our clients based on the level of assets that we manage. Each one triggers its own cycle.”

While Watters describes Junxure as “one of the best CRMs out there and we have been very happy” with it, he says updating the workflows “can be cumbersome,” though he adds that many other CRMs are also rigid in that regard. He says it took several weeks for his employees to learn the system initially, although “our younger employees picked it up much faster.”

Watters says buying a CRM system from a large vendor costs more, “but usually in the long run is a better option,” adding that financial advisors should choose a system they can grow into.

“In a world where advisor and client communication must be thoughtful and organized, a powerful CRM is essential,” says Pete Engelken, chief operations officer at Allworth Financial, a financial advising firm with over $4 billion under management. “If used properly, it’s incredibly effective to document client information and interactions, organize, create a calendar, and measure activities and future tasks.”

His firm uses Tamarac, which is preconfigured for the wealth management industry and currently serves over 1,000 RIA firms ranging in AUM from $10 million to over $10 billion.

Engelken says Tamarac is pre-integrated with Allworth’s portfolio accounting system, which makes navigating between the two applications easy. Tamarac is easy to learn and “provides quality training,” he says. However, “if you intend to customize it to meet your specific business needs, there are some limitations on the degree of customization allowed.”

Indeed, rigidity and a lack of flexibility were often mentioned as drawbacks to some CRM systems.

“The biggest limitation I’ve found with our CRM software is that it doesn’t give us enough customization options,” says Chrissy Lee, co-president and chief operating officer at Kalos Financial, a broker-dealer in Alpharetta, Ga., with an AUM of $3.2 billion. Kalos also uses Junxure. “It’s rigid, in that we aren’t able to add more phone numbers or add another line item. These added features would provide us with even more details to better connect with clients and/or prospective clients.”

However, Lee says Junxure “does a good job in keeping our advisors, staff and back office efficient. Its ability to assign tasks to various people helps everyone stay focused, and the alerts ensure we’re meeting deadlines. The different folders we create for clients establish a sense of organization that benefits the entire firm.”

Before choosing a CRM system, Engelken and others advise meeting with several vendors and to watch a demo of the application to see it actually being used. Likewise, they get references and talk with firms of similar size who are using that system.

AdvicePeriod, a Los Angeles-based wealth management firm with $3 billion in assets under management, uses Salentica Elements powered by Salesforce. According to its website, Elements “is a turnkey, yet configurable solution built on the Lightning Platform by Salesforce and is designed specifically for the unique needs of RIAs and wealth managers to deepen client relationships and grow with scale.”

Jonathan Straub, AdvicePeriod’s founder and principal, says Elements integrates with the company’s portfolio management and reporting software, Black Diamond. He likes its flexibility in helping the company model its data. It also has “excellent reporting and dashboarding features, an included workflow creation solution [Conga Orchestrate] and all the third-party integrations Salesforce has to offer.”

One drawback with the system, Straub says, is its complexity. “Although this is a benefit for us, prospective firms will most likely need a full-time employee who can understand how Salesforce works to get the most out of the platform.” Straub says it took about a week for AdvicePeriod’s advisors to familiarize themselves with the system’s core features, although “we are constantly adding and enhancing features, so we don’t think the learning will ever end.”

Elements starts at $80 per user per month, although discounts are available if it’s bundled with other services such as Black Diamond, Straub says. “When choosing a CRM system, it is important to understand the problem you are trying to solve,” Straub advises. “For us, we realized that we needed to improve integration within our tech stack. We also realized that we wanted to digitize all of our business processes. To do this, it was important to have the ability to create complex, multi-step workflows.”

David Zavarelli, a certified financial planner at LPL Financial in Danbury, Conn., with $50 million in AUM, uses Redtail, a CRM system designed specifically for financial professionals. “Proper use of a CRM like Redtail allows me to deliver quality, timely client service, and helps to keep me compliant by documenting all client contacts,” Zavarelli says. “It’s also helpful to keep track of opportunities and prospective client contacts so they don’t fall off the radar. They also have an Apple mobile app that I can dictate notes into and turns them [into] text. This eliminates the need for me to use a dictation service, which typically costs another $70 per month.”

LPL offers him a discounted monthly cost of $50 for Redtail.

Like any system, Redtail is “only as good as the time you invest entering information and programing workflows,” Zavarelli says. “You need to get everyone to use it regularly to get the benefits. But once you get used to using it on a regular basis, it is very effective. It has allowed me to have a paperless office. I can essentially work from anywhere, and I have all necessary information in the CRM. Having one place to look at all communications with clients and be able to easily pull up detailed notes is invaluable.”