This year's Technology Tools for Today ("T3") Conference, put on by Virtual Office News in February, offered advisors guidance on how to use technology to deal with the economic crisis.

As we all know, the current economy has multiple affects on advisors' practices.  Since the majority of independent advisors charge clients asset-based fees, and those asset values are down considerably, advisors' revenues have dropped commensurately.  But the fun doesn't stop there. With slashed revenues comes the need to cut all but the most essential of costs, including staff. Hence, employees are nervous and their performance may be compromised as they worry about job security.  And last but not least, clients are fearful their asset values won't recover and fearful their advisor may not have things under control.

What are advisors to do?  Although it may not be obvious-it represents yet another expense rather than a no-cost solution-they should look to technology to solve or lessen many of their current problems.  At least, that's what Joel Bruckenstein and Dave Drucker, co-chairs of the Tech Tools Conference, would say.

"We've been telling advisors for years to reduce their dependence on payroll employees and substitute for them both outsource partners and technology solutions," explains Drucker.  "The whole point is to take advantage of the efficiencies and reduced costs available when manual processes are automated and when tasks that must be done by a human can be outsourced to one with greater expertise and a lower cost structure than the advisor can construct in-house."

So, to discover what technologies can be most effective in helping advisors through this current crisis, I spoke to five of this year's top Tech Tools Conference sponsors to see what they've brought to market to assist advisors during this difficult time.

The first question we posed was: "What are the biggest challenges facing advisors today and how are you addressing those issues through technology?"  

Brian Davis, business development manager for Scottrade Advisor Services, answered, "Given the current market and economic environment, advisors' biggest challenge and primary focus should be on managing client relationships.  Leveraging technology, advisors can improve many of their day-to-day processes, and in turn allocate more time for client relationships."

And when one thinks of the technology behind client relationship management, one should think CRM.  Too many advisors still use basic CRMs that function like Rolodexes-their only purpose being to hold clients' and associates' contact information.  Failing to use all of your CRM's features -or failing to use a CRM robust enough to have advanced features-is to ignore the potential of your CRM to help you provide superior client service, including regular "touches," workflow tracking and document archiving for improved client satisfaction through faster response times.

Scottrade Advisor Services helps by negotiating preferred pricing on best-of-breed technology providers, not only in the area of CRM solutions, but portfolio management systems and financial planning applications, as well.  "In fact," said Davis, "we recently acquired Portfolio Director, a portfolio management system for small- and medium-sized advisory firms seeking an affordable portfolio management option."  The preferred pricing Scottrade offers on CRM and other solutions not only addresses the need to maintain solid client relationships during this period, but also the need to cut costs.

Another route to efficiencies and costs savings, say the T3 sponsors, is the use of integrated systems. Ed O'Brien, senior vice president for Fidelity Institutional Wealth Services, said, "The benefits of integrated technology systems are clear: Integration can help eliminate the need to re-key information, so if you enter a client's information into a relationship management application, it would pre-populate other applications, like financial planning software, for example. This saves time and reduces errors."

An integrated platform can also reduce the number of vendor relationships and software applications advisors must manage.  "In times like these, with margins under substantial pressure, advisors need all the time they can get to spend on profitably growing their practices," O'Brien says. "By wisely choosing the right applications and integrating them in a way that makes sense for their firms, technology can help advisors boost efficiencies and improve the bottom line."

Fidelity launched Fidelity WealthCentral to help advisors address these market challenges. WealthCentral helps independent advisors drive greater practice efficiencies by integrating key applications including portfolio management, CRM, financial planning, and portfolio rebalancing and trading into a single Web-based offering.

Similarly, Redtail Technologies integrates three key functions that already have a natural fit, yet are addressed with non-integrated systems by many advisors. Brian McLaughlin, Redtail's CEO and chief technology officer, said, "Redtail's core products are CRM, imaging [or document management] and email archiving.  We have identified three ways in which advisors who subscribe to these integrated services can become more productive.  First, integrating CRM with imaging and email archiving makes the advisor more organized, and there are cost savings to increased organization.  Second, using a CRM wisely allows the advisor to offer his clients an enhanced level of service and gives him the ability grow his client base.  Third, a robust CRM with imaging and email archiving increases the advisor's strategic ability to view, manage, analyze and allocate firm resources in the service of clients."

It seems indisputable that integration-whether achieved through stand-alone, internally-integrated systems, or independent systems that have partnered to create "bridges"-is inherently more efficient than using separate, non-integrated software systems.  But what if advisors, especially given the impact of current market conditions on firm revenues, simply can't afford to purchase lots of new technology no matter how much sense it makes?  In other words, how can advisors better leverage the technology they already have?

One way, McLaughlin said, is through training. "Advisors can get more out of their technological tools by taking advantage of training opportunities.  We see a lot of advisors purchase emerging technologies but never fully implement them.  To help our users more fully implement our tools, we will soon be releasing Redtail University, a learning center in which our users will have interactive opportunities to explore and increase their familiarity with Redtail's Productivity Suite."

Dan Skiles, Charles Schwab's vice president of technology for its advisor services division, added, "The first step is to think about your custodian and what it can do to help."  Advisors are often unaware of the technology assistance custodians can provide, and even newer technologies already available to them-but thus far unused-on the custodian's Web site.  An advisor might say, "I know you have a new way to open an account on your Web site," but the advisor isn't the one opening accounts in his firm-his staff is.  

"We can run a report to show them how their staff is already using [or not using] this technology," Skiles said.  "We can demonstrate to them the time savings possible with greater use.  We encourage firms to stay on top of our offerings by assigning that job to one person in the firm.  That person then reviews our Web site periodically, watches for our emails and stays in tune with what we can do for the firm."

"It's important to contact your existing technology providers and see what additional solutions they offer," said Davis of Scottrade Advisor Services. "Most technology providers have multiple technology solutions that can add value or have key integrations with other best-of-breed providers.  Also contact your custodian or broker/dealer to find out if they're able to offer their technologies at a discount-sometimes a substantial discount-or if they have internal solutions."  

These are some of the keys to lowering costs or creating new efficiencies with the wiser use of existing or new technologies.  To boil it all down, however, I asked the five T3 sponsors for the one piece of advice they would give financial advisors when all else is said and done.

Michael Wilson, Morningstar's director of marketing, said, "I think that advisors need to run the numbers on their software setup.  They should determine the cost of all the software they purchase on an annual basis and then determine the cost of maintaining and managing that software.  Could they be saving money if they changed their solutions?  Could their staff be more efficient and provide better support if they streamlined their software solution and, if so, how much more revenue might they bring in?  This exercise is important because it forces an advisor to take a fresh look at his firm's needs and helps him determine how he could make his practice more efficient and cost-effective."  Morningstar offers an integrated solution to advisors called Workstation Office Edition.

"Technology is your friend-don't fight it!" Davis said. "Spend time performing your due diligence and be strategic in your purchases. Regardless of the overall cost, [substituting technology solutions for personnel] should still be more affordable than issuing W2s, 1099s and paying for employee benefits."

"In order to put technology to work for you, you have to harness it so [your various solutions] aren't working at odds with one another." McLaughlin said. "Most of the companies that provide technology to our industry were started by people from within the industry who had an idea that technology could make things easier and then acted upon that."

O'Brien urged advisors to "embrace technology, stay abreast of emerging trends and understand the link between technology and client satisfaction."  Finally, Wilson said, "It's important to stop and think about how technology can make a big difference in this market environment.  You could be leveraging what you already have or looking at new solutions and writing the check because the return is realistic and can improve client service.  It's in these times when revenues aren't growing that you really notice the bottom-line impact of technology."

So, as an embattled advisor with scared clients, cautious employees and top-line revenue declines comparable to your deflated 401(k) balance, think hard about how you'll tackle the recovery of your business.  Obviously, solid client service is a must.  The question is, will you accomplish it with out-of-date technology solutions that represent a metaphorical ball and chain? Or will you upgrade your systems and do what's needed to survive while cutting costs through greater efficiency? The choice is yours.

Marie Swift is president of Impact Communications Inc. For more information on the T3 conference, take a look at the conference blog.