Management software has solid foundation but needs more functionality.
Recently, I've been testing the beta version of
Advisors Office's latest release. Advisors Office is "office management
software." The software seeks to provide a single unified database
containing all of the essential information required to operate your
business including customer relationship management (CRM), portfolio
reporting, human resources, compliance, a document vault (paperless
office system), client tax reporting, time tracking and invoicing.
Since the software provided me is still classified
as a "beta," I've concentrated primarily on the feature set as opposed
to performance or potential bugs. My primary goal is first to determine
how the individual modules (CRM, portfolio management, etc.) stack up
against competing products. Second, I hope to draw some preliminary
conclusions about the advisability of using Advisors Office as one's
sole "office management software" solution.
Technologically speaking, Advisors Office is a
state-of-the-art platform. It is built on the Microsoft .NET 2.0
platform and the latest SQL database technologies. For the most part, I
found the program easy to navigate. The main client screen has a
familiar feel for those who have used MS Outlook. The screen is divided
into three sections. The majority of the screen real estate displays
the names of all clients in the database. Clicking on a name reveals
the client record.
Along the left at the top there are three search
boxes. Below the search boxes are links to other important sections of
the program: tasks, employees and calendar (more on them later).
In order to get the true benefit of the search
tools, it is necessary to create categories and apply those categories
to clients. Categories are user-defined, and multiple categories can be
applied to each client record.
The first search box allows you to search for all
clients that have been categorized in one or more ways. So for example,
you could categorize a client as an "A" client. You could also
categorize a client as one who custodies assets at Fidelity. Using this
first search box, you could look for all "A" clients, you could look
for all clients that custody at Fidelity, or you could search for only
those "A" clients who custody at Fidelity. The second search box is the
exception box. Here, you can exclude categories from the search, so,
for example, you could search for all clients in the database except
those who custody at Fidelity. The third is the advanced search box.
Clicking here opens a window that allows you to easily search all text
and date fields. By using the provided drop down menus and check boxes,
even novice users can quickly create and execute custom searches.
The client record uses a multiple page-tabbed
interface. On the first page, there are fields for all client and
spousal contact information including name, addresses, phone numbers,
e-mail addresses, etc. It appears that you can add an almost unlimited
number of addresses and phone numbers, but there are only three fields
for e-mail addresses, enough for most individuals. The main tab also
stores dependent information, Social Security number, date of birth and
driver's license number. There is a drop down list for risk profile and
an "invested amount" (the total account values based on the latest
custodial download). In addition, there are spaces to include a digital
picture of the client and spouse.
The reports tab contains two subsections. One
produces client reports such as cash flow statements and net worth
statements. The other produces portfolio reports based on the custodial
downloads. A category tab allows the user to assign categories to this
client record.
At the client meeting tab, meetings can be tracked. Here, all client
meeting records are listed. Clicking on a record displays the meeting
record details. Each record includes fields for subject, visit date,
visit with (participant from the firm), and meeting type. All of the
above fields, with the exception of the subject field, are populated
from a drop down list. The summary field allows users to input more
lengthy free-form notes.
A net worth tab enables users to add assets in the
upper half of the screen and cash flows on the lower portion. These
numbers feed the client reports. Asset records include an asset
description, owner(s), asset type, market value, liabilities linked to
the asset, valuation date and a rate of return. Cash flow records
include information on cash flow type (employment income, living
expense, etc.), frequency, date and amount.
The document vault tab works like this: The user
creates a document file template. Let's say that for each client, you
want a directory tree that includes a financial planning file and a tax
file. Under that, you want a subfolder for each year. You create the
folder structure from the edit menu on the main page, and then each
client record will have an identical folder structure associated with
the client record. So, continuing the above example, I would have a
financial planning folder with a subfolder for 2006. If I wanted to add
a document to that folder, I'd simply click the folder, hit the add
file button, navigate to the desired file on my hard drive in the
dialog box, and select the file. A link to the file would now reside in
the designated folder.
My version of the software came with two portfolio
related tabs. One was for the custodial downloads; in this case it was
labeled "Fidelity." The other tab was for other accounts. This latter
tab allows for manual data entry of additional accounts. I was told by
an Advisor Office spokesperson that if I had a second custodial
relationship, say TD Ameritrade, the second custodian would get its own
tab.
There is a money movement tab that looks
interesting. It tracks management fees, liquidations and income, and
transfers in and out of the accounts under the custodial relationship
tabs. This is done via the custodial downloads.
The employee section serves a number of functions.
It stores employee contact information. It can also store some human
resources-type information such as vacation days, sick days, personal
hours, etc., as well as an employee's password to the system. In
addition, employee permissions are controlled here. By checking and
unchecking boxes, permission to view, edit and print from various
sections of the program is controlled.
The tasks tab allows one to easily view all of the
tasks related to an individual employee. The list can be filtered to
display open tasks, completed tasks or all tasks.
The calendar is adequate. There are daily weekly and
monthly views. You can view a single employee's calendar, or you can
view the calendar of two employees side by side. It you are trying to
schedule a time for multiple employees, you can merge calendars so that
you can see free time slots that they share in common. There's more to
the system, but I've at least touched upon most of the major features.
Drop down lists from the main screen provide access
to the HR section. Here, you will find confidentiality agreement
templates, new employee checklists, staff member timesheets, W-4 forms,
performance appraisal forms, disciplinary action forms, exit checklists
and much more. The adequacy of these forms will vary by user, but if
you don't currently have any of this material, you may find it useful.
The compliance menu provides templates for form ADV, modification of
CRD, a sample whistle blowing policy, the SEC's most recent audit
request list and many other useful documents.
Now, let's tackle the first question I posed: How do the modules stack
up against the competition? The results are mixed, but overall I'm
disappointed.
The CRM section is the strongest. It does not
provide the depth of information that Junxure-I does, but it is
sufficient for the needs of many. Task creation and tracking work well,
but you cannot create processes (a collection of tasks that can be
preprogrammed and assigned with a single mouse click). The calendar is
fine, but I could not figure out how to get an integrated view of
appointments and tasks. In summary, I'd say the CRM portion is OK, but
not extraordinary.
Portfolio management is weak. Advisors Office cannot
currently report cost basis, although the firm is planning to add this
capability soon. It also appears to lack the ability to provide full
consolidated reporting. I asked a company spokesperson what would
happen if I used two custodians, and if a client held an identical
security in one account at each custodian. Could I get one consolidated
report of that holding at both custodians? The reply was "not yet."
While I like the idea of the "money movements" tab,
its current structure is somewhat problematic. Right now, the only way
to get information in there is through custodial downloads. If there is
an error with a download, or if some management fees are paid to you by
check as opposed to debiting the account, you have to rely upon
Advisors Office staff to perform the data entry. Allowing the advisor
unlimited access to this feature can lead to data corruption
possibilities, but ultimately it is the advisor's data and the
advisor's responsibility to control access within the firm through
proper permissioning.
Document management capabilities are fairly basic.
You can create a folder structure to store documents, but there is no
scanning interface; you need to supply your own. Your ability to search
through documents is limited. Files are listed under the document vault
tab in the client record by name, size, date modified and type. You can
sort by any of these column settings; however, I couldn't locate a
document search function in the document vault section, and I could not
figure out how to search across clients.
Calling the human resource and compliance material
section "modules" is a bit of a stretch. Some useful material is
included, but I think there needs to be more in order for them to
qualify as modules. The business office module, which includes the time
tracking function, is primarily geared to accounting firms, so advisors
cannot get the time tracking feature without paying for extras they'll
never use. If invoicing capabilities exist, I didn't see them.
Pricing is by module. The core package includes CRM
(client database, calendar, task, notes). Single users pay $795, and
the three-user version is priced at $1,195, with additional users at
$95 per user. Everything else is extra.
For single users, the portfolio piece with a single
custodial download is $1,195. Additional custodial interfaces are $495
each. Human resource and compliance modules are $395 each, as is the
document vault. The net worth section costs $295 and the "business
office module," designed primarily for accountants, is $595. So, a
typical setup like the one I tested (all modules excluding business)
for a single user would cost $3,470. That is way too much, particularly
given the weakness of the portfolio piece. Back that out, and you are
still paying $2,275; too much for this level of functionality. For
three or more users, a system minus the portfolio section is more
reasonably priced.
Based on what I've seen so far, none of the modules
compare very favorably with their stand-alone competitors. As a result,
I'd be hard pressed to recommend using Advisors Office as the
technological backbone of one's practice. I do, however, think that
this product bears watching.
The developers have laid a solid foundation upon
which additional functionality can be layered. If and when this occurs,
Advisors Office will be an interesting proposition for an office of
perhaps three to ten employees, provided the pricing is well aligned
with the functionality being offered.
Joel P. Bruckenstein is an
expert in applied technology for financial services professionals.
He can be reached at [email protected].