3) Beware of the ‘repackagers.’ Be wary of potential partners who, short of developing their own technologies, merely buy several standalone offerings and attempt to repackage them as if they represent one consolidated, interconnected brand. This is a business model that rarely, if ever, produces good results for firms and advisors. The problem with this approach, as I've witnessed all too frequently when hired to fix legacy technology issues, is that it creates data inconsistencies across each of the solutions that are cobbled together, as each portion of the platform tends to rely on different sources of data, with a resultant lack of cohesion and a need to constantly reconcile these data inconsistencies.
Again, because the future of our business lies in becoming an expert at integrating multiple solutions into one well-working platform, partnering with a service that simply glues together a series of unconnected technologies will only further imperil such efforts.
4) Ongoing support. Choosing the right technology provider is obviously a big decision that requires a significant long-term investment. For this reason, firms need to know that this tech provider is making commensurate investments into their own business to maintain and boost their levels operational efficiency. Ultimately, this means having a support infrastructure that can, among other things, seamlessly introduce updates, troubleshoot problems in real time and serve as a facilitating partner to firms as they seek to grow their businesses.
Every year, tech providers unleash a range of innovative products and services on the industry. And every year some IBDs and RIA firms ignore those innovations and continue to do business the way they always have. Firms like this will soon be dinosaurs.
Tech has to be more than just an unseen back office function. Technology is front and center in delivering a second-to-none advisor and end-client experience, and these days, it is perhaps the biggest variable that will drive the bottom line now and in future for firms in our industry.
Joseph Mrak is the chairman and CEO of FolioDynamix, a provider of wealth management technology platforms and solutions.