Any issue with platforms at the client level has the risk of reflecting badly on advisors, who in turn potentially will turn their anger and frustration over balky or slow technology against their business partners.
With advisors less sticky than ever, firms need to be seen as delivering for their advisors, especially in the sizzling hot RIA space, where advisor recruitment continues apace, and firms consolidate through M&A. In this landscape, where even small details can make a big difference for advisors, the hidden world of back-office technology can be a key to growth and expansion.
Moreover, even if back-office inefficiencies are completely invisible to clients and advisors, they can still come back to bite firms. A single process done 1% less efficiently once is no big deal; but repeat it millions or even billions of times over the course of a year, and the lost profits of that inefficient process could mean that real strategic priorities don’t get considered, or even imagined.
Not Glitzy But Crucial
Don’t get me wrong. The front-end of the tech stack will still get all the attention in financial services ads and industry media headlines.
But at a time when every wealth management firm has become, at least in part, a technology company, and clients have been conditioned to accept nothing less than a smooth, seamless and convenient experience, a firm’s success hinges on being able to execute every process efficiently, especially the ones that are behind the scenes.
Firms need resist the flashy “next big thing” and think more strategically about their technology investments. The efficiency of back-office technology, though not the glitziest competency, will be a crucial differentiator for firms, and it will only grow in importance for advisors and their clients.
It’s not a matter of if. It’s a matter of when.
Greg Beltzer is Head of Technology for RBC Wealth Management, a wealth management leader who serves more than 2,100 financial advisors operating in 182 locations in 42 states. David Knoch is CEO of Docupace, a solutions provider focused on digitizing and automating operations in the financial advice and investment industry.