For some advisors, nothing brings success like finding the right technology.

    Many factors account for success in the financial advice business, say studies by Moss Adams and others.
Superior marketing strategies, personnel hiring and management and client services all contribute to success. But for some advisors one factor less often cited has, above all else, accounted for astounding gains: the discovery and wise use of technology. Becoming more technologically sophisticated has moved these advisors more quickly along the road to success and rising profits than any other single factor.

What advances have had the greatest impact on their success, and could they work the same magic for any advisor who adopts them? We asked over a dozen tech-savvy advisors to share their secrets, and the duplication we found in their lists suggests the answer to the latter question is a resounding "yes." What do they know that you don't?

The Impact Of Technology

Two kinds of technology tend to impact advisors. The first is the "killer app"-that one application that solves a problem so big that it, alone, accounts for measurable and sizable gains in the advisor's practice. Killer apps can be costly and labor-intensive to implement, but once advisors understand their potential they willingly take on the task.

The second technological impact comes from the "indispensable utility." This is usually inexpensive and easy to use and, while of lesser impact than the killer app, its usefulness so far outweighs its cost that it is, well, indispensable.

Our sources repeatedly referenced three killer apps or, more accurately, three technologies, which have had the greatest impact on their success: the paperless office, iRebal and build-it-yourself applications.

Killer App No. 1: The Paperless Office

Thom Hall, a partner with Financial Strategies Institute in Midvale, Utah, began setting up his paperless office in 2001. He acquired a high-speed scanner, PaperPort http://www.nuance .com/paperport/ scanning software, an eFax line and a Copytalk account for on-the-fly phone dictation. (Copytalk automatically transcribes your dictation into text delivered to your e-mail in-box; a free utility called Jott does almost the same thing.)

And to protect the files created from all his paper, Hall installed a RAID hard drive system, a carousel tape backup drive and external hard drive backups he keeps offsite, rotating weekly. (Just as the concerned business owner might protect his paper in fireproof file cabinets, digital documents must be protected by the appropriate backup technologies.)

"These changes have had a dramatic effect on our practice," says Hall. "We access files more quickly, we freed up many file cabinets and the space they require and we protected ourselves from one potentially disastrous hard drive failure by having redundancy in our backups."

The reasons why paperless offices are giving advisors such great returns on investment are both top line and bottom line. On the top line, a paperless office enables faster responses to client needs because critical information that feeds the advisory process is so much easier to find in digital files accessible through search engines than in paper form. Better client service equals more business and increased revenues. At the same time, efficiencies realized through faster data searches and the ability to eschew common paper-related tasks like filing and copying cut costs-often significantly.

Several advisors cite Worldox, a component in some advisors' paperless office implementations, as a killer app unto itself. What Worldox does is provide a consistent means of filing and later retrieving all documents captured through paper scans or other sources. Says Sarah Buenger, CFP, an advisor with Briaud Financial Planning in Bryan, Texas, "Worldox has allowed us to accomplish more work in less time, ultimately providing freedom to manage more clients with the same or less resources." Of the transition to a paperless office, she adds, "Initially, the thought of instituting such a huge change was intimidating, but we stepped out of our comfort zone and grew tremendously as a result."

Mike Palmer, a principal with The Trust Company of the South, with offices in Burlington, Raleigh and Rocky Mount, in North Carolina, installed Worldox just last year to solve the problems his firm was having sharing information among three locations. "Before Worldox, we used a VPN and simple Windows drives," says Palmer. "If I was in our Raleigh office and wanted to find something in our Burlington office, it was nearly impossible. What Worldox did was force a filing conformity on us that was lacking before."
Rest assured that none of these advisors wishes he was still using paper files to conduct business.

Killer App No. 2: iRebal

Traditionally the rebalancing process has been one of the greatest inefficiencies in the practices of advisors who not only do financial planning but also manage their clients' investments.

Widely used portfolio management software products such as Advent and Centerpiece brought tremendous gains in the 1980s to advisors who reported portfolio positions to clients with manually constructed spreadsheets. Concomitantly, custodians built technology platforms simplifying the process of uploading trades. Yet once these efficiencies were realized and eventually taken for granted, advisors became keenly aware of one gap in the management process that seemed particularly resistant to modernization: rebalancing.

The investment management process is a circular one. The advisor reviews the client's investment positions, formulates trades to bring the investments into line with the asset allocation strategy and uploads the trades to a custodian. After some predetermined period, the client's investments are newly reviewed and the process begins all over again.

The first and third parts of the process might have become automated, but the rebalancing part was, for many advisors, still stuck back in the spreadsheet era. Not only was rebalancing done independently of trading and reporting, but many advisors failed to grasp the intricacies of tax-efficient rebalancing anyway. In response to this need, Gobind Daryanani, CFP, Ph.D., developed iRebal in 2005.

Upon learning of iRebal and seeing it demonstrated at industry conferences, advisors grew increasingly excited. Upon learning of its $50,000 purchase price, they lost some of that excitement. Yet many have implemented it anyway, because the efficiency it brings justifies its price. (Reputedly, iRebal can speed up the rebalancing process from 18 minutes per family of four accounts to 500 clients and their accounts in just 30 minutes.)
Confirms Michael Kitces, director of financial planning for Pinnacle Advisory Group in Columbia, Md., "We're tactical asset allocators, and thus shift our portfolio models to move amongst asset classes, sectors and industries. iRebal allows us to execute our entire trading strategy in a way that's both radically more efficient and higher-value for our clients, for whom we're able to get better execution."

Adds Pinnacle's Senior Portfolio Analyst Rick Vollaro: "iRebal lets us manage our entire trading operation, involving 550 clients [and all their accounts], with just one employee. Before iRebal, we had three full-time traders and still had instances when a full block trade for a portfolio change could take a week or more, depending on how complicated it was. Today, it takes a few hours for the program to run, and then a few hours for the trader to execute the trades." Not only that, but Pinnacle's "extra" traders were freed up to advance their careers by becoming full-time analysts for the firm.

Other advisors are finding ancillary benefits, as well. Mark Willoughby, a principal with Greenbaum and Orecchio Inc. in Old Tappan, N.J. says, "We purchased iRebal before the point at which it made economic sense for the firm, but we felt confident that, with the growth our firm was experiencing, the operational benefits that would accrue from installing a centralized, rules-based rebalancing system would outweigh its cost of purchase and installation. Not only did we realize the operational benefits and efficiencies we projected, using iRebal encouraged us to reduce the list of products we use from 180 down to 30, minimizing our due diligence requirements. And it puts our firm in a strong position to be able to handle any market dislocation, such as the aftermath of September 11th. We are confident we can rebalance all client portfolios and upload the resulting trades in less than a day; if we had to rebalance manually, it would take three or four days to get through our entire client base."
Just be aware there's a certain scale necessary to make iRebal worthwhile, says Kitces. "Ideally, a firm should be ready to hire its second staff trader so it can realize the value of having one trader plus the software in lieu of two traders."
And, given the high cost of labor, that's a trade-off most advisors will readily accept.

Killer App No. 3: Build-It-Yourself Apps

Sometimes your killer app is out there, ready to be purchased and adapted to your practice, and other times it sits on your own personal wish list waiting indefinitely for someone to create it.

Michael Joyce, owner of JoycePayne Partners in Richmond, Va., and Bethlehem, Pa., had for years shared with several colleagues a common vision for a customized CRM system that would bring long-sought efficiencies to all their practices. Mary Malgoire of The Family Firm in Bethesda, Md., and Cheryl Holland of Abacus Planning Group Inc. in Columbia, S.C., joined with Joyce and an independent programmer/consultant to build AdviceFlow, the name they gave to the CRM creation that they've all been using since 2004.

"Although management guru Michael Porter claims operational efficiency is not a competitive advantage, our firms' development and implementation of AdviceFlow has been the single biggest factor in our productivity gains and greater profitability," says Joyce. "Not only is the CRM component top-notch, but the workflow capabilities have streamlined our processes and the management reporting has enhanced accountability and my ability to measure our productivity."

What did it cost Joyce, Malgoire and Holland to create AdviceFlow? They didn't want to comment on what they've invested to develop the system, but they do feel the investment was worth it. Would they build the system again? Absolutely.

Joel Javer, a principal in Sharkey, Howes & Javer Inc. of Denver, encountered a similar need when, like Kitces, he became keenly aware of the low productivity associated with his firm's investment rebalancing process. Instead of springing for iRebal's demanding price tag, though, he developed his own tool, eAllocator (, which, unlike AdviceFlow, is available for purchase by other advisors. "eAllocator has allowed us to increase the timeliness of portfolio reviews, it's greatly reduced the time it takes to rebalance our model portfolios and it's eliminated trade errors. It allows us to change model portfolios and rebalance 1,000 client portfolios in about three hours, generating trades that go directly to their respective custodians. If any of the trades produce a short-term capital gain, mutual fund redemption fee or custodian short-term fee, eAllocator shows these trades on a separate screen to be viewed and reconsidered," says Javer.

Has eAllocator made Sharkey, Howes & Javer more efficient? If technology replacing human labor equals efficiency, then "yes" is the answer. "This tool has eliminated the need for one and one-half employees," says Javer.

The Indispensable Utility

So we've seen what happens when a firm commits lots of dollars, lots of manpower or both to the revamping of its weakest technological link. What do we do about all of those niggling little problems that could be solved if only there were some simple, cheap technology available to do the job? Maybe there is.

Our tech-savvy advisors listed an array of utilities they use to remedy some universal dilemmas, such as creating a backup disaster plan, establishing remote connections for those out-of-office adventures and controlling the costs of technology as their service teams grow. Certain utilities, just like our killer apps, showed up on advisors' lists more than once.

Backups And Your Disaster Plan

Using the word to define itself, Webster's Dictionary says a disaster is an "act that has disastrous consequences." That definition covers a lot of ground, especially when talking about computer backups.

What if ... your server's hard drive just up and quits, the backup file you need to restore is just as corrupted as the file you want to replace, or you lose two hours of work you started earlier this morning to a power surge? These are all disasters, albeit some are worse than others. But the point is you're more likely to survive them if you employ more than one kind of backup.

In addition to the standard in-house backups to tape drive, CD, DVD or external hard drive, advisors are finding a "backup to their backups" on the Internet. Once considered too expensive for many small businesses, Internet backups have come down in price. Charley Kanieski, a CPA in Port Townsend, Wash., uses iBackup, a service that can back up his data over the Internet for as little as $99.50 per year for five gigabytes (GB) of storage memory or as much as $2,999.50 per year for 300 GB.

Ken Robinson of Practical Financial Planning in Cleveland started with Iron Mountain at about $300 per year but has since moved to Carbonite "Carbonite has a far simpler interface and costs only about $50 per year," says Robinson. Michael Donahoe of On Course Financial Group LLC in Portland, Maine, uses a similarly priced Internet solution called Mozy
Try to understand the many ways backups can fail you, and then you'll be equipped to look for the multiple backup solutions needed for comprehensive protection.

Remote Connectivity

It may not be the wisest thing for preserving one's mental health, but that's beside the point: Advisors are clamoring for remote connectivity solutions. Yes, remote computing solutions allow advisors to work 16 hours a day instead of just eight or ten, but on the other hand, they may also spend more time with their families knowing that clients or employees can find them when necessary.

Our sources' most often cited utility for remote connectivity was GoToMyPC Says Robinson, "GoToMyPC is the one technology that has made the greatest change in my day-to-day operations. My out-of-state virtual assistant creates investment work sheets and client tax returns for me, remotely dropping them onto my computer when completed." Adds Donahoe, "With GoToMyPC, I no longer lug my laptop through airports since I can use a hotel business center or a Kinko's if I need to check in."

GoToMyPC is an Internet-based software that allows one computer to take over the operation of a remote computer or swap files with a remote computer, and costs a single user $19.95 a month.

But GoToMyPC is just one take on the remote computing experience; there are many complementary options, such as virtual receptionist technology. Scott Floersheim of Meridian Wealth Advisors LLC in Albuquerque, N.M., uses OneBox, a unified messaging solution. "I can receive faxes and voice mail through Microsoft Outlook," says Floersheim, "and OneBox has the usual auto-attendant, 'find-me' and 'follow-me' features so that my availability to clients is unrelated to my physical location."

InsynQ represents yet a third version of remote connectivity. A favorite utility of Milo Benningfield, owner of Benningfield Financial Advisors in San Francisco, InsynQ provides him with a "virtual desktop" hosted on a remote server that effectively gives him a "wide area network without all the cost and headache of an on-site server." And it's a disaster-recovery plan too, says Benningfield. "It makes centralized document storage a snap. And most important, it makes it easy to continue to grow and add employees, located anywhere, without having to worry about how I'll accommodate them on my network. All I need to do when adding a new employee is purchase a new user logon."

Controlling Hardware Costs

We've said a lot about software and Web-based applications, but nothing about hardware. Yet as firms grow and new employees must be given tools and equipment to do their jobs, hardware costs can rapidly get out of hand.

Paul Baumbach's solution to this is the work group printer/copier/scanner. "Last year we upgraded to a Konica Minolta BizHub C250 /km/colour/c250/, which allowed us to reduce the number of desktop scanners and printers we use. Each employee can scan what he needs with the result showing up in his in-box on a shared drive."

Baumbach says this hardware solution allows his firm, Mallard Advisors LLC of Newark, Del., to avoid the high costs of individual scanners and printer ink, plus the work group scanner doesn't slow down employees' individual computers as do individual scanners.

The sum total of all these killer apps and indispensable utilities is a better business and a better life, which should be enough to make even the most computer-illiterate advisor sit up and take notice. The wise application of these technologies-as our tech-savvy advisors have shown us-can put information at your fingertips, slash the time it takes to complete unavoidable back-office tasks and give you complete mobile freedom, none of which were available ten years ago.

Are you on board? 

An independent financial advisor since 1981, David J. Drucker, M.B.A., CFP, has been an industry influential for many years. Learn about his books, public appearances, Practice Lifecycle, Virtual Office News and the annual "Technology Tools for Today" Conference at