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CRM for Investment Advisors
How do you maximize your ROI?
Everyone that runs a business has some form of system to manage client relationships. It may be as simple as a Rolodex file, with cards that record interactions and markers to highlight key information. But such a system has its shortcomings. It cannot share knowledge easily with other members of the team or with other organizations. It cannot automate routine workflows, generate management reports or integrate to back office systems where important client information resides. And it cannot adapt to business changes and be readily modified.
To compete in today’s highly competitive market, wealth advisors need an effective Client Relationship Management (CRM) system to attract and nurture high quality clients and referrals. They need one that can enable them to execute on business strategies on a more consistent and cost-effective basis. They need to grow the business and improve client retention, without increasing costs.
What drives a high ROI in a CRM system? It is a combination of two elements: Technology and Strategy.
1. TECHNOLOGY
From a technology perspective, a CRM system must meet key requirements including:
Ease of Use – A familiar user interface and ease of use drives adoption by investment advisors, which in turn means that information is easily captured and shared, enhancing ROI.
Adaptability – As an advisor’s business is constantly changing with new approaches, new client requirements, changes in regulations or shifts in the investment environment, the CRM system must also be able to change to support the business, otherwise it will fall into disuse. How much effort is required to change your CRM system to suit your needs? If programmers or costly consultants are required, changes may be possible but expensive to make, compromising ROI. High ROI depends on easy-to-use configuration capabilities that don’t require programming skills.
Openness – In today’s environment, a CRM solution must perform multiple functions that may be impossible for any one vendor to supply. An open CRM technology that has been embraced by a large number of solution partners provides clients with the option to choose best-of-breed add-on components, without jeopardizing vendor support. ROI is achieved by avoiding custom-built functionality and licensing prebuilt solutions. Many firms underestimate the cost of supporting custom functionality, including code modifications to support new releases of the core CRM.
Integration Capabilities – Most firms want to provide their advisors with a single view of a client and his/her household so they can effectively engage with and respond to the client. A published Software Developer Kit (SDK) and defined Application Programming Interfaces (APIs) provide the tools to deliver a 360-degree view on a cost-effective basis and help minimize ongoing support and upgrade costs.
Workflow Engine – One of the most significant areas of productivity improvement is the use of workflow engines that are included with leading CRM solutions. A workflow is simply a series of steps that are completed when an event is triggered. The workflow is designed to have intelligence to determine the steps to take, based on the evaluation of certain conditions. Workflows can support Advisor Service models to automate routine processes such as Client Onboarding, Account Opening or Account Closing and Client Reviews, saving the advisor and the team time and effort that can be better spent working with clients and building the business.
Workflows can help ensure consistency of processes by eliminating the need for the advisor to monitor for specific conditions. For instance, a client review can be triggered based on the last review date and the review frequency determined by the advisor. Planning tasks can be created for the advisor’s team and assigned to various team members. Overdue tasks can trigger alerts for follow-up action, ensuring no client ‘falls through the cracks.'
2. STRATEGY
ROI can be achieved through various business strategies, unique to each firm, that leverage the capabilities of the CRM software. Many of these strategies center around two priorities:
Client Retention – Clients recovering from the downturn of 2008 are demanding higher levels of service from their advisors as they monitor their investments more closely to understand market factors, performance and portfolio construction. Enhanced yet simplified client reporting is key to rebuilding investor confidence as investors re-enter the market and look for greater transparency and visibility to their holdings.
At the same time, wealth firms and their top advisors are also faced with a shortage of qualified and experienced personnel, and greater competition for assets from sources such as ETFs and online brokerage accounts. Cost of delivery of investment services is now more of a factor in the client’s decision-making process. The move away from a transaction-based business to a fee-based model makes client retention imperative, to build the advisor’s recurring revenue base and book of business.
A CRM system can provide an advisor and their team with more arms and legs, without adding staff and cost. Providing the 360-degree view of the client, including relationships, centers of influence, assets and interactions enables the advisor to have the same view of the client as the client does, making it easier to stay in sync and be responsive to needs. What’s more, the ability to share that information across an advisor team results in better, more cohesive client service.
Client Acquisition – Advisors must also build their book of business by uncovering hidden assets, attracting higher quality referrals and nurturing relationships with prospective clients. This is best achieved when the advisor can deliver targeted marketing to defined groups of investors and then track the results of the marketing effort. By tracking and proactively managing leads generated from educational or social events, the advisor can transform a prospect into a client. Workflows based on Advisor Best Practices can automatically trigger logical next steps in acquiring a client to ensure an advisor’s marketing efforts are executed on a consistent basis. An effective CRM should make such information accessible to everyone on the advisor’s team.
Consistent and predictable business development best practices embedded into the CRM system can drive greater client acquisition rates on a consistent and predictable basis. For example, the client has agreed to move forward, the client onboarding processes built into the CRM can ensure all the firm’s compliance requirements are met without undue effort by the client.
Maximizing ROI from a firm’s CRM system acquisition does require effort and commitment by advisors and their senior management. But by focusing on key aspects of technology and business strategy, investment firms can achieve a predictable ROI.
About Salentica Inc. Salentica, a Microsoft Gold Certified Partner, specializes in CRM solutions for wealth management firms. Built around the Microsoft Dynamics CRM and SharePoint, Salentica solutions extend the platform by creating purpose built components to address specific needs of wealth managers, RIAs and Family Offices. Headquartered in the heart of the financial district in Toronto, with an office in New York, NY, Salentica has more than 70 clients across North America.
Salentica Contact: Bill Rourke, President
416-366-3456 Ext. 222
brourke@salentica.com
