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Building a Successful Tech Ecosystem in Your Practice

Practice Management

Choosing the right technology and integrating it into your practice smartly can turbocharge your business. At an April 4 workshop session at the NAPA 401(k) Summit, three tech-savvy execs explained how.

The session, moderated by Tom Kmak, CEO of Fiduciary Decisions, featured Petros Koumantaros, financial consultant with intellicents (as well as managing director/CEO of Spectrum Pension Consultants and co-founder and chairman of GroupIRA) and Robert Gibson, VP, Platform at HUB Retirement & Private Wealth. Koumantaros focused on technology issues at the advisory-practice level, while Gibson provided the home office perspective.

One of the issues that Koumantaros faces repeatedly in his businesses is that technology sometimes can be a hindrance—something is not designed correctly at the time of launch or you don’t consider downstream data integrations. “Ideally, you’re entering data once and only once,” he said, “and from that record of origin, it’s propagating to all of the downstream dependencies that you need.” 

The fact is that we’re not always mindful about the system design and architecture, or the record of origin, he added. “Ultimately, that is going to create tremendous pain on the key constituents that are dependent upon that technology internally—the advisors who are working with clients day to day. And that’s what ultimately takes time away from us to focus on what we do best. If you want to have successful vibrant advisory business, collaboration between the technology side of the business and engaging productively to clients in paramount. You have to have a discussion internally aligned with respect to what your goals are with tech and how it’s going to be best used, and then making sure that the technology empowers the advisors.”

Getting on Track and Staying There

From the home office perspective, analytics must connect to the advisor experience, and every available data element must be captured, tracked and trended, Gibson noted. “I want to be able to empower every advisor inside of my ecosystem to be able to get to those key analytics,” he said. “Those of you who are in the room, you’ve been doing it for years, right? You’ve been saying, ‘I can price this out because I’m going to make an X amount from a wealth management perspective or from a rollover perspective in the advisory space.’ We have to be there doing that too.” 

Gibson listed some of the basic questions that must be answered initially to get on the right track and stay on it:

  • Who are my advisors’ clients?
  • How good are we at supporting them?
  • What support am I currently offering?
  • How are the tools connected?
  • What are our efficiency opportunities?
  • What are my data analytics gaps?
  • What do I want to know about the business?

Down the road, the questions will change:

  • Who do my advisors want to have as clients?
  • How can we be better at supporting them?
  • What support do I want to offer?
  • What kind of scale and time do the connectivity of the tools provide?
  • What stories are the data analytics telling me about the business?
  • How do I apply what I’ve learned?

The Framework

So how do all the disparate systems and applications fit together and form a comprehensive ecosystem? Gibson outlined a model framework to explain how all the components might fit together to create a valuable tech environment.

CRM & Pipeline Platforms

  • Marketing
  • Prospecting
  • Advisor RFPs
  • Account Opening Tools
  • Client Task & Time Tracking

Retirement Plan Platforms

  • Fee Benchmarking
  • Performance Reporting
  • Recordkeeper RFPs
  • Financial Wellness
  • Managed Accounts
  • Recordkeeper Data

Wealth Management Platforms

  • Trading
  • Account Aggregation
  • Financial Planning
  • TAMPs
  • Custodial Data
  • Rollover Compliance

Compensation

  • Client Invoicing
  • Revenue Processing
  • Compensation Tracking

Data Analytics

  • Client Profit Margins
  • Cost of Service
  • Business Risk
  • Sales Opportunities
  • Investment Analytics
  • Recordkeeper & Custodial Footprint

“It’s a wonderful framework, commented Koumantaros. “If it looks a little overwhelming, it really should be, because ultimately all of this stuff is done in disparate systems. What we’re seeing is an evolution in terms of technology, where increasingly disparate systems are able to connect, to empower advisors to do their jobs better.”

Investment of Resources

A strong commitment to investing resources as well as money is another key element in building a tech ecosystem, Kmak pointed out. “You’re delusional if you think this stuff’s going to work right out in the box. It won’t,” he warned. “So you have to invest the time to get it to work right for you. If you don’t have the resources internally, then contracting with external resources to support your requirements and processes is a necessary condition of this. 

“I think the key point here is anyone that goes down the path of really wanting to make technology a cornerstone foundational part of their business and making the technological investments in that business needs to recognize there are going to be additional costs beyond just software licensing. You need to make sure the system ultimately works for you,” Kmak said.

Additionally, open architecture is a critical component of how you look at these systems going forward, Kmak continued. “That means technology that’s designed to integrate. It also means people who are willing to integrate. If you can’t do something yourself, pick a partner that’s going to bend over backwards for you. It’s important to make sure that you’re looking at all the different players in the industry for all the different apps. There are a lot of people out there doing a lot of really good stuff.”

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