6 Tech Stack Tools that Drive Growth, Efficiency, and a Great Client Experience

One of the biggest costs for an advisory business is technology. Financial advisors spend between 4% and 6% of their revenue on technology, which is second only to human capital. On top of this, the typical practice uses technology to execute half or more of their processes.¹ Technology is not only vital to everyday tasks, but it also has the power to drive greater efficiency, increased growth, and a fantastic client experience.

You must have the right technology in place to make these things possible. And with technology being such a significant part of your overhead costs, it’s important to get your tech stack right — so you don’t have to regularly reinvest in new options. While every practice will have different tools within their tech stack based on individual needs and goals, there are certain categories that are applicable to all advisory businesses.

Here, we’ll review the categories of tech that are most important to include in your stack, the most utilized options available at LPL, and how to pick the ones that are best for you.

1. Customer Relationship Management (CRM)

The majority of advisory offices say their CRM is the center of their operations, and with good reason.¹ Yes, it’s an effective way to store client data but it can also help you execute automated workflows that create incredible efficiency.

This means that a larger task like client onboarding can have all the embedded steps in a well-defined workflow, providing an automated experience for your team. You can build repeatable processes, enabling you to complete tasks more quickly and with less human intervention. Your client gets an ideal experience because nothing is missed.

When selecting a CRM, consider how you want to use it — do you intend to simply use it to track client notes and their information? Or do you want to leverage it in more customized ways — or even for team management? The answers to these questions will help you select the system with the right mix of features for your business.

2. Investment Management Technology: Risk Tolerance, Analytics, and Proposal Generation

Investment management technology helps you create the appropriate portfolio for your clients and explain your strategy to them. By having the right technology in this space, you’ll be able to ensure clients fully understand how their goals are connected to the approach you’ve designed, and correctly set their expectations for portfolio performance in the future.

You’ll want to find a system that matches up with your investment philosophy and provides the type of analysis and output you like to use when talking to clients about their portfolios. It’s generally best to use a single system for all three functions so you’re not re-entering data multiple times and cobbling together a presentation for the client using different sources.

If done correctly, proposal generation can be a great growth tool, as it enables you to demonstrate to prospects how and why your approach may be better suited for them than their current portfolio.

3. Performance Reporting

Performance reporting software can help enhance your client experience and explain to clients not only how their portfolio is performing, but also how their assets are allocated. By having the right performance reporting software for your investment philosophy, you can ensure clients are considering — and better understanding — their overall strategy, rather than just viewing performance in light of the current market movements. This reinforces the value you’re providing to them and creates stronger relationships.

Without the right reporting software, you may be left talking strictly about the numbers they’re seeing in their statements each quarter — which can result in clients zeroing in on the wrong things (i.e., short-term movements rather than long-term strategy).

When selecting the right performance reporting software for you, first determine how you want to talk about performance with clients, as well as which information you’d like to show them. Then choose the one that aligns the best.

4. Financial Planning Software

Financial planning has become more critical than ever for advisors who want to appeal to new clients. In fact, according to a recent Spectrem Group study, 92% of investors currently want financial planning, and just 59% are receiving it today.² What’s more, investors want in-depth planning that involves a documented process and strategy. And that requires financial planning software.

Financial planning not only sets you up to grow, but it also enables you to provide an unsurpassed experience to your existing clients and potentially deepen your relationships with them. You can tap into these possibilities by choosing the financial planning software that fits with how you’d like to use planning in your practice.

When choosing financial planning software, focus on the level of planning you want to do, how you want the analysis to occur, and what type of output you’d like to have for clients. For example, some options base analysis on and drive toward clients’ goals, whereas others look at cash flow — and still others can do both.

Also, consider how you prefer projections. Do you prefer a Monte Carlo format, or straight-line projections? Last, some software may be better suited for those who want to go in-depth into serious planning like estate, tax, or charitable, whereas others are great for those who want to primarily focus on retirement planning.

5. Document Storage

With clients becoming more tech savvy by the day — and security becoming a bigger issue — digital document storage is now critical to every business, including financial advisory businesses. Digital storage enables you to safely file documents online, which means they’re easy to find, search, share, and protect. You can access them anytime, anywhere — and so can your clients. As a result, document storage systems can be a huge time saver and even help you provide a better client experience.

The primary consideration when choosing a document software is the level of sharing capabilities you desire. Some are designed more for in-office storage and sharing, whereas others allow for sharing externally with clients. A few even offer the ability to collaborate with clients. This could be useful if you want clients to actively participate in creating plans, meeting agendas, and other documents. Of course, you’ll also want to ensure that any system you choose has robust security and meets your compliance tracking requirements.

6. Client Communication & Management Tools

Investors have become comfortable using digital tools to interact with friends and family, as well as businesses and professionals. Your clients are likely doing things like texting with their dentist, scheduling doctors’ appointments online, and moving money on a banking app. You can also extend this type of experience and give them greater access to their information in a way that’s convenient for them. As a result, you can further enhance their experience with you and deepen your relationships — often driving growth. Depending on your approved compliance capabilities, you may also be able to extend  this type of experience and give them greater access to their information in a way that’s convenient for them.

Bonus Options: Niche-Based Technology

The six areas outlined above are those that are critical to a financial advisory office in today’s world — but there are other pieces of technology you could add to your tech stack based on your individual niche that could help you pursue your personal business goals. Here are some examples:

• Marketing goals – If you’d like to drive client engagement or prospecting, you might invest in social media schedulers, marketing content tools such as LPL's Digital Marketing Platform, or even lead generation software.
• Increasing your efficiency – If you’re really focused on efficiency, you might want to look into LPL’s Meeting Manager to help you streamline meeting planning, as well as something like Holistiplan,* which can help you easily identify tax-saving opportunities for your clients.

Depending on the area of focus, some of these systems can drive growth, efficiency, and an enhanced client experience.

How to Choose Your Tech Stack

Technology can do some pretty fantastic things for your office — such as enabling you to spend less time on operational tasks and more with your clients. It may even enable you to offer financial planning in a streamlined way, allowing you to quickly ramp up your value to existing clients. However, if not selected properly and implemented fully, technology can be more frustrating than anything else. And with so much out there, it can be overwhelming to choose.

Consider going through three quick steps to help you determine what you want and need:

1. Look for gaps that technology could fill
2. Identify time-intensive opportunities that technology could automate
3. List key features that you want — or don’t want — to have in your technology based on your personal philosophies or niche

Once you have this information, go down the list of technology areas above in this article, and select the right one for you from each category. If you’re newer to technology, the industry, or simply want an “out-of-the-box” tech stack, LPL’s ClientWorks can be a great starting point for LPL advisors, as it provides a CRM, risk analysis/proposal generation capabilities, client reporting, and light goals-based planning via Client Goals.

When you have the technology onboarded, dedicate the time to learning it and fully implementing it. Many advisor offices have the right tech stack in place, but then don’t utilize all the available features. As a result, they aren’t capitalizing on the time and money they’ve spent to get the software. If you put in the time up front, you’re likely to save hours on the back end and gain even more time to spend with your clients.