Today’s investor is reaping the benefits of digital transformation in their personal and business life. Increasingly, they expect their financial advisor to leverage the latest digital tools, too, and use them to provide a seamless experience. That’s where your financial advisor tech stack comes in.

By integrating your financial advisor tech stack into your firm and process, you’ll build trust with clients through an upgraded experience. You could also grow your business by automating tasks so you can more effectively serve existing clients and reach new ones.

However, the current landscape for financial advisor software is changing rapidly. It now includes a dizzying array of options that make it harder than ever to select the best financial advisor technology tools for your business.

Whereas advisors used to be bombarded by calls from wholesalers offering a new investment vehicle for sale, now it’s vendors with tech suggestions. The field is in constant flux, whether through new solutions that are constantly introduced or mergers and acquisitions of key players. (Michael Kitces’ fintech maps illustrate the vast changes just between 2018 and 2022.)

But, let’s face it – today’s financial advisor doesn’t have time to vet every or even most financial advisor technology tools, and few can afford to invest in every new bell and whistle. Equally, financial advisors don’t want to risk damaging their reputation with clunky infrastructure or integrations that don’t provide the necessary value.

In this essential guide to financial advisor technology tools, we outline what financial advisor software you need, what software you can skip and what really matters to clients when it comes to financial advisor technology.

Article Contents

Financial Advisor Tech Stack “Must Haves”

Think of your must-have systems as the engine of your firm – all of them are imperative to accelerate your business and keep it running smoothly. Given the many choices of software available, it’s vital to define your process before looking for the solution. The goal of a tech stack is to help you work faster and more efficiently so you can service clients better and reach more A+ clients. But, if you lead with the technology, you’re bound to find new problems and are likely to become overwhelmed. Focus on finding the offerings that will automate functions that are not a core competency for your team and free up time for what you do best.

Financial planning software

Financial planning software for advisors should be the cornerstone of any practice. Advisors use it to aggregate financial strategies and build personalized long-term financial models and analyses. Whereas many firms used to choose between financial planning software that was either goals-based or cash flow-based, many tools can now do both.

That’s a vital upgrade because it allows you to provide plans based on how your clients prefer to look at their assets and the stage of accumulation or retirement they’re in. You have to know your clients’ behavioral biases and how they think about money to use the right scenario and communicate with them based on the type of learner they are.

Another important consideration in financial planning software for advisors is whether it prepares projections in a straight line or Monte Carlo format. The latter outlines likely, less likely and least likely outcomes, which can help keep clients focused on the long-term, particularly during volatile markets.

Of course, you want to understand how financial planning software integrates with your existing tech stack. While every fintech will likely tell you they’re integrable, the real question is how much time and resources it will take to make it happen. That’s why you should first define your workflow and process and ask the vendor to show how their solution would fit in that process. Finally, reflect on its ability to truly elevate the experience for both parties. The bottom line is you need your client to be happy, so prioritize collaboration tools and ease of use when making your choice.

Top financial planning software for advisors includes MoneyGuidePro (both cash and goals-based), eMoneyAdvisor (cash), Right Capital (cash) and NaviPlan (goals-based).

Client relationship management (CRM)

Client management software for financial advisors organizes all your customer information, allowing you to forge deeper relationships with existing clients and expand your reach through automation. Your CRM streamlines outreach, lets you manage leads more effectively and helps you track clients by keeping all contact information at your fingertips, along with a record of touchpoints along the way.

However, advisors often expect the CRM to do too much by putting it at the core of their business; they want to fill it with financial planning and other data. But that’s not the role that the best contact management software for financial advisors is designed for. Instead, use your CRM as the launching point, allowing you to prepopulate proposals or other documents with the correct contact information.

Then deploy the financial planning tool, rather than bringing financial planning data into the CRM. CRMs can become quite complex, so consider your needs and skills when making a selection. Out-of-the-box options require little customization and are appealing to financial advisors who don’t want to spend time micromanaging the CRM. Those options include:

  • Redtail
  • Juncture
  • Evestnet | Tamarac

You have more flexibility to tweak settings if your team is strong technically with solutions like:

  • Wealthbox
  • Salesforce

Carson has a nine-person tech team supporting its Salesforce CRM, something most firms can’t manage.

Read more: 3 Ways Advisors Can Look at Technology

Portfolio management, accounting and reporting

This key option handles modeling, portfolio construction, performance reports and more depending on how you choose to use the tool.

There are three main things to look for in this category. First, make sure it connects with your custodian or broker-dealer. While you probably won’t have a problem initially, there could come a time that a product isn’t yet affiliated with a new custodian you work with, so this is something to be aware of. Of course, you’ll want to verify it can integrate with the other systems you’re using.

Second, look at the core features to confirm they support the unique ways your practice handles portfolio management. For example, if you are a highly technical investment shop where you move everyone out of the market when it’s lagging, the solution you choose should be capable of making that change quickly. Or, if you lead with behavioral models, you’ll want one that can move groups of clients into different strategies based on different sections of your personas. Finally, consider the types of customization your software offers for client reporting to verify it’s as robust as you need. Again, refer to your process map to ensure you prioritize the right options.

Top software in this class includes:

  • Orion
  • Envestnet
  • CircleBlack
  • Addepar
  • InvestCloud

Financial Advisor Tech Stack “Should Haves”

If the must-have software is the “engine” of your firm, regard the “should haves” as integral upgrades that promote a better experience. They would be your car’s entertainment system and heated seats. Here are the software types in this category.

Document management

As we continue to move away from paper overload, document management will eventually transition into the “must have” category. Advisors must collect so much information to build substantial financial plans and investment recommendations that clients rely on. If you don’t offer powerful uploading capabilities, they have to send this very personal information through email, which can raise identity theft and privacy issues.

While DocuSign is a common program in most industries, there are other programs that are also specifically designed for wealth firms, such as Egnyte, Docupace and eFileCabinet.

Risk tolerance and investment analytics

Most advisors have their own philosophical approach to risk, so you want to find a software that aligns with your beliefs and can be adjusted for your clients’ preferences. As with the other pieces of your tech puzzle, confirm that it integrates smoothly with the rest of your tech stack as you use it to identify, quantify and mitigate risks according to your standards and preferences. Risk and analytics should work together, so you can make a recommendation to your clients based on several factors. Popular software options includes Riskalyze, MorningStar, Envestnet and Orion.

Financial Advisor Tech Stack “Nice to Haves”

Farther down the list are those financial advisor technology tools which are helpful, but can be lower priority based on your firm’s niches – these are the equivalent of a top-of-the-line in-car sound system for audiophiles or extra cup holders and sliding doors for a kid-focused ride.

Your decision over what to include here will be based on your technical know-how and how much capital you have to purchase add-ons, like special planning options or marketing software for financial advisors.

Here again, you’ll make more solid choices if you document your process, find the gaps and buy solutions that provide the automation you need. Select these additions based on how you specialize your practice and which ones will allow you to understand your niche more thoroughly or contribute elevated service in a particular category. For example, a firm focused on tax planning might choose to invest in technology that produces a quick snapshot and overall recommendations on all clients’ tax situations, allowing the advisor to focus on the top tier who need more holistic tax planning.

Read more: 3 Ways to Attract the Modern-Day Investor in a Changing Financial Services Industry

Common options include solutions that support a variety of financial planning strategies, based on those that best meet the needs of your typical client, such as a practice that focuses on estate or retirement planning, or a value-add function like stress testing or asset mapping.

There are also programs that allow you to run your business more efficiently. These can include client portals or personal financial management software, as well as marketing software for financial advisors such as email outreach, social media tools, lead generation and more.

The options for software here are nearly endless, given that many are non-industry-specific but pervasive in many fields. Hootsuite, for example, is a well-known aid for any company’s social media management, while top contact management software for financial advisors, such as Mailchimp, is used across verticals for newsletters and updates.

Other helpful options might include an archiving tool and compliance monitoring such as Smarsh and Erado that can scan both client communications and archiving.

Finding Synergy in the Building Blocks of your Financial Advisor Tech Stack

As you determine what financial advisor technology tools to adopt, your first question will be whether you want to choose hybrid or “all-in-one” solutions. A holistic approach might appear to be the best option since you’ll know everything is integrated and designed to work together. If you go that route, Orion is one company to consider given its many acquisitions that have contributed to a solution that may suit your needs.

However, it’s unlikely that an all-in-one financial advisor tech stack will offer everything you need. That’s when you’ll likely start thinking about the best way to acquire the right programs so they integrate seamlessly, which leads us to the question of…

Buy, Build or Partner?

Once you realize the building blocks you need to have in place, you probably are wondering how to acquire them. Let’s walk through the three main options.

Considerations for buying

An off-the-shelf creation might seem to be the ideal, and it certainly can be a good choice for smaller firms that lack the technical know-how or in-house expertise. In fact, for some advisors, the broker-dealer or custodian program might even offer enough in the way of CRM and portfolio management to suit your needs.

For many others, though, buying is unlikely to provide the optimal customer experience they seek, given the limited options for customization and integration. This can also make it less sustainable, particularly as you grow.

Before sourcing options, you’ll want to clearly delineate your process to ensure vendors are providing what you need. And remember that ongoing maintenance may not be included and can add up in terms of fees – and likely staff time.

Considerations for building

A larger firm with a deep bench of IT talent may decide that building is the best way to offer a bespoke solution. This way, they can get exactly the performance and all the appropriate features they want, which is only truly possible with complete control and customization.

Before embarking on such a project, though, it’s key to recognize the investment this undertaking will require in both time and financial resources. It can take years to build what you need, and with technology changing as fast as it does, the last thing you want is to put effort behind something that quickly becomes obsolete or lacking in essential functionalities. And even when it’s finally complete, any system you build requires continual maintenance.

Considerations for partnering

Going the partnering route often appeals first to smaller firms, but it works well for firms of all sizes since it allows more integration and control than buying an off-the-shelf product. However, note that while you will have some control over the “nice to haves” you add on, you may have to give up choice on the “should haves.”

Tips for making a decision

As you debate the pros and cons of the three choices, return to your “why” and consider the part of your process that would be most beneficial to automate. Then acknowledge your team’s core competencies and their appetite for diving into a tech integration.

Partnering often works best when you know what you want – for example, you’ve scanned the marketplace and you know you’d prefer if Software 1 talks to Software 2, or you want to create a holistic experience but don’t have the skillsets on a team that isn’t necessarily tech-focused.

Embracing the Big Picture of Technology

Adopting the right financial advisor tech stack allows you to make better recommendations and ultimately reach more people with upgraded service as you automate routine tasks. However, as you scrutinize financial advisor software, remember the focus has to be on a smooth encounter. Your technology should supplement the value you bring, rather than replacing your involvement. You want your solution to allow you to continue to “own” the experience, while realizing you can’t possibly be part of every conversation.

In the end, you don’t want it to be about the specific financial advisor technology tools you’re using, but about whether the experience you’re providing is delivering the value clients expect.

Today, this program might talk to that program with no problem, but in the next five years, there might be 10 new names and products available with the way the fintech category continues to explode. That’s why it’s wise to start with the result in mind: Identify your needs, research financial advisor software solutions that meet them, and determine whether your resources are best suited to buying, building or partnering.

And then, let the financial advisor software do what it does best while you focus on the unique value only you can provide to your clients and prospects.

Want to know more about what’s driving the success of today’s fastest-growing advisors? Subscribe to Carson’s newsletter, The Trend Line, to help grow your business today.

AUTHOR

Andrew Rogers

Senior Product Manager
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