RIAs should do thorough internal reviews of their back office technology infrastructure, Larissa Sonnen writes on Advisor Perspectives. They should look at how each system is used, the way they work together and if new ones are needed, she writes.
Revamping Back Office Systems Doesn’t Have to Be Scary
The review should cover the CRM, client portal, trading and rebalancing systems, custodian interface, as well as performance reporting, portfolio accounting and financial planning platforms, according to Sonnen, chief operating officer and co-founder of PFI Advisors.
The firm’s staff should examine how often each back office system is used, whether systems are used as intended and whether the RIA’s current technology is intuitive and user-friendly, she writes. Additionally, advisors should check how much time it takes to correct data that should have transferred between systems and that current system integration reduces duplicative, manual data entry, according to Sonnen.
To maintain efficient and automated workflows, RIAs should conduct these reviews at least once a year, she writes. Minor adjustments are typically needed, but examining the function of each system and their connection to the wider RIA ecosystem in depth is worth doing properly, according to Sonnen.
Revamping a technology suite can be intimidating and RIAs often avoid due to the fear of new, expensive technology or the possibility of having to get involved with more complex systems, she writes. But often, the solution could be to simplify current systems or remove legacy technology entirely, according to Sonnen.
If an update is needed, it should further automate tasks and free up advisors and employees to cater to existing clients and develop new client relationships, she writes. Additionally, a proper infrastructure can allow firms to compete in the highly competitive M&A space, according to Sonnen.
Regardless of an RIA’s growth strategy, technology infrastructures must be used to cater to increasingly sophisticated clients, she writes.
