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For many, their relationship with technology is a love/hate situation. According to the Pew Research Center, the percentage of Americans using the internet has increased from 53% in 2000 to 93% in 2020(1). Almost the entire American population. Additionally, 85% of those internet users are using smartphones to access the web whenever and wherever they are (2). Clearly there are many people who love technology.

But there are also those who struggle and maybe hate these new technologies. For those of you who fall in that category, you are not alone. In a study done by Pew Research Center, only 28% of adults study could explain and give an example of two factor authentication (3). Furthermore, in a study conducted by OCED, in almost all countries participating in the study, at least 10% of adults struggle with digital understanding (4).

Despite the multitude of people carrying technological literacy baggage, the popularity of using cutting edge technology is permeating into every industry, even finance. According to an annual report by fintech Plaid, 88% of American consumers are using finance technology, or fintech, to monitor and manage their funds from the internet (5).

The term fintech can encompass any technology that is used in the financial industry. This term can refer to the technology used by private investors and clients as well as industry professionals and financial advisors. Understanding the basics of fintech for financial advisors could be what sets your practice apart and brings you to where future clients are.

No matter how experienced and skilled you may be in financial advising and smart investment, you may find yourself falling behind in the ever-changing world of financial technology. That is why I have decided to create this series; to help financial advisors learn of the latest fintech and maybe fall head over heels for them.

This series will consist of several installments, each one going into detail on the importance of different fintech and how these technologies may be leveraged to grow your practice and assets under management. The first topic this series will introduce is a CRM.

fintech for financial advisors

What is a CRM?

One aspect of being a financial advisor is bringing in new customers and retaining current customer relationships. The way in which this task is done is broadly referred to as Customer Relationship Management. This encompasses prospecting, customer service, communications, and sometimes advertising literature.

In the past, Customer Relationship Management was handled wholly by the salesperson. They would write down the details of their interactions with current customers and prospects in their ‘little black book’ or simply commit that information to memory without writing it down at all (6). The problem that firms began to face was that salespeople and prospects would form relationships that could not be transferred if that salesperson left the firm or transferred to different regions. Customer Relationship Management became unsustainable for long term firm goals, and no one likes a business function with commitment issues.

The solution to this problem was the Customer Relationship Management Software System or simply CRM. These CRMs were databases where salespeople would log all their communications with prospects and clients. The creation of this software allowed more flexibility in the practice of customer relationship management. The low-tech concept of customer relationship management was transformed into fintech. All communications between clients and prospects were recorded and available for a new salesperson to review and become a part of that process.

The CRM did not stop at being a record system, they evolved to allow for communication scheduling, contact databases, content storage and distribution, and a means of recording sales success. Today, many modern CRMs handle all aspects of the customer lifecycle from discovery to post purchase support and serve as a crucial fintech for financial advisors.

Reasons to love a CRM:

The finance industry also requires customer relationship management. As a financial advisor, you understand the importance of keeping in contact with clients and prospects. Creating client trust and strong client relationships may be crucial to running a successful practice. Knowing when to call clients, when to email them, and what to say may mean the difference when it comes to gaining more assets under management. Healthy client relationship management may also lead to referrals and further growth of your practice.

Finding The One:

Deciding on what CRM software is right for a financial advisor is dependent on what your specific customer relationship management goals and the firm message you are trying to convey. The first step in selecting a CRM for your practice is deciding on those internal firm goals that will guide your business in the direction you want it to go. The decision process for adopting any fintech for financial advisors will most likely begin this way. Once you have determined those goals, you are ready to start researching specific CRMs and finding your CRM soulmate.

Some features to consider when making your CRM selection are:

1.      The industry experience of the CRM: The amount of experience the CRM software you chose has in your industry can greatly shape the experience you have while using it. The more professionals in your industry that use this fintech, the better it may be for your business goals.

2.      Mobile access capability: Don’t ghost your clients! Being where your customers are and being accessible is essential for financial advisors, so the capabilities of a CRM to move with you can be very important to your client relationships.

3.      Customization level: Depending on your practice’s branding and procedures, you may need to look for a CRM with more customization. More customizations allow you to be nimbler with your firm and have your CRM change when you change.

4.      Budget: No matter how grand and detailed your business goals may be, we are all still limited by the capital it will take to achieve these. It is important to check what assets you have available to budget for a CRM because you won’t be able to split the check on this one.

5.      Phone/video capabilities: Some sales communications are best live, that's why knowing if a CRM allows for live communication, such as phone and video calls, can be helpful in deciding which fintech to go with.

6.      Content storage: How much content does your firm put out? Will you need to house this content, so it is ready to send out through your CRM, following your firm's policies and procedures? These are important questions to answer when making your CRM selection.

7.      Account size: How many clients will you be putting into this CRM? How many financial advisors at your firm will be using the software?

8.      Quality of Analytics: Many CRM generate analytics based on activities. If your business is looking to gain better insights on the client lifecycle, having many analytics could be something you look for in your search for the fintech of your dreams.

9.      Automation capabilities: If you find your sales team stretched thin to service all you clients, automation may be a necessary consideration to make.

10.  Scalability: Finally, when considering a CRM, it is critical to ensure that the software can grow with you. It is helpful to choose a CRM that is sustainable for your firm.

Be sure not to rush into things with a new CRM and take your time getting to know which is the one for you. A good CRM could elevate a practice far beyond the competition and may create long lasting client relationships that could grow you practice and help you reach your business goals.

Topic Ideas?

Is there a fintech for financial advisors that has caught your eye recently? Submit your topic ideas and you may see it in installments in the weeks following.









This communication is general in nature and provided for educational and informational purposes only. It should not be considered or relied upon as legal, tax, or investment advice or an investment recommendation, or as a substitute for legal counsel. Any investment products or services named herein are for illustrative purposes only and should not be considered an offer to buy or sell, or an investment recommendation for, any specific security, strategy, or investment product or service. Always consult a qualified professional or your own independent financial professional for personalized advice or investment recommendations tailored to your specific goals, individual situation, and risk tolerance.

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