How Wealth Management Firms can Create the Ultimate Experience with Best-of-Breed Technology

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This article was published in collaboration with Mako Financial Technologies and PureFacts Financial Solutions.

Technology sits at the intersection of every area in modern wealth management.  

Technology’s “role” in the industry shows no signs of slowing down either. Actually, the opposite is true; we know first-hand through our collective relationships (PureFacts, Mako, AppCrown, FutureVault) that institutions and firms are embracing and investing in technology more aggressively. All with the common goals of creating a competitive advantage and delivering more value across the enterprise, to advisors, and to their clients. 

Arguably, one of the most significant changes we’ve seen over the last year comes down to executive buy-in

Executives, from firms of all sizes, might we add, are seeing the writing on the wall; and it’s hard not to, it’s everywhere. In order for their institution and/or firm to scale, create efficiencies, and attract and retain ideal clients (and their next generation), partnering with technology solution providers is a critical strategy.  

The question isn’t should firms embrace and invest in technology; that’s an absolute must. The questions that need to be asked and addressed are: 

  • ➜ How exactly should firms implement technologies? 
  • ➜ Where in the organization does technology create the most impact (or where is the opportunity)? 
  • ➜ What technology solution providers should firms invest in and partner with?
  • ➜ Do our solution providers “play well” together and can they connect disconnected workflow?  

The answer to those questions, as you might have assumed, is that… it depends.  

However, what does in fact ring true time and time again for any institution or firm tasked with a digital transformation mandate, is that going it alone–by prospecting for and working with technology partners in isolation–can lead to flawed implementation and financial risks.

The impact can be quite significant in the long term.  

Keep reading to learn more about how an integrated best-of-breed technology ecosystem can help your firm take on and roll out a digital transformation strategy with confidence.  

Recent Wealth Technology & Integration Findings

The rapid acceleration towards a full-blown digital-first era comes with its fair share of opportunities and challenges. Ultimately, what this means is that firms and institutions must re-evaluate the strategic areas of focus that will have critical implications on business outcomes. 

When it comes to implementing new technologies, one prominent challenge is the overwhelming amount of options available. 

In other words, analysis paralysis

According to the InvestmentNews Research 2022 Adviser Technology Study, the typical firm uses five different technology vendors, and a third of firms are looking to add several additional technology partners in the near future.  

Despite the intent to add to the tech stack, firms continue to experience the following operational challenges: 

  • ➜ 57% of advisors say the lack of integration between their core applications is the most significant pain point with technology 
  • ➜ 56% of advisors use individual solutions to build their technology stack (which serves as no surprise for the former number) 
  • ➜ Research from Cerulli Associates indicates that 94% of practice management professionals find limited technology integration creates productivity challenges  

In addition to the number of solution providers that exist in today’s market, the lack of connectivity and seamless integration continues to be a prominent challenge across the industry. 

As firms venture down the path of siloed technology implementations, we continue to see the rise of integration challenges, amongst other significant challenges which include resource allocation, financial risks, loss of productivity, and a poor client experience.  

One particularly interesting finding that surfaced with the mentioned study above is that integration, or rather the lack of integration between technology providers isn’t so much a challenge as is the lack of connectivity and integration into operational processes and client workflow to create a unified and seamless experience at every level of the organization.

Digital Transformation Affords Massive Opportunities  

Digital transformation is the adoption and integration of technology into all areas of an organization to drive measurable business outcomes. Common goals for its implementation are to improve efficiency, value, or innovation. 

Digital transformation affords institutions, firms, and advisors efficiencies and operating capabilities that they (and their clients) have longed for. 

When successful, digital transformation can lead to the below three outcomes in a number of different ways: 

1) Deliver tremendous value to clients (including the household and to their next-gen);

2) Lead to significant productivity gains across the front office and drive advisor-client engagement;

3) Create massive operational and compliance efficiencies to save time and money at the enterprise and head office level

First, digital transformation enables firms and professionals to create seamless, personalized digital client experiences that enhance the advisor-client relationship at scale. 

Second, digital transformation enables firms to meet information security and compliance regulation, reducing the time and effort previously spent on these activities.  

Lastly, digital transformation enables firms and their advisors to improve daily workflow via integration and automation, leading to focus and productivity where it matters most.  

Another major outcome (and advantage) of a successful digital transformation strategy is the ability to attract and retain top talent (notably Advisors), which can lead to a significant competitive edge in the market. 

Important reminder 💡: wealth management has always been a relationship-driven business; this isn’t going anywhere or at least not any time soon. When implementing technologies and digital transformation initiatives, it’s important to consider how technology can support relationships and not replace them. 

Other materially significant outcomes that result from digital transformation include: 

  • Cutting costs: Firms can benefit by significantly cutting costs via automating workflows, eliminating manual processes, and saving money on operating resources. 
  • Growing the business: Improving client experiences and building trust at scale can lead to referral flow and drive support in your communications and marketing efforts to ideal clients and families.  
  • Gaining scale and productivity: Successfully implementing a best-of-breed ecosystem results in massive operational efficiencies across all levels of the organization and creates the foundation for adding AUA/AUM without draining human capital.  

Leverage Best-of-Breed Solutions to Support Your Growth & Digital Transformation  

Even with the clear benefits, digital transformation initiatives are often challenging, time-consuming, and resource-draining.

Fortunately, you don’t have to go it alone.  

Technology providers that are well-versed in their respective areas of expertise and implementations — and with transformation initiatives in general — can play the role of a trusted partner. More than just a vendor, these providers are immersed in the space in which they operate and are able to help your firm streamline processes while providing support every step of the way.   

Good partners bring experience, expertise, and innovation to the table. 

Good partners don’t just understand digital transformation, they’re experienced in workflow configurations and understand when and where other solutions (partners) can play a role and plug-in.

Good partners will double down on their area of expertise and recommend other best-of-breed solutions for particular workflow challenges and problems rather than overpromising that they can do everything (more on that later). 

Collectively, our firms have found that the best-implemented technology solutions are driven by collaborative relationships where each partner is confident in sharing their input, perspective, and expertise.

Wealth Technology Best-of-Breed Ecosystem - Quotes from CEO's

Strength is certainly forged in numbers and success is a likely output when all hands are on deck.

Access the Guide💡: Read the 2023 technology vendor evaluation guide to make sure you are checking off the right boxes and asking the right questions with your prospective solution partners.

What Exactly is a Best-of-Breed Ecosystem? 

A best-of-breed ecosystem approach is a technology implementation strategy where firms deliberately move away from siloed implementations and/or do not rely on a single vendor to deliver technology. Instead, firms leverage an open technology architecture, enabling multiple best-of-breed solutions to work in collaboration.  

A best-of-breed ecosystem includes solutions that span the end-to-end wealth management delivery process across the organization and across all functional requirements to deliver efficiency and value at every intersection.  

Ultimately, it’s about bringing together the best solutions in their respective domains and areas of expertise; solutions that continue to demonstrate delivery of success, provide seamless integration and connection with one another and have experience working with one another.  

An integrated best-of-breed ecosystem implementation is a well-thought-out, defined, and a very strategic roadmap toward success that considers the functional requirements across the organization and has a deep understanding of the long-term vision for the future. Best-of-breed solutions de-risk digital transformation strategies and increase the likelihood of success, reduce the number of resources, technology learning curves, disconnected or disjointed workflow, poor client experiences, and on and on.  

Ultimately, it’s about future-proofing your business and eliminating friction points to maximize output and scale.  

The below flow diagram represents a high-level overview of an integrated Best-of-Breed Ecosystem in Wealth Management to meet current and future demands of back, middle, and front office teams, including clients and households.  

Wealth Technology Best-of-Breed Ecosystem
 *Note: the above diagram does not capture and illustrate the entire technology stack but rather is a real depiction of what your best-of-breed ecosystem could look like. 

But What About All-in-One Solutions? 

What we have witnessed and continue to see is that not only do all-in-one solutions have a slow adoption rate, most of the time these solutions fall short in many areas; mainly because those areas are not their area of expertise and are largely an after-thought or a basic feature with extremely limited functionality. 

When you think it through, it makes complete sense. Since when has trying to be everything for everyone worked out in the long run? 

While on the surface the concept is quite attractive, all-in-one solutions pose several challenges further down the road, resulting in more time, money, and resource allocation.  

And here’s the thing; where you think you might be saving money, you’re not. There’s often more commitment and full-time employment resources allocated to certain functional areas due to the limited functionality or lack of flexibility. Not to mention, the client experience is often less than ideal.  

Owning the “advisor’s desktop” doesn’t exist, unless it’s done through deep connections and tightly knit integrations with other best-of-breed solutions.   

The importance of having a well-thought-out, deeply integrated, and connected technology implementation rather than focusing on bits and bobs along the way, or one area of the business, cannot be stressed enough.  

Do you want the best digital document vault?  

Do you want the best fee and reporting solution?  

Do you want the best onboarding and KYC solution?  

Do you want the best CRM?  

Do you want the best financial planning software?

Do you want the best portfolio management solution?  

Your answer should be yes to all of the above

A Best-of-Breed ecosystem is the only way to get there.  

Moving Forward With Your Digital Transformation Strategy 

If your institution, firm, or practice is embarking on a digital transformation strategy, just know that you’re not alone. Best-of-breed solution providers like PureFacts, Mako, AppCrown, and FutureVault, are here to collectively partner with firms and deliver value, experience, and expertise where it matters most. 

Individually, best-of-breed solutions bring subject matter expertise, proven track records, and deep working relationships. When brought together and integrated, best-of-breed providers create an unparalleled ecosystem – giving you the efficiency of an all-in-one solution without compromising functionality or workflow experience. 

Future-proof your business for tomorrow, today.  

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