Overwhelmed with all the Software Choices – 3 Key Things to Follow

Amar Pandit , CFA , CFP

Amar Pandit

A respected entrepreneur with 25+ years of Experience, Amar Pandit is the Founder of several companies that are making a Happy difference in the lives of people. He is currently the Founder of Happyness Factory, a world-class online investment & goal-based financial planning platform through which he aims to help every Indian family save and invest wisely. He is very passionate about spreading financial literacy and is the author of 4 bestselling books (+ 2 more to release in 2020), 8 Sketch Books, Board Game and 700 + columns.

February 11, 2020 | 10 Minute Read

The other day I met a Financial Planner who had just attended a conference. He met up with so many technology vendors that he was totally confused about which technology to use and how to use it. This is extremely common among the financial planning and financial advisor fraternity. Most people are skilled in Microsoft Excel but when it comes to financial technology there is very little level of Technology Literacy (just like you feel there is financial illiteracy in the general population, in our profession there is phenomenal level of technology illiteracy). Using Technology does not make you Tech Literate or just because you have implemented 5 software products does not make you Tech Literate. Satish attempted to address the first part in his column about the WHY of Technology.

I will focus this post on key issues that you should consider (beyond the Why) and hope to make you Tech Literate. One of the first things that you should think of “What is my Ideal Client Experience?” Can I define that and write it down? This is often the difficult part, and rarely do we practice this when we decide to buy some software. 

Think about how you buy a Software:

  1. Software Vendor approaches you with a product.
  2. You go to a Conference and see some demonstrations.
  3. You get a referral from a Fellow Advisor about a product, or an Asset Manager launches a piece of Technology.

Most of the time, this piece of software has been built by people who have often no experience about your business. Yes, they seem to understand what you do just like you understand what a surgeon does and what he might need. There are many nuances that are generally missed out or there are just too many irrelevant features in a product. Think about Monte Carlo Simulation.

Yes, you will sound very intelligent in front of the prospect by using the word Monte Carlo, but you would just improve the client’s vocabulary with another financial jargon. However, at a very basic level clients just want to know that they will be fine. Imagine telling this to a client “Based on Monte Carlo Analysis, there is a 90% chance that you will achieve this retirement income.” What sense can one make from this? This is nothing but bullshit sold to advisors to come across as intelligent or to prove their worth.

Just like the broader Financial Services industry confuses people with too many products, the technology vendors do the same with you. They pitch so many irrelevant features that most features don’t add any significant value to your client’s life or your life but does manage to complicate your life (because now you have many products that don’t even talk to each other). The technology vendor certainly has your best interest at heart, but he also believes that MORE is MORE and thus shows off every conceivable feature to you without understanding whether it makes a 95% impact or a 1% impact on your overall client experience.

At a recent Schwab conference in San Diego, I walked one of my financial planner friends through the Exhibit Hall at almost 100+ vendor booths. He was so confused and overwhelmed (and mind you this gentleman comes with an experience of 25 years in Technology and Software Solutions) and asked me “Why are they not keeping it simple or making it simple?” I told him that Complexity allows your product to come across as an intelligent product PLUS you can Charge More.

Hence the first thing that you must understand is that just because a product has more features (or say Automation) does not make it a better product. You should look at the Simplicity of the Product (Simple does not mean Easy), it’s Relevance (Ruthlessly edit features that might be ok but are not really required) in terms of helping you build your ideal client experience, Ease of Implementation etc. Think about all the features that your phone has but which ones do you use the most.

The strength of any world class product lies not in what it has but mostly in what it does not have. I am reminded of Michael Angelo’s quote “The sculpture is already complete within the marble block, before I start my work. It is already there; I just have to chisel away the superfluous material.”

Second does this piece of software integrate with my other software to deliver a seamless experience. In a forward-looking IFA business, the following are the basic building blocks of Software (Some of these 3,4 and 5 are sometimes clubbed into software):

  1. CRM
  2. Financial Planning
  3. Portfolio Management
  4. Transaction Processing
  5. Operations
  6. Client Reporting
  7. Practice Management Platform
  8. Client Portal, Dashboards and Apps (Client Portal is not equal to Client Experience – More on this in some other Post)

How many of these do you have in your business?

Think of the time, effort and money that is required to evaluate each such software. Even if you are willing to spend time, effort and money – Do you have the SKILL to evaluate such products. An IFA recently told me “I went to Bengaluru thinking it’s a Technology Hub and if I can find a firm to build products for me. They were not getting what I was telling them, and I was not getting their perspective, so after wasting Time and Money I realized that this is not my cup of tea. I started attending conferences and meeting exhibitors but am still overwhelmed about what to do and so on.”

Third, even if you do manage to implement and integrate all products, how simple is it to use and are you or your team effectively using this. The biggest challenge beyond integration is getting users to use the software in a beneficial manner.

You would do well to remember Technology Literacy (Exponential Change happening in this space) is an important business skill for any advisor. 

The Advisor of the Future will be someone who has the right blend of conversation skills, emotional intelligence, understanding of behavioural finance and knows how to use technology to deliver an outstanding client experience.