Whether your software purchase is a big or small commitment, make sure it is the right one.
Sometimes choosing the right technology is easy. You have a need and, a few Google searches later, you have a solution. Other decisions, however, require a more thoroughly researched approach, especially when they involve software that is going to be client-facing or a core part of your day-to-day activities.
Define your needs
Just as we tell our clients that every dollar has a job, so too should the software you are preparing to buy. Write out your needs and wants with as much specificity as you can so you can approach the purchasing decision with clarity. Also, try to quantify your needs where possible. These requirements should be measurable, such as, "I want to be able to capture a prospect's information in less than two minutes," or, "I want to input my client's financial information once during the creation of a financial plan and have it flow through to all materials presented in the plan."
Differentiating between your needs and wants will help ensure your search for the right solution stays on track. It is easy to get distracted by shiny features that do not actually fill your original needs.
Think about your current pain points and what your ideal process would be to solve them. It doesn't matter if your solution seems feasible or not; technology is evolving so fast that a solution you just haven't discovered yet may indeed exist. Get creative while being as precise as possible.
Listen to the crowd, but don't follow
Reach out to your peers for recommendations and reviews regarding the products you are considering. If you need more sources, ask prospective vendors for the names of customers who are willing to talk to you about their implementation experience. Discuss your current needs and pain points, and ask for an honest appraisal of whether the software meets their own goals. Ask about their least-favorite element of the product to make sure it's not the feature you are expecting to address your highest-priority issue.
One of the worst reasons to buy certain software is because the majority of firms you know is using it. Switching technologies is time consuming, expensive, and frustrating, and most advisors avoid doing so for those very reasons. Being the popular option is not reason enough for you to adopt it. Stay objective.
Choose workflows over features
While financial technology products race to find the all-in-one, magic-bullet solution for advisors, feature bloat becomes a real concern. While it would be nice if your CRM solution automatically pulled up your clients' records when it registered an incoming call from their phone number, it is more important that the software tracks the onboarding process of new clients or the opening of new accounts by the clients you already have.
Is it preferable that your rebalancing solution contains an easy way to check or display a client's current tax bracket, or would you rather see year-to-date realized gains? Would a process to acknowledge that cash has been raised for an upcoming withdrawal or a new feature that does not save any appreciable time have more value?
Integration, integration, integration
When choosing a vendor or software solution, one of the first questions to ask is what, if any, integration the product has with your current technology stack. Disparate systems for tracking client information, portfolio performance, compliance, trading, and planning require the input of a client's information multiple times.
Integration reduces this duplication of effort, and should be high on your list of priorities when choosing new software. It is especially important to talk to other advisors who have successfully implemented exactly the software solutions you are evaluating. Vendors can promise a smooth integration, but advice from those who have actual experience with the process is invaluable.
Workflows + integration = automation
Time is an advisor's most precious resource. Every moment spent doing something other than providing exceptional service to existing clients or meeting prospects should be minimized as much as possible. Automating client management tasks or marketing efforts is possible with a suite of products that can hand off information and tasks to one another and keep any time spent maintaining them to a minimum.
All technology decisions should be made with an eye toward minimizing touches with your software so that you can maximize touches with your clients.
Cut your losses, don't harvest them
If adopting software is time consuming, expensive, and frustrating, then adopting the wrong software is the hangnail of purchasing mistakes. If you find yourself fighting your software to do what you want, with no long-term advantages, then it is time to re-evaluate your decision. When software becomes too difficult, users will start actively avoiding it and implementing workaround solutions, which goes against the very purpose of having the software in the first place.
To help mitigate this risk, most software offers a free trial period. Make sure you have enough time to properly evaluate it before starting the clock. Also, know the minimum contract length. Some solutions are cheap enough that it would not be too big a deal to abandon the product if it is not working out and to find software that is a better fit.
More integral solutions, such as CRM or portfolio reporting software, require an in-depth onboarding process by the vendor, and so require a longer contract. A typical minimum duration is two to three years. If you have doubts, ask for a longer trial period or even a phased entry into the software. Sometimes you will not be able to do anything except wait out your current contract. Spend that time creating your wish list for your next software suite and hope your vendor listens to feedback and implements updates quickly.
Deduct time not spent in the software from the purchase price
While we all want the most affordable solution, we sometimes overlook the hidden cost of software, which is the amount of time we spend in it. Effective technology needs to get out of the way of your day. If the decision comes down to a more expensive, elegant solution versus a cheaper, adequate one, try to quantify the amount of time that you will spend in both, then multiply any differences by your rough hourly rate. That should help put into perspective the actual difference in cost between them.
Software can be a great help, or it can be help with a side of hindrance. Defining what you need before you buy can keep you on track to using it as the tool it is meant to be, rather than the focus of your day.