Dealing With Out-of-Date Technology: A 5-Step Guide for Financial Advisors

For financial advisors, navigating the technology landscape is essential to staying competitive and efficient. Here’s an updated guide to help you decide when to update or replace your technology, keeping in mind the evolving demands of the industry.

1. Understand Technology Half-Life

The average half-life of devices like computers, cellphones, and tablets is about two years. After that, their functionality decreases rapidly, leaving you with significantly less efficiency.

How should you manage this half-life cycle? When you hire new staff or need to replace equipment, give the most senior person the new device and pass down older ones to less senior team members. This ensures a steady cycle of hardware upgrades.

2. Stay Up to Date: Automatic vs. Manual Software Updates

Software that offers automatic updates (like subscription-based tools) is generally straightforward. Always use these, because they ensure you‘re staying current with minimal effort.

For essential software like Microsoft Windows, Microsoft Office, or other critical tools, timing is key. You‘ll know it’s time to manually upgrade when:

• Older versions don’t integrate well with newer software or systems.
• Other programs you use are no longer supported by your current version.
• The pain of learning a new version is outweighed by the functionality and benefits of upgrading.

3. Decide When New Technology Is Worth the Investment

Upgrading or purchasing new technology isn’t always about staying up to date. It’s about solving problems, improving efficiency, and staying competitive. Consider new technology if:

• You have tasks that take up too much time and could be automated.
• Your current tools or processes are prone to mistakes that could cost you time, money, or your reputation.
• Your competitors are using new technology, and you need to keep up to remain competitive.
• The benefits of the new technology in the long run (including time saved, enhanced client service, or new capabilities) outweigh the initial implementation and maintenance costs.
• The new technology addresses issues you didn’t even know existed.
• The technology you‘re considering isn’t on the verge of being overshadowed by something better within a few months.

4. Embrace New Technology as a Competitive Edge

Don’t shy away from adopting new tools. For example, tools like customer relationship management, rebalancing software, Voice over Internet Protocol, financial planning software, tax planning software, and even Bluetooth have radically transformed the way most of us work. New technologies:

• Enhance team productivity by automating tasks and reducing errors.
• Allow for better client engagement and service, including remote work capabilities.
• Help manage client relationships and improve accuracy in financial planning.

5. Don’t Wait for Total Depletion

Proactive adoption is better than reactive replacement. Don’t wait for your technology to become obsolete. Stay informed about new tools, and don’t be afraid to experiment. The right technology can elevate your practice, improve your client relationships, and make your team more efficient.

Final Thoughts

Technology is an investment in your firm’s future. As a financial advisor, you owe it to yourself, your staff, and your clients to stay ahead of the curve. If you haven’t already, start identifying areas in your workflow that could benefit from an upgrade—whether it’s new hardware, software, or even tools you‘ve never considered before.

Remember, a well-equipped advisor is a successful advisor. Stay current, and don’t let your technology half-life catch you off guard.