We’re creatures of habit. Many advisors would be happy to use the same legacy technology for the duration of their professional careers. But sooner or later, we realize that modern and emerging technology is too important to ignore.
It’s hard to fight inertia. Very hard. In fact, the realization that its time to invest in a new tech stack is comparable to the
These feelings of frustration may be all too familiar to RIAs dealing with outdated technology and the daunting prospects of upgrading their technology.
Denial: “The technology we have works fine for our purposes. Switching providers would cost us flexibility and control over our data.”
It’s easy to find reasons not to pull the trigger on upgrading your tech stack. It represents a significant expense and learning curve, and a multi-year commitment for your business. But denying your firm and employees the tools they need to stay competitive will ultimately hurt you.
There are real opportunity costs in sticking to legacy tech. Is it worth avoiding an expensive hassle today to lag behind in data security, back-office efficiency, and new ways to add value to your business and improve your client experience.
Anger: “I’m done with this system. It’s time to find something that will actually work.”
Inevitably, frustrations will hit a boiling point as advisors realize their aging tech stack is an obstacle to their growth and success. That frustration and anger will only grow if advisors don’t know where to begin looking for a replacement. It’s not unusual for advisory firms to lack a technology expert who could guide them to the features they need or the questions they need to ask their would-be tech vendors.
For instance, many advisors don’t realize the value of data portability. A system that can easily plug client data into business intelligence platforms will reveal insights that a firm might never have uncovered using legacy tech. Advisors should ask prospective vendors about billing nuances, compliance capabilities and how their technology integrates with other systems. Finally, advisors should consider the importance of a vendor’s subject matter expertise and accessibility to training, consultation and coaching.
Bargaining: “A new solution would disrupt my business. I can bandage my tech stack with cheaper solutions and workarounds and squeeze another couple of years out of it.”
Any time advisors bargain themselves away from making the leap, they limit their ability to grow their business. This mindset jeopardizes the longevity of client relationships: While you’re staying in place, client expectations and demands for a digital experience will only grow.
Adopting modern technology allows many advisors to avoid reducing their fees as well. While the commoditization of investment management has brought about fee compression, implementing technology that creates efficiency in your work will allow you to offer services that add value to client relationships without having to increase costs in other areas.
Depression: “I took the plunge and invested in new technology, but now we have to learn a whole new system. Is this worth the cost and hassle?”
Advisors go through a conversion period that often involves disruption to their day-to-day routine, and they might question whether it was the right move. Though it takes about 80-90 days to complete data conversion, advisors are anxious to get up and running on their new system and begin implementing their technology.
Acceptance: This is when you take a sigh a relief. After conversion and training, advisors can see their new technology does not hinder their ability to serve clients. They experience first-hand how modern integrations remove friction when compiling collections of data points from various systems. They are relieved to have access to compliance tools they never knew they needed. They now have more quality time to devote to clients.
Technology is a serious investment, and it makes sense to want to get the most out of our tech stack for as long as possible. If you’re coming to grips with the realization that it’s time to let go of legacy solutions, talk to a peer who understands the gravity of the decision. Find out what worked for them and what didn’t. Don’t let fear of the unknown hold you back from investing in technology that’s right for you, your business and your clients.
