The tech stack is often the most significant part of an advisory firm's budget — yet fewer than 40% of advisors think their firm is definitely on the right track when it comes to choosing the right technology, according to a 2023
And even when a decision is made, new tools often
Asking the right questions the first time around can save firms significant time and money. Here are our top six queries to ask any tech provider before you sign a contract.
1. What does your onboarding process look like?
This question comes with a few components. Specifically: How long does the process usually take? Do we need to prepare your own data, or will the new provider import the files? What is the standard learning curve for the technology? What kind of service and support does the provider offer?
At the end of the day, there's a big difference between a firm that imports your data, sets your system up for you and offers hands-on training and a firm that provides you written instructions to set the system up yourself. Which approach works best for you will depend on your temperament, the size of your firm and other factors.
Oh, and be sure to ask how soon the onboarding will begin. Depending on
2. Who owns the data?
These days, nearly every element of an advisory practice can be turned into data. This ranges from account balances to client information and model portfolios. Some providers include a line in their contracts that once the data is incorporated into their systems, they own it. This can create unexpected challenges if you decide to switch technology providers in the future and want to export your information to the new provider.
Remember: Data is an asset. Relinquishing ownership may impact your firm's value in the future, depending on the data in question.
3. How do renewals work?
Be sure to ask about the first renewal, and any renewal thereafter, keeping in mind that some providers offer introductory terms or subscriptions. Be sure to ask specifically about pricing. Many tech providers offer tiered pricing, which means your rates and terms may shift as you grow your firm. Ask what criteria they use (such as AUM, number of users at your firm, number of clients, etc.) and where each level starts and ends.
You might consider asking how frequently they change pricing levels and packages, and whether existing users are forced to upgrade to newer pricing models or can elect to keep previous plans.
Focus on the length of subscription and pricing. Are you locked into any agreement? Does exiting the contract early come with a penalty? You want to be comfortable with your tech provider's service terms. While that's usually a given early on, looking ahead at renewals can help you avoid any uncomfortable curveballs.
4. What's the support structure?
There are two main questions to consider when it comes to your prospective provider's service and support.
First: Is the technology supported by real people? A growing number of tech providers are relying on FAQs and chatbots as their first line of support. While this can be convenient for simple questions and for self-starters who want to learn more about the product, it can also be frustrating if you have an urgent or specific question.
Second: Is the support included in a standard pricing package? Some firms offer hands-on service but only as part of a premium package or add-on. If you want or expect hands-on assistance, ask whether you'll need to upgrade or pay an additional fee.
5. How do you approach product development and updates?
Technology advances quickly. Even if you love the provider's tech now, it may feel obsolete in short order. It's important to understand how often the provider updates their product. When discussing product updates, ask what percentage of updates introduce new features versus fixing bugs in existing products. Ideally, your tech provider will do a combination of both.
You may also want to look for a mix of front-end updates (like improved user experience for you and/or your clients) and back-end updates (quicker load times, smoother integrations, enhanced security, etc.)
6. How do you handle partnerships, integrations and growth?
Even all-in-one providers benefit from integrations with other tech providers. How these partnerships and integrations are handled can make all the difference. For instance, many tech providers link up behind the scenes using an application programming interface, or API. Essentially, APIs translate the code of one technology to another so the programs can speak to each other. They are essential for smooth integrations. If a tech provider partners with everyone, this might mean they spend less time setting up and monitoring each API connection.
APIs can also apply to a company's internal systems. If you're working with a provider that's grown through acquisition, they may be using APIs internally to integrate new technology into their existing systems. This can lead to glitches if rushed. The more connections, the more potential for snags. It's one reason our firm prefers to develop in-house whenever possible.
Of course, you may have additional questions for a provider based on your business or the specific service they're offering. These six should help you start the conversation and may help you uncover some potential sticking points early on, so you can be confident in whichever providers you decide to work with.
