Why Advisor Software Feels so Outdated


Walk into an average advisor’s office today and you might see technology that reminds you of a set from a 1960′s science-fiction show – incomprehensible blinking lights and systems that don’t really seem to do anything.

What do all these pretty lights do?

It’s not because advisors are nostalgic about the 1960’s view of the future. It’s because, for the most part, their primary technology systems were either developed or purchased over a decade ago.

Remember how “cool” Microsoft Outlook 97 was? Seriously, who didn’t like (or love to hate) Clippy? A lot of advisors still use Outlook today, and its core functionality is largely the same as it was 14 years ago.

And what about portfolio management software? There are multiple culprits here, but again, these programs started out as glorified spreadsheets with complicated reporting menus. This still describes most advisors’ systems today.

The past decade of consumer and business software has delivered huge advances — especially in web applications — with unprecedented power, reliability, and above all, ease-of-use. Shouldn’t advisors demand the same characteristics from their tools?

So how do we get advisor technology into the modern era?

When new technology comes out, advisors are slow to adopt it. The reasons are many, but I believe advisors simply don’t want to risk making the wrong move into a new program. Common excuses include: “What if the new system doesn’t do 100% of what my existing system does?” “I don’t want to make a mistake by choosing the wrong system,” and “I  just don’t have the time to try it out.”

Vendors share some of the blame as well. Unfortunately, the market for advisor technology is challenging (remember how slow many advisors are to adopt new tools?). It’s fragmented and largely made up of small firms and solo practitioners, so few vendors are successful at effectively marketing to and servicing this channel. This causes many vendors to hold off product improvements until they reach a critical mass of users, further delaying product innovation.

Do these advisor complaints about technology sound familiar?

What do you mean it doesn’t work on my smart phone?

Why can’t I access my CRM/portfolio software/client documents securely from home without setting up a complicated VPN?

Why does it take so many mouse clicks to look up my client’s net worth?

Where do advisors go from here?

Certainly vendors can refresh their current tools, but most will avoid incurring the expense until there’s demand for updated tools.

But advisors don’t want to invest in new tools until there are new features that are so compelling there’s no way they would want to run their business without the tools.

It’s a stalemate. Who will be the first to blink?

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Bill is a CFP® professional and is a technology consultant to financial advisors. He writes the monthly technology column for Morningstar Advisor, provides technology commentary for the Journal of Financial Planning, and blogs at his own website, FPPad.com
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