Why existing advisor platforms just don’t cut it

In our last blog post, “Understanding the reasons for low advisor productivity”, we examined some of the key challenges for wealth management firms as identified by Capgemini’s study “Improving Financial Advisor Productivity through Automation”.

In this post we will return to the Capgemini study to discuss the study’s findings regarding the gaps and challenges in existing advisor platforms.

The following are the key gaps that have emerged around existing advisor platforms across various stages of the advisory process:

Prospecting and relationship management

Recruiting new clients and maintaining strong relationships with existing ones is the most important stage of the advisory process. This includes tracking all contact interactions with clients and prospects, including meetings, conversion notes, action items, and correspondence. Contact Management tools and Lead Generation/Management System tools are the most commonly used tools at this stage. But most such tools are either separate or with limited integration, causing co-ordination challenges and redundancies in present day advisor platforms.

Investment planning

Financial planning tools tend to have no automated link to either illustration tools or existing account information. Even more problematic, regulatory compliance activities like Know Your Customer (KYC) and Anti-Money Laundering (AML) are often not integrated with the advisor platform. Existing platforms also lack scenario analysis tools / risk management engines which are a must-have today.

Client on-boarding

Most of the time advisor have to manually key in all information for existing client and third party accounts. Not only is this time consuming, taking away from more productive activities like prospecting new clients, but it results in financial plan output being generated from different tools/systems which are disjointed with an inconsistent look and feel.

Servicing and monitoring

It’s normal for a firm to have multiple account opening interfaces with product specific account opening procedures, forms, disclosures, and eligibility criteria. The result: client information is often rewritten multiple times with client specific data having to be consolidated manually from each system. Most existing platforms have no automated process to efficiently compare clients’ financial status with the plan. Additionally, any sort of re-balancing of a portfolio requires further manual entry of multiple transactions into various systems and tools. Inefficient, to say the least.

Client reporting and alerts

The status quo sees clients receiving multiple statements instead of a single, consolidated and comprehensive one. There are limited options for reporting across accounts, and client reports tend to be inconsistent firm-wide, with each one having a different aesthetic and failing to present a united front. There is also a lack of early warning systems and alert mechanisms, making it challenging to identify and solve issues early on.

The common theme running through this list is a lack of unification and automation. The use of multiple systems, none of which communicate with one another, is inefficient and takes time away from more productive activities, like recruiting new clients or focusing on existing client relationships.

The next generation of platforms for financial advisors need to offer a comprehensive reporting solution, incorporate effective risk management tools, and reduce redundancies to help financial advisors keep pace.

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