Picking a Strategic Advice Technology Partner: 3 Criteria Experts Look for Beyond the Essentials
By Alan O’Donnell, MBA, MA, ChFC, CLU, RICP, CASL
Director of Advice Engagement, Asset-Map
The vendor selection criteria is vital for picking technology for your advisory business. It’s a must that they have your needed capabilities and demonstrate modern data security processes.
But to position your business for the long run, you need to pick a vendor that’s going to partner with your organization. You need to go beyond the essentials and look to the tech company’s vision, competitiveness, and endurance. Below are insights to help you do just that.
I’ve had the privilege to be accountable for establishing and executing a vision for an integrated tech ecosystem at a Fortune 500 dually-registered IA/broker-dealer employing several thousand financial professionals across field and call-center based channels. This included linking advice and decision-making tools to CRM, client portal, insights, and books and records systems. The results included implementing a vendor-based platform that increased utilization by more than 75% without increasing annual expenses and designing proprietary tax-insight software that was used by the top echelon of producers 5X as often as their peers.
These adoption results were made possible by being strategic in technology investments. To do that, I’ve evaluated many vendors including whether to build internally for both tactical and strategic needs.
Tactical tools can be swapped out as needed to meet a given capability. They can include back-office functions and data feeds, or client-facing tools that serve only a point-in-time need. They’re ancillary to your target market or can be used for a time-bound campaign. With tactical tools, the risk of picking a sub-optimal vendor is lower and the evaluation can largely be a function of which tool best meets the need at the time for the price - aided by the input of internal influencers and external resources like G2 reviews, events such as AdviceTechLive, insights from sources such as t3technologyhub.com, Kitces.com, or Asset-Map’s own AdviceTech Compass. If circumstances change, or a better deal emerges elsewhere, swapping out tactical tools is not prohibitive.
Investing in strategic technology has greater risk. Strategic tools affect the client experience, how you go to market, your brand, the expectations of your clients, and the habits of your team. Tools that are used with clients on an ongoing basis are especially vital to get right as replacing the vendor causes change for both the advisory team and the client. The cost of change is far greater than just the subscription price difference.
When making strategic investments, it’s important to be mindful of more potential pitfalls. Be wary of vendors that create hidden costs, such as the need to hire more staff or spend time on work that doesn’t directly drive business just to support the tool. Instead, look for a tech vendor that has capabilities needed now, has demonstrated they will invest in their product, and demonstrate that they stay on top of the market and emerging disruptors.
With those in mind, here are three themes to watch out for, along with sample questions you can use in your strategic partner evaluation to augment your current selection criteria.
I invite you to consider how these can benefit your advice tech stack selection.
Vision.
Do they have a conviction for their product and the confidence to take feedback? I want to know that they stand for something and that it’s rooted in the end-user.
What are their sources of inspiration for their roadmap? How do they get input? How do I, as a user, help shape their roadmap?
How do they prioritize product enhancements?
How do they approach customization requests? I want to know that when they say “yes we can build what you want” they do so because it reflects my understanding of their vision and why I’m picking them. A too eager “yes” for something outside their scope is a red flag that they lack conviction and that their roadmap may be subject to whims.
Competitiveness.
Do they know their space and have a plan to stay relevant?
How do they speak about their customers? Do they speak to both the firm paying the subscription and the end-user? How do they research the end-user experience to ensure relevancy?
How do they describe their competitors? Bonus points if they speak to both firms playing in a similar space as well as alternatives end-clients may use to solve their problem outside the advisor ecosystem.
Do they sell against competitors or do they position themselves for the end-user? Disparagement may be a sign of a lack of confidence and vision.
Endurance [built to last]:
How do they describe what success looks like for their business five years from now?
How do they approach data? How do they leverage that data to inform their product? How can I get data out of their system so I can better analyze my business and drive adoption and efficiency?
What processes do they have in place to keep up with compliance trends that affect their end-clients?
How do they develop their employees? Can they succeed without a key person or founder? Are they just one illness away from long-term trouble?
Your strategic tools are vital to amplify your business’s value and your brand. By digging deeper into your vendor evaluations for things such as vision, competitiveness, and endurance, you’ll be better positioned to select partners to position your advisory business for long-term success.
Ready to take the next step? Take advantage of our AdviceTech Compass - a tool to navigate the world of advice tech - and especially give focus to those client-facing capabilities that are core to how clients experience your advice.
Want to know more about how Asset-Map can contribute to your client experience? Schedule a demo today to start the conversation!