2019 Software Survey
Joel Bruckenstein and Bob Veres have published their 2019 Software Survey, it’s worth a look if your trying to keep up with the latest landscape in the financial services arena.
The tech landscape is more diverse than most advisors realize. Planning firms that are looking at their technology options often only see the market leaders (and the consequences of their larger marketing budgets). The market leaders are there for a reason: they’ve obviously become valuable members of the planning/advisory community’s ecosystem. But as you scroll down the lists, you find that less well-known software solutions also have high user satisfaction ratings–some higher than the market leaders.
At the same time, when you scan the lists of programs that were written into the “other” field, you realize that the permutations of possible software stacks is virtually infinite.
Also, they may have captured a trend in the making, where younger advisors put more value on their financial planning services (and software) than do older advisors. CRM may be a convenient “hub” for the entire software suite–and that is clearly a high value for more experienced advisors and advisors at larger firms–but the higher numbers of advisors with 1-5 years of experience who believe financial planning is their most valuable software suggests that their value proposition is different from that of more experienced advisors. Could this be leading to a different compensation model where advisors are paid for planning rather than for asset management?
Related to this, is the surprisingly low aggregate market share rate for portfolio management software. Easily within recent memory, it seemed that every advisory firm rested its value proposition on effectively managing client portfolios. In this age of index funds and ETFs, and robo solutions calling the value of active asset management into question, there seems to be a de-emphasis on portfolio management.
The new software categories that they are following in this survey–economic analysis and portfolio modeling, Social Security and College Planning tools and everything in the miscellaneous category–imply possible new ways for advisors to add value beyond managing portfolios, delivering financial plans and tracking client preferences. The better the software becomes, the easier it will be for planners to provide valuable services that have not been part of the traditional planning menu.
Finally, the cybersecurity numbers suggest to us that advisory firms are naively hoping that they won’t be targets of cyberattacks, or they are taking their data security responsibilities less seriously than perhaps the regulators would prefer. This is an extremely worrisome conclusion, given the increasing risks that the entire business community is facing, and it would seem that advisory firms would be rich targets with their wealthy clientele and routine handling of sensitive financial information.
Enjoy!
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