The Alternative Tech Stack
The T3/Inside Information Software survey is up and ready to welcome advisor participants. This year’s survey features more than 300 different programs and solutions, broken down into 36 (!) different categories. Joel Bruckenstein, my partner in this survey, and I estimate that most advisors can complete it in about 15-20 minutes because our data from previous years tells us that most of you aren’t using many of the categories (Remote transcription services? Cloud hosting solutions? Economic analysis and stress testing tools? Social media archiving resources?) and you can quickly skip right on through those pages.
But… can there actually be 300 relevant software tools and solutions in the fintech space? Although the survey is designed to capture market share and user satisfaction data, it also helps advisors and their firms see a very rich, broad fintech ecosystem beyond the market share leaders. In fact, one can create a tech stack that doesn’t include any market share leaders, and it would in many ways be superior to some of the well-known programs you’re using now.
Don’t believe me? Let’s take a look at the powerful feature set an advisory firm could put together from a collection of the higher-rated, low-market-share programs and solutions that I’ve collected from past surveys, many of which you may not even be aware of.
You engage a prospect in an initial Zoom call, talk about their life and circumstances and goals, and what else? You want to know how aggressive or timid they are before you recommend one of your model portfolios.
The leading market share tool, as you know, is a series of proposed six-month returns and losses, where the prospect chooses one or the other iteratively until he or she is given a risk score between 1 and 100.
And… that’s it. Now you know the prospect is a 43, and there’s a tool that gives the prospect’s existing portfolio a score between 1-100, and tests each of your model portfolios. You point out the difference between the prospect’s score and the prospect’s portfolio, and recommend your model portfolio that is closest to a 43.
If you think that giving clients a two-digit risk tolerance number is a bit naive, then try Andes Wealth Technologies.
Andes features several 3-5 question quizzes that help measure a prospect’s risk appetite, investing temperament, loss aversion; whether she tends to follow the herd, where she has a tendency to overconfidence and her level of knowledge of the markets and investing generally. (Taking these tests, I discovered that I prefer passively managed portfolios, I’m a moderately-high risk taker with my investments, my loss aversion is low, I don’t have any discernible herding tendencies and my financial knowledge, after 40+ years of reporting on this stuff, is not nearly high enough.)
Andes also presents clients with the spectrum of your model portfolios on one page, which graphs the range of each portfolio’s one-year upside and downside returns out to two standard deviations. The bond-heavy portfolios to the left have a narrower spectrum of possible returns (green for upside, red for downside) than the risk-asset-heavier portfolios to the right. The client chooses one, and you cross-check that with the results of the quizzes.
In most cases, a person who scored as a moderately-high risk taker will have chosen a portfolio to the right of center, while somebody who has a portion of his portfolio stuffed in the mattress will be inclined to choose a left-side asset mix.
The result: You have (and this is important) a very defensible process for suitably matching clients with portfolios. If one of your clients tried to argue, in front of a scowling jury, that the bear market losses in their IRA was all your fault, you would pull out their time-stamped Andes responses and show them that the clients, themselves, chose the portfolio they’re now complaining about.
But more than that, you also know whether your new clients will startle with the herd during a bear market, whether they prefer a passively- or actively-managed portfolio, and roughly how much they understand about investing.
Once the initial client assessment process is completed and you assign a portfolio, Andes will automatically create an investment policy statement (IPS) for the client. The text offers a list of the investment objectives pulled from the worksheet, a graphic that reproduces the risk tolerance page where the client was invited to choose portfolios (with the selected portfolio highlighted), a pie chart of the asset allocation of that model portfolio, annual returns of that model portfolio (or asset allocation) going back 20 years, plus explanations of the financial advisor’s and client’s duties and responsibilities while managing the portfolio. There’s a graphic that shows how the range of expected returns tends to narrow over longer time periods, reinforcing the message that the best course is usually to stay the course.
The client reads it over and signs, and you have an IPS on file without having to spend a lot of time on it.
If Andes is not your thing, consider Tolerisk Pro, which is the best instrument for assessing client risk capacity. A program called StratiFi is by far the best tool for evaluating the various risks embedded in the design of client portfolios, in multiple dimensions.
Client (portfolio) onboarding
Let’s face it: If you work with one of the larger custodians, onboarding clients is a nightmare that you wish you could wake up from. Even if the custodian supports remote signature technology (avoiding physical paperwork) the process still looks and feels like the physical paperwork process. You’re filling in blanks on template documents, and woe betide unto you if one of those blanks is left unfilled or something is misspelled. Can you spell NIGO?
Okay, so what’s the alternative? Let’s imagine that you add Nest Wealth to your tech stack. Nest is an app that sits on top of your CRM. Let’s say a prospect decides to become a client. You open Nest, specify the type of account(s) and which custodian, simply by checking off boxes. (The same basic procedure works for an account transfer.) Nest will automatically access all the forms that will be required to set up the new account(s), and the ACAT forms that will transfer the assets. You can customize it so that the program will also access a template of your client agreement and acknowledgment of receipt of the ADV forms – in other words, the full package of documents.
But Nest doesn’t show you any of these forms and templates, much less force you to fill them in. Somewhere in the background, it scans all those blank fields in all the selected documents, identifies the information that will be needed to fill them in, collectively, collates this information and presents you and the client with a series of online ”quizzes” asking for the data that will be filled into every one of the blank fields. If multiple blank fields in the various documents require the same information, Nest will ask for that information just once.
The quizzes start with personal information (name, date of birth, address, marital status, etc.) and then go to employment information, financial information, regulatory questions, and finally the identity-verification fields. Some of this will be automatically pulled from the advisory firm’s CRM. Clients and advisors will typically fill out this information together online or at the office computer, and if they wish, they can skip over fields and come back to them.
At the end of the process, once all the answers have been provided, Nest will populate the blanks in all the documents and present you with the filled-out forms. To avoid NIGOs, it will flag any missing fields. The forms are sent electronically to clients for e-signature, and the paperwork is bundled together and sent to the custodian electronically.
There are a couple of independent custodians who offer something similar – TradePMR and Altruist got high scores in our survey. Nest is your go-to program if you’re frustrated with the still-clunky onboarding processes at larger custodians. You know who I’m talking about.
Financial planning software – The accumulation years
In last year's survey, all the market share in this category (well, 95% of it) was claimed by programs that will take in a client’s financial data and run it through a Monte Carlo analysis, producing percentage odds that the client will not run out of money somewhere late in retirement. I call this “generalist software;” you use it for everybody: young and old, rich and poor, simple or complex. Below, I’m going to show you how you can replace one generalist planning program with four others that let you generate deeper, more specialized advice customized to different types of clients.
We’ll start with a program called Elements. Elements is an app on the clients’ phone which connects to all their financial institutions, pulling in real-time data from the bank, investment custodian, credit card and home mortgage accounts. These connections feed into calculation engines built into Elements, which tally up a variety of ratios that represent indicators of a client’s financial health. Every day, Elements updates these automatically, so that clients can see their progress in multiple perspectives through an interface that (in keeping with the “elements” theme) looks like the periodic table that we all learned in high school chemistry class.
The first and most familiar element is the client’s savings rate (“Sr” on the interface), which is simply the percentage of personal income that the client saves and invests in real time. This can obviously fluctuate, but the advisor can recommend that the client try to keep this figure above, say, 15%.
Then there’s the burn rate (“Br” in the Elements periodic table) which is the percentage of the client’s gross income that is being spent. The debt rate (“Dr”) is the client’s overall debt-to-income ratio. The tax rate (“Tr”) is the effective federal tax rate (total tax paid divided by gross income).
The income rate (“In”) takes an estimate of the client’s lifetime earnings, to date, and divides that into the client’s net worth. That gives clients a sense of what they’ve done with what they’ve made. If someone has made a million dollars in their lifetime and has a net worth of $5,000, then the “In” number would be 5%. If their net worth was $200,000, then the income rate would be 20%. Obviously, clients whose income rate was 5% would want to raise this figure – and this would be especially relevant for younger clients who might want to change their spending priorities to keep more of what they’re making.
But… isn’t there a retirement sufficiency calculator? That would be the total term (“Tt”): the clients’ net worth divided by their annual personal spending, measured in years. This tells them how long their assets would sustain them in retirement if they retired tomorrow, assuming current levels of spending and zero return on the portfolio. In the early years, this might be one or two years, growing over time to 10, 15, 20 and 25.
There’s nothing in Elements that says if or when the client should retire, or the likelihood that the portfolio will be sustainable. But when that figure climbs up over 25 years, clients begin to see when their current job is becoming optional.
There are other ratios (elements) in the program – liquid term (“Lt”), qualified term (“Qt”), real estate term (“Rt”), insurance rate (“Ir”), and equity rate (“Er”) – and all of them change every day. A “team” section allows the client to add contact information for, let’s say, the insurance agent, financial planner, accountant and estate planner. There’s a feature that will upload documents, such as tax returns, insurance policies, and estate documents like the will and power of attorney.
Elements gives clients an evolving perspective, not only of their current financial health, but how it is improving as they take advice and guidance from their advisor.
Financial planning software – Retirement planning
Elements is great for people who are in the accumulation stage of life. But what about the 60-something prospects who want to know how to financially navigate their golden years. That’s where Income Lab comes in.
Income Lab connects to your clients’ various retirement accounts – taxable, traditional IRA and Roth IRA – adds in Social Security, pension and any rental, fixed annuity or other regular income, and then does a bewildering variety of calculations that hook into an economic modeling engine which tracks 40 different economic indicators. Based on a client’s mix of income streams, asset locations and portfolio balances, plus data from the aforementioned macroeconomic modeling, Income Lab will solve for a proposed yearly income number that the client could plausibly take out of the portfolio over the expected retirement time horizon. Like traditional Monte Carlo, it will show the client that there is (let’s say) an 85% chance that the retirement portfolio will increase in value if that spending level is maintained.
But the same page goes way beyond that, to show how much of an adjustment your new clients would have to make to this income level if/when the markets go up or down. Clients can see that if the equity markets were to go up by 5%, the client would be able to take a monthly income increase of $X. If the market declined 19% over time in a worst-case, Great Depression-like scenario, that would lead to a decrease in monthly income of $Y.
The interesting thing here is that different clients with the same total portfolio balance might experience very different projected adjustments. If 90% of their income is coming from their decumulating portfolio balances, then those market movements are going to have significantly more impact on the sustainable income than if most of the client’s income is coming from Social Security, a pension and/or an annuity.
The possible adjustment trade-offs take the retirement planning conversation to much deeper levels than you get from the traditional Monte Carlo calculations. Instead of trying to achieve a 90% chance of retirement success, clients might aim instead for 50% by taking a higher annual income and take the risk of having to make a modest downward adjustment for a few years if the market goes down. Income Lab will show clients how, in 7% of the future scenarios, they would have to reduce spending by 10% in three bear market years during their retirement. Is that acceptable? If not, you can dial down the percentage allocated to risk assets or reduce the projected annual draw from the portfolios – with the proviso that this makes the income amount more likely to go up if the markets do.
That’s just the beginning. Income Lab generates a very interesting timeline of each client’s projected income should they have retired in any of the last 100 years, and defines the economic conditions closest to today’s, so the client can suss out a most likely future scenario. And then it generates a series of tax-aware decumulation calculations.
Based on asset location (taxable, traditional IRA, Roth) and projected tax brackets, the program calculates the after-tax annual income and total income over the life of the retirement based on a few dozen different withdrawal methodologies. One scenario would be a naive pro rata approach, where, if 50% of the retirement portfolio is in a taxable account and 50% is in a traditional IRA, the system will assume that the client is taking out half of the retirement income from each. It will calculate the taxes on the distributions based on current/projected tax rates, and provide the after-tax income figures, year-by-year and over the client’s lifetime, based on that decumulation approach. If there’s a Roth account, the Roth would be assumed to provide its proportionate share of the total income.
Another tax-naive approach, which is not uncommon among retirees, is to take income from the taxable portfolio in the early retirement years and allow the tax-deferred accounts to accumulate tax-free until the taxable portfolio is entirely extinguished. Then the retirement income would come out of the Roth IRA, and lastly the traditional IRA. In essence, this means the client is paying a roughly 0% tax rate in the early retirement years, and wasting a lot of tax ”space” in the lower brackets, and then experiencing a much higher tax rate in later years due to hefty RMDs.
Alongside these, and a whole bunch of other variations on these themes, Income Lab will model and optimize several ”bracket management” decumulation approaches, where the client fills up the 22% bracket each year with IRA distributions, even before RMDs have to be taken. Another scenario will have the client filling up the 24% bracket.
Under all these scenarios, the system will show (and graph) each year’s ordinary income, capital gains, and the taxable and nontaxable portion of Social Security income based on each year’s projected income. The client can see how much after-tax income the different decumulation strategies will generate, year-by-year, side-by-side.
The most sophisticated decumulation strategies involve Roth conversions. Clients retire and their income (and tax rate) drops. Advisors can go into Income Lab and model how a client’s future after-tax retirement income would be impacted if the 22% or 24% brackets were filled, pre-RMD age, with partial Roth conversions. The advisor can show clients how these Roth conversions would impact the projected retirement income down the road, year by year, and raise (or not) the total after-tax income that a client could take over the course of her retirement.
The advantage of having these tax-naive scenarios listed alongside the more sophisticated approaches is that the client can see the hard-dollar differences using each methodology and learn to appreciate the tangible value of the advisor’s guidance. Clients can see that, using bracket management, they have (let’s say) 6.5% more after-tax income in retirement, leading to a little more than $470,000 additional after-tax income over the life of the retirement. (And how much were your fees again?)
Financial planning software – Tax planning
The high-market-share financial planning programs are not very good at facilitating tax planning calculations, although you can get some of that with Right Capital. But if you want to do sophisticated tax forecasting and planning, you’re probably relying on a specialized program – which, until recently, involved painstakingly copying and pasting numbers from the client’s most recent tax return into software fields, and then navigating a clunky interface that was really designed for tax preparation.
Holistiplan changed all that.
Holistiplan is several related tools in one package. The first thing it does is read, via customized OCR scanning, a client’s most recent (or, really, any) tax return. You feed the PDF into the scanner and the program reads each line automatically in seconds and feeds the data into a pre-created software format where the data can be manipulated and analyzed. No more data entry for tax planning analysis!
The program then activates an increasingly sophisticated machine-learning engine that makes observations about the return: the client’s total income, tax paid, effective tax rate, taxable income, marginal rate, modified adjusted gross income, itemized or standard deductions, short-term and long-term capital gains, qualified and ordinary dividends, carryforward losses (if any) and the safe harbor estimated tax payment this year.
Then the program will scan that data and suggest areas where the advisor can help. Perhaps the client’s HSA contribution was less than the maximum allowable. The clients’ return might have a schedule C, which means they were eligible to make a tax-free contribution to a SEP IRA account.
Finally, the program provides the tax modeling capabilities that are missing in most of the mainstream planning programs, showing the client’s tax situation for the next five years, allowing the advisor to do some what-if calculations. What if the client purchased new equipment for the business this year versus holding off until next year? What if the annual bonus were accelerated into this year or deferred until after December 31?
Our survey told us that only about a quarter of all advisors are offering sophisticated tax planning to their clients – and (surprise!) most of them are CPA planners. If more advisors knew about Holistiplan, more clients would receive more sophisticated tax advice.
Financial planning software – Broadening your expertise
How much do you know about advanced estate-planning techniques, or the detailed provisions of home or auto insurance, elder care planning or cross border planning? You certainly won’t find those solutions in the mainstream planning programs. So you turn to FP Alpha.
FP Alpha has a large and growing list of modules that might fairly be called expertise in a box – machine-learning calculators overflowing with detailed insights provided by subject matter experts in, currently, 20 different areas where clients might ask for your guidance. To unlock the machine learning, you scan in client documents – say, the client’s will, durable power of attorney, home and auto insurance policies – and the OCR algorithms will read the documents, digest the information, and point out that the client’s heirs would be subject to inheritance taxes in her state, suggest rolling IRA funds into a Roth to reduce future required minimum distributions and tax liability, and the fact that millions of dollars of collectibles and art objects are underinsured based on the provisions of the homeowners’ insurance policy. (There’s a lot more, but you get the idea.)
Since the modules all talk to each other, the data from one will inform another one, allowing for more specific recommendations or eliminating superfluous ones.
For each category, the program calculates a score, from 0-100, showing whether the client has optimized the recommendations or corrected the inefficiencies that FP Alpha has uncovered. There is also an overall score that pertains to all the different categories; a client with a score of “13,” who just walked into your office, has a lot of planning opportunities in front of her, while a client who has worked with you for years might have a score of “70” or “80.”
The interesting thing about these planning areas is how often some or all of them are neglected in a traditional planning engagement. How many advisors thoroughly read their client’s last will and testament, and compare it with their assets and the state estate tax rules? Are capital gains allowed to be distributed for income tax reduction in the will? Are contingent beneficiaries named in the will?
There’s even a marketing opportunity. Advisors can link, on their website, to a scaled-down version of the program, where curious prospects can input their own financial data and get a score, based on the data they’ve provided and the calculated room for improvement. A prospect who gets a low score might be motivated to click on the "contact us” button on the advisor’s website to see about improving things.
FP Alpha is by far the most sophisticated estate planning solution for complex client needs, and in all those other areas it is expanding the scope of financial planning advice to places where the profession has seldom gone before. If someone tells you that you can’t buy expertise, suggest that they ask FP Alpha for a demo.
Portfolio management and CRM (and document management)
So you’ve given the client a very detailed financial plan that covers many more bases, at more depth, than you ever did before. It’s time to turn to the ongoing management of client portfolios.
There’s no shortage of solutions. When you take our software survey, you’ll find a list of 31 portfolio management and reporting programs, with market share ranging from roughly 20% each for the top four down to microscopic levels. But for full-featured portfolio reporting, trading, flexible billing, rebalancing and populating a client portal, none of them beat Advyzon in terms of year-in, year-out customer satisfaction.
Different people in an RIA office will see different versions of Advyzon; the dashboard is extremely customizable among 48 “widgets” that are windows into different areas of functionality. Advisors might pull up a dashboard that shows their recent prospects, top 10 clients, recent emails and notes, some alerts and a window into the planning software. The chief compliance officer might see the regulatory AUM broken out into discretionary and nondiscretionary assets, plus AUM by client category (item 5 on the ADV), broken out by individual clients, and the dates that the ADV had been delivered to each client.
The CEO, meanwhile, might have a screen which displays the firm’s total AUM and any changes over different time periods, firmwide asset allocation, new and closed accounts, gross revenue growth, distribution of client fees, distribution of revenue by client age and maybe the firm’s top 10 holdings. The operations manager or COO would see the widgets showing workflows in progress, new accounts, projects in progress, recent documents, and advisory contracts and notices.
And, of course, the staff people who handle the day-to-day management of client portfolios are getting the full functionality: the list of client households, with the ability to click on any of them to see their portfolio details in three different layers (all the way down to 41 different asset classes) and return data. They can build portfolios from the top down or the bottom up. The rebalancer lets them replace an ETF or fund by trading a sleeve of all the model portfolios as a single transaction.
The automated rebalancing feature is primarily set for model portfolios, but advisors can also set it up for portfolio-by-portfolio views. In either case, the advisor would specify tolerance and/or time intervals for automated rebalancing, and Advyzon will produce a set of proposed trades that advisors can review, which also shows short/long term gains or losses on each individual holding at the lot level, selecting the most advantageous lots to trade from a tax standpoint. Advisors can approve or cancel any of the trades before uploading them to the order blotter. If the advisory firm is working with multiple custodians, Advyzon will recognize which custodians to send the trades to.
Portfolio managers can also call up positions that have significant losses according to tolerances set by the firm, on a global or individual account basis. For individual accounts, these can be sorted from largest to smallest. Advyzon has a tool that automatically presents equivalent replacement securities (which could be individual equities, ETFs or funds) to the assets whose losses will be harvested, that can be held for the required 30 days before the original assets can be repurchased. Legacy assets can be placed into a protected “do not sell” category.
The fee billing part of the program supports billing in advance, arrears, a variety of frequencies, average balance or end of period balances, blended or discrete tiers, is accrued interest counted or not, should some assets be excluded from billing globally or individually, etc., etc.
Advyzon is also a CRM, which includes a fact finder tool, so prospects and clients can enter their own data online. In addition to holding the basic client information, and tracking and recording all client interactions (advisors type in the meeting summaries and notes from phone calls), the program includes a workflow engine and task tracker that can be used to manage the firm.
Advyzon’s document management capabilities alert advisors whenever a client uploads a document PDF, and these are automatically routed to redundant folders; the client agreement, for example, going in a master compliance file and in the client’s individual folder. These documents, plus the portfolio management system, are integrated into each client’s portal, so clients can see their portfolio information and documents in one place. There’s a Twitter integration where the investor can see the advisor’s action on social media (should the advisor want this to be displayed), and a bottom line net worth history that shows how the client’s total financial situation has changed (hopefully for the better) over the life of the relationship.
As I mentioned earlier, there are a lot of portfolio management programs in the fintech ecosystem, and the market share leaders receive excellent reviews. If you’re engaged in index replication, trading alternatives or the most flexible client reporting system, then Orion offers more sheer horsepower, and you can get a lot of these features just by using SEI as your custodian. Advyzon happens to offer a very broad, very flexible array of functions that most advisors rely on, and has historically gotten some of the top reviews in our survey.
Chances are your firm follows routine workflows that are ”documented” in the minds and habits of your long-term staff members. Wouldn’t it be nice if, instead, these task sequences would reside in your software system where, when one task in the sequence is marked as completed, the software triggers the next task, and the person who is involved in that next activity is alerted?
Even more ideally, the software would do simple rote tasks that would move the process along more quickly and smoothly – and the RIA firm’s COO would have a dashboard showing all the tasks that need to be done that day and week, and all the tasks that have been completed since inception for each client. Nothing is missed, and the workflows live in the system, so if a key staff member were to leave or drop dead of a heart attack, your firm wouldn’t suffer a catastrophic drop in productivity.
Ideally, the CRM would do all of this for you. But when you go into the most popular CRM programs today, you discover that you have to be an experienced programmer and have the patience of Job to create customized workflows for common tasks like preparing for a prospect meeting, onboarding a client, gathering the data to produce a financial plan or executing a client check request. And even then, the automated workflows are at best clumsy, at worst impossible to configure for individual client circumstances.
Is the best approach to give up and resort to a spreadsheet? Until recently, that would have been my recommendation. But now we have Hubly.
Hubly sits on top of your CRM, drawing client data as needed, and functions as a pure workflow-creation and execution engine that extends the CRM’s functionality in interesting ways. Hubly lets you design and customize an unlimited number of workflows on everything from Social Security reviews to RMD reminders and QCDs, to the big activities like onboarding a client. It keeps track of all the activities that are performed within each workflow, so that advisory firms can retrieve the service history of the tasks, projects and services handled on behalf of clients; and it provides each team member with a daily or weekly list of tasks that need to be performed so that the workflow sequences move forward smoothly.
No step is missed because every team member is notified of every task, and when the tasks are completed, they’re checked off. The operations manager or COO can see all the tasks that have moved onto every team member’s task list, monitor their progress and track how quickly they’re performed. (Is there another way to track the productivity and efficiency of your ops staff?)
To do these things, Hubly pulls client data from the CRM into its own interface, so that you can see your client list and all the key information – first and last name, contact information and any tags that you might have put into the CRM to segregate one group of clients from another. Advisors can map out the steps required to accomplish different projects – or use the best-practice workflows that the program provides out of the box. A project like client onboarding is divided into several detailed workflows: a data gathering and paperwork workflow, a portfolio design/creation workflow, etc. – and there are several standardized tasks within each of those.
The workflows integrate, so that when one is completed, Hubly knows to assign the first task of the next workflow in the sequence. Suppose, for example, a prospect decides to sign on as a client. Press a button to start the initial scheduling workflow, and an administrative staffer is notified to ask the client to go into the scheduling software on the advisory firm’s website and pick a time to meet in person or via Zoom. As you build out the workflow, you designate the person who is responsible for that task, so Hubly knows who to notify. Most of the time, the team member will be logged into Hubly and see this task added to the list of things he or she has been assigned as a priority. But Hubly will also send notification emails to team members if they prefer this additional reminder.
Once the appointment has been scheduled, the administrative person will check ’complete” in Hubly, and the firm can set up automated reminders to that administrative person if, for example, the client hasn’t responded within a certain number of days. There’s a field where the advisor can type in instructions for how to complete the task: “Please schedule this via the Calendly link,” with the link embedded in the text. Hubly has a Zapier integration with Calendly and ScheduleOnce, which allows it to capture and record every historical meeting with each client.
As that task is checked as completed and the meeting is scheduled, another team member will be notified to contact the client for any data that the advisor wants to have in hand before the meeting. Advisors can create standardized agendas for client meetings which can be customized prior to the scheduled date. Every completed task is date-stamped and saved, so that advisors can audit the list of completed tasks on behalf of every client.
The program can be taught to scan the CRM data to identify clients who are turning 72 and will need to take RMDs. It will alert advisors 11 months after a client’s last beneficiary review, and trigger a workflow, so the advisor and her team will no longer have to remember who is due for that review.
It is common for advisors using Hubly to print out the list of tasks the firm has accomplished for clients over the past quarter or 12 months, which helps demonstrate the value of the advisor relationship. And advisory firms appreciate the fact that the program is flexible enough that they can skip a workflow step if it isn’t appropriate for an individual client without lying to the CRM that a task has been completed when it hasn’t.
Hubly doesn’t interface with Advyzon’s CRM, so my proposed alternative tech stack is a bit fanciful. But I suspect that a few requests might trigger progress toward a future integration.
Automated client communications
No alternative software stack would be complete without a couple of programs that you didn’t realize you needed until you saw them. That’s a perfect description of Knudge, a program/app that ensures that you and your clients follow through on your respective commitments – and does it automatically, so you aren’t constantly emailing and calling clients back and forth.
Every advisor/client relationship involves reciprocal commitments. Clients need to get their financial information to the advisor in time for that first meeting and make an appointment with an estate attorney to get their documents updated. Advisors need to remind their clients when the homeowner’s insurance policy is up for renewal, and maybe invite the client to a Zoom call to check the coverage and make sure it’s still relevant. There are stock grant vesting schedules, required minimum distributions and life insurance premiums to be paid. See the emails fly back and forth.
What does Knudge do? Let’s say you noticed that a client doesn’t have a power of attorney document completed. You make a referral to a local attorney. Now, as a follow up to your most recent meeting, you want to send a reminder to the client and provide a link to the attorney’s website.
You open Knudge, and right there on the opening screen is a list of clients, prioritized by those who have tasks that need to be completed, or where you need to do something as a follow up. Click on any of the clients (or households) to see your past recommendations or action items, which of them have been completed, and which of them have not. To add the power-of-attorney follow up, you click on the tab that lets you assign a task, and the screen fills with a user experience that looks exactly like a traditional email screen – with a few added features. When you click on the “to” bar, you get a drop-down menu of your clients (or households). If it’s a household, say a husband and a wife, then you select one of them to be the primary contact for this task, but the ‘knudge’ will also arrive at the other’s email address.
There’s a drop-down menu for the header, including things like “Review Your Auto Policy,” or “It’s Time to Pay Your Life Insurance Premium,” or “Log in and Reallocate Your 401(k) Plan.” There are others, but in this case, you type in your own header: “Getting That Power of Attorney Completed,” set a timeline for when this should be completed, and in the text box (again, looking exactly like the traditional email text box) you type in something like: “This is a follow up for what we talked about regarding the power of attorney document. The lawyer we recommend for this kind of work is Joseph Smith, and here’s a link to his website: “honest(mostly)lawyer.com.”) His office number is 555-555-5555.”
You can save the header and text as a template to be used repeatedly, so the next time around you can simply add a few details custom to the client. Over time, you will be revising and improving these template messages, making your communications clearer – and faster – as you go.
Below that text box, you select one of two buttons. The first would designate this as a purely informational message, rather than a task – if, for instance, you were sending a summary of the recent client meeting. In this case, where you’re reinforcing a recommendation, you click the second button, which designates this as a task. You assign a deadline for the task, and from another drop-down box, you designate whether there will be periodic reminders sent out before and after the deadline, and you designate when the message will be sent.
Why this feature? In some cases, the action item didn’t come from a recent recommendation, but is off in the future. You can schedule a message to a client who is 62 years old, which will remind her to sign up for Medicare. Then you schedule it so she will receive it three or five months before she turns 65. You can schedule multiple messages for the future. For instance, when this year’s life insurance premium is paid, you can, on the spot, schedule a Knudge message to go out the same time next year.
Through the same interface, you can send the same message to the client’s phone, as a text message, and it will be recorded in the same way on the Knudge system. Early in the relationship, you can ask clients how they prefer to be contacted and set them up either to receive emails or texts whenever you want/need to ”knudge” them.
When clients complete a task, they can send you an email or they can go into their own Knudge interface and mark the task as “done.” If that doesn’t happen, Knudge will send out nagging emails reminding the client of the task that needs to be completed.
Knudge also allows the advisor to assign outside professionals like attorneys and accountants to individual clients or households and include those outside professionals in the Knudge communications. In fact, some client-related messages might only be sent between the advisor and the outside professional, which will be added to the advisor’s paper trail inside the program. These, too, can be marked ”done” by the accountant or attorney.
The advantage here is that clients and advisors both see their tasks all in one place and whether they’re done or not.
Remote meeting experience platform
The other program you didn’t realize you needed is Econiq,
Econiq is a remote meeting experience platform, which turns Zoom or WebX into a fully-fleshed-out presentation tool, replacing your face on the screen (not to be insulting, but it gets boring after about 10 minutes) with, at various times in the conversation, pre-inserted graphics, graphs and fintech integrations that allow you to bring up one program after another without interrupting the flow of your conversation.
To understand how it works, imagine your normal remote client meeting, where you talk back and forth, and then fumble around with sharing your screen so you can show your planning work or retirement projections, and then fumble around some more to establish contact with your software to bring up the Nest Wealth questionnaire or the Andes Wealth quizzes. The Zoom experience is disjointed, but since it’s all we have, all of us have gotten used to its limitations.
With Econiq, you create a variety of template meetings in advance, with any standard graphics that you present at, say, your initial client meetings. That, in itself, can be a huge time-saver, because it lets you pre-prepare en masse each type of meeting – the portfolio review meeting, the quarterly check-in to make sure goals and beneficiary designations are still relevant, data collection meetings, etc. – so that, when a meeting time approaches, all you have to do is load any customized graphics into Econiq in the proper order. The standard graphics and software links are already there.
In each template, you can insert text that only you can see, which cues you to what you want to say – and this helps ensure (as often happens when there are just two faces on the screen) that you don’t forget something important. This, of course, is customizable for individual clients if, say, they have an issue they’ve told you they want to discuss.
At the end of the client discovery meeting, you can pop up the Econiq calendaring function and mutually decide on the next time to meet. The time and date are captured in Econiq and sent to your CRM. Econiq will keep track of, and alert you to, all upcoming meetings so you can pull out the relevant templates and customize well in advance.
Each meeting is recorded, and Econiq will save a digital time-stamped audit trail of every agenda item, topic and click in your virtual meeting – for compliance purposes or if there was something you wanted to go back and check on.
The staff efficiency element is an important part of the Econiq value proposition. Once you’ve created templates for your various prospect or performance review meetings, they can be re-used repeatedly, letting you customize your next meeting in seconds instead of having to recreate it from scratch.
Once advisors understand the improved flow and graphic quality of an Econiq meeting, they can make client meetings come alive, graphically and with visuals. The traditional Zoom client meeting begins to look a bit like something designed by Neanderthals. It served a utilitarian purpose during the COVID emergency, but there's nothing lively or efficient about it.
And… that’s it, a tech stack that covers all the traditional bases – risk preference and IPS creation, onboarding, planning in various dimensions, portfolio management, CRM, office management, client task and communication tracker, and better Zoom meetings – at a depth and breadth that you probably don’t have currently with the programs that have the greatest market share.
Please don’t get me wrong; those more popular, better-known programs have the highest market share for a reason: They’ve met the needs of their users for years or decades. The point here is that you can go outside of the mainstream and find a lot of good solutions – too many to mention here.
I hope you’ll accept my invitation to take the annual software survey and bring a curious eye as you look down the lists, as you see categories of solutions whose existence you might never otherwise have realized. As my friend and survey partner Joel Bruckenstein keeps telling me, there’s more and better innovation in the fintech space than there is advisor attention to appreciate it.
Bob Veres' Inside Information service is the best practice management, marketing, client service resource for financial services professionals. Check out his blog at: www.bobveres.com.