Many advisors are struggling to identify a fully-integrated solution despite increasing pressure from clients' evolving demands, according to a new SEI white paper.

The report, Winning Advantage: The Financial Advisor Playbook for Achieving True Integration, says advisors need to look at their businesses and the client experience with "a new set of eyes," leveraging new technologies to work more efficiently, connect with clients more often and provide more valuable information. "Simply buying new technology is not enough," it says.

"Advisors often confuse compatibility with integration, largely because of how the technologies are marketed," said Kevin Crowe, solutions unit leader for the SEI Advisor Network. "Just because the CRM software and the portfolio management tool are compatible with one another does not mean they are a single, integrated system." Only when a "truly unified" system is implemented will advisors realise the "many business benefits" owing to increased efficiency, he said.

In the paper, SEI points to a recent study by Aite Group, which illustrated that advisors waste, on average, two days each week on operational tasks - time which could be used serving existing clients or indeed acquiring new ones. By contrast, with a fully-integrated system, staff spent 11 per cent less time dealing with such tasks.

Moreover, integrated technology provides "considerable benefits" in terms of how advisors are perceived by clients. "By demonstrating technological sophistication, clients feel that an advisor is better able to meet their needs," SEI said. As an example of client expectations, according to another recent study by Aite Group a third of young affluent or high-income investors shifted their investments when they found a provider with better online tools.

However, the challenge is not to convince advisors that integration is the way forward, but to explain how to go about it. For example, 63 per cent of some 250 financial advisors recently surveyed by SEI use at least four vendors or separate technology systems - highlighting their commitment to adopting new technologies. But as SEI said: "To put it simply, there's been a lot of talking about integration but not a lot of doing."

Technology as "a means to the end"

It is important to keep in mind that not every piece of new technology will be beneficial to every advisor and "continually buying" can have a negative impact, says SEI.

Selecting the best technology solution should begin with the advisor evaluating the firm’s operational and business processes along with its goals. "This starts with determining what information is most valuable to your business and organising that information to align your top priorities," SEI said. This also enables advisors to identify holes in their current structures, while presenting an ideal time to begin involving staff in the process.

The second step the firm recommends is identifying and eliminating underutilised technology, which advisors can identify by grading their current technology to see where it lives up to or falls short of their actual needs. After this, they can create a plan to implement a unified system that integrates all of their technology and software tools, whilst ensuring that their employees are comfortable with the new technology and receive appropriate training.       

"What’s become more apparent is that simply buying the ‘latest and greatest’ technologies isn’t a recipe for success," said Steve Eyer, vice president of VF Investment Services in Wayne, PA. "Technology must be looked at in the context of your business, in terms of what best enhances the firm’s overall strategy and client experience."