CRM Systems Turn To Cloud, Workflow Tools

Amy Buttell Special Correspondent in Pennsylvania 15 June 2011

CRM Systems Turn To Cloud, Workflow Tools

As wealth managers grapple with an increasingly complex investing, financial and economic environment on behalf of their clients, customer relationship management systems (CRMs) are responding to those needs. CRMs help advisors manage larger client loads and spend more time with clients and prospective clients, says Bill Winterberg, a technology consultant to financial advisors in Dallas, Texas.

Sophie Schmitt, an analyst with Aite Group, who authored the report CRM for Wealth Managers: Approaching Total Practice Management, agrees. In her report, which was published in April, she wrote: “Advisors need to up their game in a post-crisis environment in which clients have grown more risk averse and seek more control over their investments, compared to pre-crisis years. Advisors need customer relationship management technology more than ever to help them manage the increased number of client activities in the most important and strategic way.”

It’s not likely that the wealth management environment is going to grow any less complex or competitive in the future, and CRM systems are evolving to meet those needs. Fortunately, as CRM systems offer more features and more companies enter the wealth management CRM market, costs are coming down, at least somewhat, as functionality increases, says Winterberg.

“When advisors move to web-based CRM, their costs for servers and IT professionals decrease as they can eliminate that hardware need,” he says. “Subscription fees to CRM software may not decrease much from their current levels, but there are an increasing number of capable programs available for inexpensive monthly fees and many advisors are realising cost savings by switching to more affordable software.”

Here’s an overview of where CRM systems are going in the future and which features advisors and consultants are seeing more of a need for:

Pipeline management: Outside of managing current clients and their needs, efficient and effective pipeline management is the biggest challenge most wealth management firms face, says Vilas Naralakattu, technology manager with Pinnacle Advisory Group in Columbia, Maryland. “One really important area where a CRM can be used very effectively is in prospect management,” he says.

Many wealth managers tend to believe that they don’t need their pipelines automated, but it’s always useful for management to have an overview of the state of the entire pipeline, including which prospects are in which stages and how the current pipeline compares to the historic pipeline, he adds. “Salesforce does a great job of this, but it’s an expensive proposition and many others don’t offer much beyond the basics in terms of pipeline management,” he continues.

Workflow tools: Noah Rosenfarb, principal at Freedom Wealth Advisors in Short Hills, New Jersey, uses RedTail to quantify all his processes so that as he builds his practice, he doesn’t have to reinvent the wheel every time he brings on new staff members and get them acquainted with the way the business runs. “The workflow component is really important to me and getting all that input is taking a tremendous effort of time and money to understand what our processes are and inputting them,” he says. Schmitt expects more functionality integration of workflow tools into CRMs because more and more wealth managers are seeing value in that functionality.

Cloud availability and integration: Advisors are turning more to CRM systems that are available in the cloud, on the web, versus those that are available only via software installation, says Winterberg. Systems that “play well with others” are optimal, agrees Naralakattu.

“The biggest changes in the marketplace recently are the transition to web-based CRM and increasing integrations with financial planning software tools,” says Winterberg. “Desktop-based CRMs like ProTracker and Junxure are slowly losing share to web-based counterparts like Redtail and Salesforce. They are easier to maintain, deploy across multiple users and offices and access while away from the office.

“Also, most CRM providers have increased the number of integrations they support with third party companies, so it’s now possible to view updated asset account information or view documents stored in a document management system all inside the CRM,” he continues.

Any CRMs that allow importing of data from other applications are best, says Naralakattu, because “you don’t want to manually enter all that data, especially when you get to being a firm of our size, with 600 plus clients, manually entering portfolio data or anything else is a pain, especially on a regular basis.” The ability for each wealth manager to customise reports, create dashboards, etc, is a valuable capability as well, he continues.

Mobile access: Most CRMs offer some type of smartphone access to at least a limited set of features and more are hopping on the tablet bandwagon. Still, many advisors aren’t there yet in terms of seeing the need to access CRM data on the go and not all platforms are available on all devices.

For instance, the vast majority of advisors at Pinnacle Wealth Group use Android phones, but Salesforce doesn’t yet offer an Android app despite promises to do so for the past year, says Naralakattu. Still, mobile access is an area in which Schmitt expects to see expanded capabilities over the next few years.

Social media integration: As more wealth management firms solve the compliance problems involved with social media usage, more CRMs will include social media integration capabilities, predicts Winterberg. “Innovative CRM providers will start aggregating social media updates posted publicly by clients and integrating that information with note and meeting histories,” he says. “This will allow advisors to quickly stay informed on their client’s interests and activities, and as a result, advisors can better communicate financial planning objective with more knowledge of what’s important to the client.”

Winterberg hopes that it won’t be too long before CRM developers include a feature that links client social media updates to CRMs. “Advisors turn to third-party programs to do this today, but I see this feature becoming a standard part of the feature set in a few years.”

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