Why “Features First” And “Stand Alone” Is Entirely The Wrong Approach To Improving Your CRM

Alessandro Tonchia InvestCloud Head of Strategy (EMEA and APAC) 31 March 2022

Why “Features First” And “Stand Alone” Is Entirely The Wrong Approach To Improving Your CRM

CRM upgrades are happening at pace across the industry, but wealth managers should be careful not to be seduced by "shiny features", one expert argues.

Wealth managers know by now that effective Client Lifecycle Management (CLM) is key to enhanced client communication, planning and operational efficiency. Yet all too many wealth managers are being seduced by feature tick lists touted by many point Client Relationship Management (CRM) solution vendors, when actually a holistic and personalized focus on CLM business outcomes should be the north star guiding any technology investment in this space, argues Alessandro Tonchia, Head of Strategy, InvestCloud (EMEA and APAC).

This piece forms part of this publication's new report "Technology Traps Wealth Managers Must Avoid 2022", published in partnership with EY, which is available for complimentary download now.

Very few good things can be said of the coronavirus pandemic’s ramifications, but one side effect is that it has definitively shaken up the wealth management sector and accelerated its digitisation into warp speed. The need to be able to develop and deliver high-touch relationships remotely and digitally is now absolutely essential.

In combination with the longstanding profitability pressures the sector has been laboring under, this sudden – and probably permanent – shift in how business is carried out has propelled new Client Relationship Management (CRM) systems right to the top of many firms’ shopping lists. But while firms are rightly seeing rapid technology upgrades as business-critical, one expert who has seen it all when it comes to CRM systems believes all too many are going about this entirely the wrong way. 

As Alessandro Tonchia, Head of Strategy, InvestCloud (EMEA and APAC), observes, implementing a new CLM solution is undoubtedly a significant change with implications for personnel and processes reaching far beyond just the relationship management team, so firms naturally want to ensure they select the very best system available. Wealth managers’ attempts to differentiate among a plethora of CRM providers, many of whom would claim to support end-to-end CLM, can then tend to become a “beauty parade comparing widgets and gadgets” when in fact far deeper thinking is what is required. 

A day in the life of an RM  
“The trap wealth managers often fall into is buying a ‘shiny’ product without having thought hard enough about how it would make a day in the life of a relationship manager more effective, and ultimately enhance the client experience and their perception of what the institution is doing for them,” he explains. “‘Features first’ is the entirely wrong way around, as your starting point should be the outcomes you wish to achieve to manage the entire client lifecycle and how the solution will support those holistically.”

“Holistic” is of course a word much used in the wealth management sector, but Tonchia’s use of the term really does speak to its true meaning: that all the elements of a true CLM system are interconnected and can only make sense and make a real difference to the business with reference to the whole client relationship. Wealth management firms should focus on how the work of client lifecycle management should ideally happen, rather than focusing on a set of features which offer no bridge to the desired end result. 

A foundational step to making wealth management really work is supporting people in all the myriad roles they fulfil. “Each institution will have a unique business vision of how it wants relationships to play out in its target segment, or segments. So, it’s about taking those objectives and mapping them to the user journeys the CLM solution needs to support – for each persona involved: the RM, their assistant, the portfolio manager, the chief investment officer, the compliance professional, the head of sales and, of course, the end-client,” Tonchia says. “The business of managing wealth is the relationship management process per se, so if you want a CLM system adequate to support an efficient wealth management institution you need to focus on who does what and when, then pull everything together through the CLM system every step of the way.”

Creating collaboration   
“It should go without saying that facilitating deep, highly digitized collaboration among all these parties, but especially between the client and their advisor, is absolutely central to our vision of what a CLM system should do,” he continues. “If you can push a recommendation to a client via a chat function or portal, that means that not only can you act quickly but also that you get a full loop because everything gets tracked and measured. The client’s response becomes part of the dataset, then you can also apply machine learning to those results to figure out what works and what doesn’t.”

The other, sorely neglected part of the puzzle is that the CLM system has to support the entirety of the client lifecycle in the broadest possible sense – even as that extends beyond the walls of the institution to different financial intermediaries or advisors of the client, as well as to externally-managed assets, which should be brought into the tent.

As Tonchia highlights, at the upper end of the wealth spectrum in particular, relationships take place within an increasingly complex wealth management ecosystem. “To be truly fit for purpose today, a CLM system needs to comprehensively orchestrate all client-facing processes and tightly integrate into the entirety of prospecting, onboarding, suitability, risk profiling, investment advice, financial planning and every other facet of client lifecycle management,” he says. “This is just one reason why institutions absolutely require CLM systems built specifically for all client lifecycle steps of the wealth management business.”

A dearth of wealth-specific data models   
Another key requirement is the need for “wealth-management-specific data models which can support all the disciplines involved in serving complex clients and the triggers which arise from them”. As Tonchia explains, Application Programming Interfaces (APIs) may be regarded as a panacea for integration and could, for instance, easily integrate any generalist CRM with a private equity platform. However, in the absence of an industry-specific data model, a CRM “will not ‘understand’ private equity, that the commitment made doesn’t coincide with the initial investment, and that a capital call might come” and therefore fail to properly track relevant amounts and actions.

CRM systems might offer a wealth of API connectivity, but there is a real dearth of wealth-specific data models to build businesses upon. This underappreciated nuance scuppers many a system and client service upgrade right from the start, in his view.

Higher ambitions   
“APIs have amazing features technically, but it’s the data model which makes the difference,” is his verdict, since it is this which allows for real understanding and actionability to be generated by a holistic CLM system – alongside the high levels of automation firms of all types need today. As he points out drolly yet quite rightly, “Even the most basic system can remind the RM of their birthday, but is that really where firms’ personalization ambitions should end?”

“It is tracking the important things that happen in the client’s financial affairs and interactions with the institution, and then prompting timely action which makes relationship management substantial rather than superficial,” he says.

In essence, Tonchia’s view is that wealth managers should be far bolder in what they want their CLM solutions to achieve – and not to stop with traditional notions of CRM functionality. “Huge gains in sales effectiveness, an enhanced client experience and far greater operational efficiency, particularly around compliance, are all very much within reach if the right CLM solution is at the heart of your business,” he asserts.

None of this is to say that feature strength doesn’t have a role to play – after all, true CLM solutions like the one InvestCloud offers provide many, Tonchia emphasizes. It is more that they are important only insofar as they serve the firm’s objectives, target KPIs, desired client experience and ways of working together. Their exact configuration, and what is turned on and off is analogous to the “fingerprint” of that organization, therefore it makes little sense to be seduced by features on a standalone basis. 

Tonchia’s concluding advice centers on continuity of ethos: “All wealth managers are aiming for holistic and truly personalized relationship delivery, but they can only achieve that through a holistic and personalized approach to building their ideal CRM system,” he says. “They must seek strong foundations for digitized business processes, or additional features will be cosmetic ‘upgrades’ at best. Don’t be seduced by superficialities.” 

About InvestCloud      
InvestCloud is a global company specializing in digital platforms that enable the development of financial solutions, pre-integrated into the Cloud. The company offers on-demand client experiences and intuitive operations solutions using an ever-expanding library of modular apps, resulting in powerful products. Headquartered in Los Angeles, InvestCloud has over 20 global offices including New York, London, Geneva, Singapore, Tokyo and Sydney, supporting trillions in assets across hundreds of diverse clients – from the largest banks in the world to wealth managers, asset managers and asset services companies.

To find out more, please visit, or contact us at  

Register for WealthBriefing today

Gain access to regular and exclusive research on the global wealth management sector along with the opportunity to attend industry events such as exclusive invites to Breakfast Briefings and Summits in the major wealth management centres and industry leading awards programmes