Mimic was recently asked to perform an audit of  a potential client’s network infrastructure as part of our Total AdvisorCare™ service offering.  And as is often the case, we found that the firm’s current level of technology was outdated, and well past the recommended useful life of the hardware and software they were running.  So much so that it was causing issues with their ability to get the most of the RIA specific software packages and services they were already paying for.  So, I thought I’d write about the importance of keeping your RIA practice’s technology updated, to not only get the most of your technology investment, but also to make sure that your firm and your employees are not technologically “left behind” as the rest of the world moves forward.

RIA firms tend to fall into two distinct camps when it comes to their office technologies.  There are those firms that embrace technology and are always striving to push their firm’s technological capabilities, sometimes to the razor’s edge, when and where they are able.  And then there are those firms that struggle with the ever changing landscape of technology.  These firms are constantly struggling to keep their systems and software at the same state because they find technological changes to be too disruptive to their business processes to make the effort to keep up with the rest of the world.

The following are just a few key reasons why an RIA firm should really try to stay current with the current “main stream” level of technology, both on the hardware and software side.  We’ll explore the following reasons below in the next few blogs:

• Technology Obsolescence
• Workforce Productivity
• Aging Skill Sets
• Disaster Recovery / Business Continuity
• Security

TECHNOLOGY OBSOLESCENCE

There was a post in a recent Schwab Portfolio Center User’s Group on LinkedIn that really illustrates this point clearly.  It’s important for a firm to move forward with technology, whether it be in workstation, server, or laptop operating systems or with versions of their industry specific software to avoid being caught in the trap of being FORCED to move because of obsolescence.

As new versions of hardware and software are released, technology companies are forced to end support for older operating systems so they can concentrate their efforts on supporting the newer versions coming on the market.  Over the next 2 years, RIA’s will be experiencing this on a grand scale.  Recently our client firms have seen more announcements from software and hardware vendors that support for Windows XP and Windows Server 2003 will be or has already being ended.  The reason for this?  Windows 8 and now Windows Server 2012 are already at the “Release Candidate” state.

This means that very soon, if your firm is not already using Windows 7 and/or Windows Server 2008, it’s time to upgrade soon, or find your firm left behind when you call in to support your “legacy” systems.  This is going to be a huge challenge for RIA firms everywhere.  An example of this is as follows:

Estimates are that Windows XP still has roughly 40% of the desktop market, which means these firms have to move up to Windows 7 soon in order to “keep up” with the minimum requirements of their industry specific technologies. Windows 8 will not be supported by most software vendors for a while, so there will be very little choice for RIA’s as to which version to go with in buying a new workstation.

Next time, we’ll take a look at going with the “Technology Trend” as a means to increase workforce productivity.

Last week I was reviewing the Investment News Daily’s ranking of the top 101 RIA Firms in Illinois and while I did not find the list to be complete, I was excited to see so many of Mimic’s clients represented.  Upon closer review, I was elated to learn the following:

• Mimic supports 12% of the 101 RIA Firms represented on the list.
• Mimic supports 20% of the Top 50 RIA Firms represented on the list.

What a great feeling to know that Mimic’s message of providing a highly specialized and customized IT support service specifically to RIA’s is being extremely well received in the Illinois RIA Community.

Having our company be so focused on the needs of RIA firms truly allows us to be partners with our clients.  It allows us to focus and solve IT issues that RIAs face on a daily basis.  From implementing tried and tested compliance technologies to installing portfolio management systems, to working directly with your industry specific vendor or custodial house, Mimic is happy to continue to be the ONLY technology partner exclusively serving RIAs in Chicago.

In the coming years we look forward to gaining an even larger share of the Illinois RIA market.  As we begin to expand our services into other geographic markets, we look forward to helping RIA firms in new markets solve the same issues we have already solved for clients in Illinois.

To all our clients on IND’s list, my sincerely congratulation!  We are proud to represent such an esteemed group of firms.  We look forward to aiding you in continuing to be an example to your peers.

This is part #3 of my blog regarding 3 challenges facing a RIA firm’s growth, and how the proper use of technology can help an adviser firm solve those challenges.

Challenge #1 and #2 can be read in my previous blog posts.

Challenge #3 facing RIAs according to Ann Marsh’s article, The Largest RIAs Race to Scale, at Financial-Planning.com is Differentiating Themselves from Their Competition.

3.  Differentiating Themselves from Their Competition

From a technologist’s perspective, there are a number of ways that a RIA firm can use technology to differentiate from their competition.  When discussing this issue with clients, some of the best ways we have deployed technologies can be grouped around enhancing the client experience.  A few suggestions that come to mind are below…

Video Conferencing

There are many technologies that can enhance the client experience that are very easy to deploy yet set RIA firms apart.  An example of this would be using inexpensive video conferencing technologies like Skype or Facetime to communicate with your clients.

With the proliferation of mobile devices (iPads, iPhones, Adroids, tablets, etc.) there are more opportunities for RIA’s to be in direct face to face contact with their clients.  By setting up Skype connections in RIA conference rooms or at their workstations, an advisor can have a “virtual meeting” with their clients to go over their quarterly statements, perform planning sessions, etc., all from the convenience of the office (less travel cost).  Chances are that their clients already use these technologies to communicate with their friends and family, why not their advisor?

By deploying these technologies, their clients feel a personal connection with the advisor, are impressed with the client’s use of today’s relevant technologies, and the entire firms gets the reputation of keeping up with current technological advances to better the client experience.  An added bonus is that these sessions can be recorded and archived in the client file for compliance purposes.  The compliance guys will love that!

All of the above can be done using services other than Skype as well.  Apple’s Facetime feature can do the same thing on Mac systems.

Presentations

Another example of technologies that can differentiate an advisor firm by enhancing the client experience is by using more technologies in the client presentation or meeting.  Many (actually most) of our clients have flat panel TV’s in their conference rooms.  These TV’s are normally connected to a network computer which allows the TV to be used as a monitor for presentations.  Again, this is not a new idea and many RIA firms have this same setup already in place (for those that don’t, it’s good idea to set this up).

You can add-on to this idea by deploying technologies that project your iPad applications on the same TV screen (Apple TV has a feature that allows this to work wonderfully).  You can even use your iPhone as a remote control for the iPad.  This feature is works especially well in Keynote (Apple’s presentation software).

Social Media

There are of course many other ways to use technology to differentiate your RIA firm.  It helps to have an open mind and pay attention to what the general public is using to make their lives easier.  Technology awareness can also increase your brand awareness through the use of Social Media sites.  Make sure that you have all your bases covered with Social Media via an archiving tool or service (we’ve found SMARSH to do a great job with this).

The point is that making good use of today’s technologies to make their client experience better, sets a RIA firm apart from their competitors by giving them a perceived technological edge over other RIA firms not able or willing to use everyday technologies.

This is part #2 of my blog regarding 3 challenges facing a RIA firm’s growth, and how the proper use of technology can help an adviser firm solve those challenges.

Challenge #1 facing RIAs was to increase efficiency is the practice, and I addressed that in my previous blog.

2. Customize Their Technology

Challenge #2 facing RIAs according to Ann Marsh’s article, The Largest RIAs Race to Scale, at Financial-Planning.com is customizing their technologies to fit the firm’s workflow and processes.

In discussions with our clients, we’ve found that the clients who are most successful at customizing their technologies for their firm are the clients that look at ways to integrate all their RIA specific applications.

RIAs typically have the following systems / software packages that are specific to their industry:

• CRM
• Financial Application
• Portfolio Management Application
• Portfolio Re-Balancer
• Document Management
• Compliance Technologies
• Account Aggregation Tools

RIAs must also have the standard business systems that firms must have to function in today’s business environment.

• Email / Collaboration
• Printing
• File Sharing

As a technologist, when presented with the challenge of how to customize an RIA’s technology to work with their office workflows, I always start with the structure of the clients Network Infrastructure (servers, workstations, operating systems, routers, security, etc.).

I would then begin to group together business systems that relate to one another.  For example, the proper implementation of CRM system will have a wide reaching effect on many systems if they are deployed correctly.  A CRM system that can be linked to a RIA’s portfolio management system (PMS) is a very attractive customization that saves time and gains efficiency in the practice.  From there, a RIA can see that if their re-balancer system and financial planning tools can be integrated into the PMS, then the firm can gain a lot of efficiency from a complete system all focused around the CRM.

I’ve grouped a few of these together in a Mind Map (below) to illustrate my point.

By organizing all the systems as above, I can then plan to make sure that the Network Infrastructure is capable of supporting the firm’s business systems.

I’m a technologist at heart, and as the saying goes, if your a hammer, every problem you encounter looks like a nail.  And because Mimic’s business is based around being the technology arm of our RIA clients’ businesses, we are constantly looking for answers to our clients’ most pressing questions.

So as I was reading an interesting article on the Financial-Planning.com website regarding The Largest RIAs’ Race to Scale, I began to wonder what I, as a technologist, would do to help my RIA clients solve 3 Challenges facing RIA’s mentioned in the article.

The article mentions the following 3 Challenges facing a growing RIA firm:

1. Boost Their Efficiency
2. Customize Their Technology
3. Differenctiate Themselves from Their Competition

In today’s blog, I will cover challenge number #1 above from a technologist standpoint, and how I see technology playing a key role in addressing this crucial challenge in a RIA firm’s growth.

1.  Boost Their Efficiency

This challenge is probably the easiest of the 3 challenges to address with technology because so much of today’s technological innovations are geared towards increasing worker productivity and efficiency.  If I had to narrow it down to four aspects for any of my RIA clients to concentrate increasing efficiency, it would in the following areas:

• Increase workforce mobility
• Securely increase data accessibility
• Improve workforce collaboration
• Reduce unnecessary or unexpected down-time

The exact technologies to deploy that addresses the above bullet points would vary greatly on what the RIA client currently has in place in their existing network infrastructure.  But there are a number of technologies and solutions that would accomplish the challenge of increasing a firm’s efficiency by concentrating on those four areas.  In up coming blog posts, I will be addressing each of the above bullet points and giving examples of technologies that can be used to address that aspect of the challenge to boost an RIA’s efficiency.

With respect to increasing workforce mobility, you’d have to be living under a technological or social rock not to recognize the strides made to increase mobility lately.  From Apple’s iPad and iPhones to the latest Android and other tablet devices, mobility has been the hottest selling innovation for the past 5+ years.  But are RIA’s using this technology effectively?  The answer is a resounding YES!  RIA’s are actually early adopters of tablet technology according to a Joel Bruckenstein’s December 2010 article on the Financial Planning’s 2010 Technology Survey which stated that 17 percent of advisers had purchased an iPad and an additional 51 percent planned on its purchase.

The use of these devices certainly increases a RIA’s workforce mobility and configured properly can allow their employees to securely access information quickly while away from the office.  With proper integration with a Microsoft Exchange 2010 server, mobile devices (including iPads) can be remotely erased (among other useful tasks) in the event the device is lost or stolen, making them much more secure than in the past.

Integrating these tools into the RIA’s network infrastructure will invariably lead to a more efficient workforce.  In many cases we’ve help integrate various “Cloud Technologies” into an RIA’s practice to increase the the firm’s collaboration between employees, vendors, and customers.  Using outside services such as Dropbox or Box.net can help firms quickly and efficiently share files and up-to-date-data with their off-site team members.

Lastly, RIA’s can boost efficiencies by having their networks available and online when they need it most by proactively maintaining and actively monitoring their network infrastructure.  The right technology partner can monitor their network 24/7/365 and prevent problems from arising before they cause network down time.  This is crucial to any business, but my experience has shown that RIA’s are much more sensitive to down-time than most other companies. That technology partner must also perform routine and emergency maintenance tasks during non-business hours.  This is extremely important in making RIA’s work more efficient during the time they are at work.  And most importantly, the technology partner must have the knowledge and experience of designing and administering a network infrastructure specifically for the RIA industry.  They must be familiar with the unique programs needed to run the RIA practice (portfolio management systems, CRM’s, re-balancing software, etc).  This will save RIA firms valuable time in training and/or re-training their technology support partner on the unique needs of their business.

It’s clear to most that technology can make a significant impact into boosting an RIA firm’s efficiency.  Just make sure that the technology being deployed is the right fit for the firm, and that it is executed properly.

In the next blog posting, I’ll address the importance of #2 - Customizing Your RIA Firm’s Technologies.  Until then… good business!