Consistent Brand

Customer relationship management (CRM) software is not just “contact management on steroids,” as an executive at Schwab puts it.

CRM software can do far more than manage leads and follow-ups, says Brian Shenson, vice president of adviser technology solutions at Schwab Advisor Services. Advisers increasingly are using CRM software as a sophisticated way to run and improve their businesses, he says, by automating workflow, improving relationships with clients and developing and analyzing business opportunities. “[CRM] really takes information and turns it into insight,” Shenson says.

A robust CRM platform can streamline tasks and responsibilities for an advisory firm by providing a consistent infrastructure. The CRM system can be the primary tool for managing a firm’s day-to-day operations by listing the tasks in a workflow, along with notifications that alert others in the firm when steps are complete. “That CRM is going to provide the glue across that organization,” Shenson says.

Advisers use many technologies, and some may think of CRM as “just one of those other systems,” says Adam Moseley, managing director of Technology and Business Operations Consulting at Schwab. However, Moseley says, a shift is occurring in the industry and advisers are now thinking of CRM as the system. “If the CRM is in the center of that business environment, you begin to create a very different environment,” Moseley says.

An automated workflow allows advisers to deliver consistent service and, therefore, to build a superior brand, Moseley says. If an adviser is on vacation, for instance, the automated workflow can provide instructions for how another adviser should follow up with a client.

Process optimization reduces mistakes and ensures that clients receive excellent service, Moseley says. “Above all, [client service] is the most important thing to an adviser.” A consistent client experience can also help advisers gain new clients in an industry that relies heavily on referrals.

While some firms are focusing on building rich CRM platforms, challenges still exist. “It’s pretty daunting what these systems can do,” Shenson says, so education is needed about how to optimize them.

Advisers are doing a great job of using their CRMs as contact databases, but they have yet to fully leverage them for task management and client communication, Moseley says. A CRM is about “taking processes that happen every day in the adviser’s office and placing them in [a] system.”

According to the “2010 Schwab Advisor Services RIA [Retirement Investment Account] Benchmarking Study,” CRM workflow integration increases adviser productivity and satisfaction. Seventy-five percent of firms using CRM for workflow integration reported being “extremely or very satisfied,” while only 29% of firms using basic CRM without workflow integration reported the same. In addition, 44% of firms using CRM and workflow integration reported saving more than 20% of their time, while only 10% of firms using basic CRM without integration reported the same.

This summer, Schwab Advisor Services polled 1,608 independent advisers about their use of CRM technology. When asked to grade their firm’s use of CRM, 72% of respondents gave theirs either a “B” or “C.” While 84% of advisers agreed that the right technology was in place to make effective use of their CRM, only 6% said they believed they were using their firm’s CRM data to its fullest potential.

The most-used function of CRM is the storage of client contact information (98%); followed by preparing/sending client communications (61%); and assigning tasks to others in the firm/tracking completion (58%). So if advisers have the CRM technology, what keeps them from using it?

CRM Training 

According to 43% of survey respondents, the top barrier to effective CRM use is employee behavior. Sixteen percent think that employees do not see the value of CRM systems, while 33% think there are higher priorities for time and money than effectively using CRM.

About 25% of advisers think more education and training would help them make better use of their CRM, and 28% think deepening their understanding of the technology’s capabilities would help them use it more fully.

Broker/dealers (B/Ds) have also expressed a need for better CRMs, to manage adviser relationships. According to 2011 to 2012 survey results from Michigan-based SalesPage Technologies LLC, nearly 40% of broker/dealers would like better CRM software in the back office.

Fewer than half of respondents who currently use one or more CRM systems to manage advisers are satisfied with those systems, the survey found. Nearly half (46%) of the broker/dealer respondents use a centralized CRM system; 30% use multiple systems/spreadsheets; 15% said a CRM is unnecessary for their operation; and 9% said they do not use a CRM but need one.

Eighty-five percent of respondents said a centralized CRM is necessary to manage the relationship, communication and workflow between the back office and advisers. The survey found that 91% of broker/dealers find the process for adviser service and support moderately important to very important, but only 53% of the companies surveyed use a CRM system to manage this process.

The Future of CRMs

In the future, Moseley predicts, CRMs will get better at integrating with other technology providers, and advisers will take better advantage of this technology.

Aite Group found nearly a quarter of financial advisers either do not have access to a CRM solution or do not find the solution useful for their business model, according to a March 2011 survey of 380 advisers. Aite expects this number to decrease as the value of CRM solutions becomes more apparent and the technology continues to improve and absorb additional data.

According to Aite, older CRM tools were less comprehensive than today’s, which are Web-accessible and service-oriented. This evolution has allowed advisers to manage and automate client services; send clients tailored communications; run sales, marketing and risk management processes through embedded best practices; manage workflow tools; and integrate this data with other wealth management ­applications.

Several broker/dealers are already integrating workflows and other features into their CRMs. Schwab Intelligent Technologies rolled out Salentica Advisor Desk with Schwab OpenView Gateway, which allows independent investment advisers to view real-time information on their clients’ financial holdings within their CRM. Schwab is in a pilot program with five Microsoft workflows for the Schwab OpenView Workflow Library, which should be broadly available by the end of the year. Schwab currently has 28 workflows available to advisers who have custody assets with Schwab Advisor Services.

In 2011, TD Ameritrade integrated CRM software into its adviser platform, including more than 50 automated workflows to streamline everyday tasks such as new-account opening, client onboarding and data management. The company says these standard workflows can be customized to accommodate a firm’s existing processes and future growth.

TD Ameritrade also has a research-based software assessment tool that compiles a list of recommended CRM programs based on the needs of the adviser. The CRM software assessment tool takes into consideration features, functionality and capabilities available across 16 leading CRM vendors.