Why do so many financial advisors use multiple unintegrated systems?

By Jun 8, 2015 No Comments

Earlier this year, in preparation for a presentation I was delivering at Cover Magazine’s Technology in Financial Services conference, we (Linktank) conducted a survey among independent financial advisory practices.  One section of the survey related to the software systems (or combinations thereof) employed by practices to meet a range of business needs (such as client relationship management, compliance, management information, financial planning and advice, practice management, client reporting, prospect management, revenue administration and so on).

We weren’t particularly surprised by the results.  As it turns out, almost 75% of respondents make use of more than one system to meet different needs within their businesses.  This means that multiple systems, usually requiring multiple versions of the same static client information, are separately (and often manually) maintained.  In most cases, little or no data is shared across these systems and spreadsheets are commonly used to try to stitch information together.  The implied inefficiency is staggering.

Isn’t it possible to service business requirements with a single solution?  Are software products all competing in the same spaces and leaving similar gaps?  Are independent practices unable to successfully implement solutions to meet all their needs?  Are costs and other resources a limitation to businesses doing innovative things?  Or is it just a matter of preference for combinations of favoured tools (and an unfortunate side-effect that most solutions don’t offer the option of integration with other industry-specific tools)?