The Future of WealthTech Part Three The Future of WealthTech Part Three


The Future of WealthTech - Part Three

Part three of a three part series.

The Future of WealthTech – Creating a Road Map to the Modern Family Office Blog Three

This is the third and final blog post in a series on the future of technology in the wealth management industry. The questions and responses were based on a panel I was on at the recent Family Wealth Alliance WealthTech Summit. Previous blog posts in this series covered current technology trends and how emerging technologies will impact family offices in the future.

In this blog post I discuss how firms can capitalize on these trends and put a plan in place to modernize.

With all the technology choices, how should a firm put a plan in place that allows them to meet their needs today and ensure continuous innovation for the future?

Technology is a messy business and change can be hard. Combine these two factors and what you get is the ice cream headache that most firms experience when they try to upgrade their technology. Technology doesn’t need to be all pain and no gain. It’s important that firms do not think of technology as strictly a cost that needs to be minimized. Technology should be looked at as an investment in your business and in your people.  

Firms often wait until there is some sort of event that forces them to upgrade their technology. Whether that is a vendor that is sun setting a system or the fact that “Johnny” is leaving the firm and is the only one that knows how the spreadsheets works should not be main drivers behind change. Instead firms should adopt a “kaizen” approach of continuous improvement to technology. Kaizen is the Japanese word for “change for better”. Continuously upgrading your technology will leave you in better shape than delaying upgrades and trying a big bang approach.

As a technology vendor our development of our software is never finished. There is always a long list of features and functions that we want to add and improve. The same goes for your technology. As Kristen Schmidt, founder of RIA Oasis* noted during her “Is it the Tech or Is It the Process” conference session, your technology stack will never be finished! There are always improvements that can be made.

Where to Start

So where do you begin? There are a number of different lenses you can use to take a look at your technology more strategically. Being strategic means assessing what projects you should take on that will have the biggest impact to your firm. As I have learned from over two decades of being a product manager the hard part is not figuring out what to do. The hard part is figuring out not to do when. You have many competing demands and a limited amount of time and resources so it is important that firms prioritize. Doing a lot of things slowly may be the path of least resistance politically, but is that what is really going to move your business forward? What is going to move your business forward is saying “No” (or at least saying “No, not right now)” to a lot of projects. It’s hard to resist Shiny Object Syndrome (SOS), but your business needs technology that solves problems, reduces operational pain and creates scale.

Making What You Have Work Better

Kristen Schmidt’s advice for taking a first step is a good one. She suggests taking a look at the technology you currently have in place and see if it can be optimized. This will save you a lot of time and money. Too often when implementing a new system, all we do is just stand it up and have it do the basics. We never go back and see if these systems are fully optimized. Meanwhile, the vendor has been adding features and functions since you purchased the product. As a first step, go back and assess how well you are or are not utilizing the systems you already have in place. Are there features that you never took advantage of? Has the vendor since come out with integrations to other products you might be using? Look to partner with your existing vendors in this area. It may also make sense to bring in outside resources to provide a fresh perspective.  Often firms research tech but don’t move forward with implementation in a timely manner.  How can firms stop the cycle of Tech stage fright? They need to be ready, be realistic and ask around.

Mind the Gap

After you have gone through the process of optimizing your current technology it is time to identify the gaps. There are two ways in which you can identify gap or the lack of sufficient technology. One would be to list the services you provide as a firm and list the underpinning system(s) used to support those services. Do you offer financial planning, but do not have financial planning software? That is a gap. Is your client reporting based entirely on spreadsheets? Is all of your client correspondence tracked in email and documents? Are you using consumer products for tax prep? Create a matrix of services that you offer and identify the technology you use to support these functions. This will be a good first step in identifying gaps.

The second process is to start to identify and prioritize major pain points. What are the functions that are requiring lots of human capital? What deadlines are being missed and why? What particular processes are prone to errors? How much manual processing and data entry is going on?

Identifying your technology needs is not about buying cool technology, but adopting technology that solves problems. Users rarely adopt technology which does not operational reduce pain. Technology is ultimately about reducing pain, creating scale and creating value for your firm and your customers. The process should not start by looking at a bunch of tech demos. This is where the confusion starts. You need to create a roadmap based on your business needs and pain points. This roadmap will act as your north star and guide you through the decision process on what projects you should address and in what order.

Change can be difficult and technology, but having a strategic roadmap will help act as that strategic North Star as you make your journey towards modernizing your firm. It may take longer than expected and cost more than you budgeted for, but remember the biggest risk often comes from not taking any risk at all and avoiding makes any changes.

For Part One, click here.

For Part Two, click here.


*RIA Oasis is not affiliated with Datafaction.