Top 10 technology trends for advisors

With that in mind, Segal offered what he called the “top 10 technology trends,” which, if utilized properly, will drive successful businesses:

1. Increasing capability. Processing power is growing, Segal said, while storage is getting cheaper. As one example: a megabyte of storage costs one 150-millionth of what it cost 25 years ago. Advisors must ask: what does that mean to me and how can I use it in an effective way?

2. Mobility. “Mobility is a game changer,” said Segal, who compared the smartphone to a mobile TV/computer monitor. For advisors, that means that as these tools —smartphones, tablets and laptops — change, you will have to change the way you manage your business and your ability to interact with others. The trend toward mobility also changes your clients’ expectations.

3. Integrated workstations. The way your various programs — such as your client-relationship management, financial planning and portfolio-management programs — come together to help you serve your clients is another important trend. “You can’t look at technology in a vacuum,” Segal said. You need to think about software as a tool to improve your ability to serve your clients.

4. Integration. A sub-trend of No. 3, integration refers to the various ways in which technology platforms work together. Reduced need for data entry is an obvious benefit. But as integration becomes more sophisticated, advantages will become more profound. In some cases, users are already moving seamlessly between applications. This trend can bring significant savings in time and increased productivity.

Many software vendors are working on integrating their products with those of other vendors. But, Segal said, software developers need to know what users need. He urged advisors to present to their dealer firms and software vendors cases demonstrating how they could improve productivity and profitability through software integration.

5. Workflow. Getting computers to work for you is a challenge. “How do you define your requirements?” Segal asked. “You define them in the context of workflow.”

The challenge, he said, is defining your workflow in a level of detail that is understandable to computers. In order to get computers to follow a command, you must define every detail.

6. Cloud-based computing. In the cloud, your servers no longer sit in your office. They are in secure, shared-data centres. “So, if your sever gets vaporized … you wouldn’t be down for one second,” according to Segal. Cloud computing, which costs about $400 a month, is not for everyone, he said. He recommends doing a cost/benefit analysis before making the change.

7. Outsourcing. The trend toward outsourcing has evolved to a point where financial advisors should consider letting outside specialists handle activities in practically any area of their businesses. “If it isn’t a core competency,” Segal said, “and if it isn’t something you believe adds unique value and you’re especially good at it, you need to look to outsourcing.”

The options are no longer doing nothing or hiring a fulltime employee. Outsourcing adds a wider range of possibilities.

8. Social media. College kids grew up using digital technology, Segal said. “Social media is here to stay,” he added, “and it is going to become more and more prevalent.”

Ten years from now, working without social media will be comparable to working without a telephone today, Segal said. Advisors must embrace social media in order to do business with the next generation of clients.

9. Crowd sourcing. This trend enables the world of Internet users to bid on an outsourced project — with great financial benefit. Segal cited the example of an advisor needing a new logo. Traditionally, you might contact three or four design firms, receive quotes perhaps ranging from $5,000 to $10,000, meet a short list of candidates and assign the task for, say, $7,000.

Today, you could post your assignment on a crowd-sourcing site, and offer payment of $200 for the same service. Anyone in the world could submit a design. You might receive 14 submissions from eager designers. You would choose your new logo and pay only $200. “The ability to use this global network to get work done more effectively is huge,” Segal said.

10. Big data. This is a macro-trend that advisors might not be able to act upon immediately, Segal said, but it will affect you. Massive amounts of data, much of it unstructured, exist on various platforms such a back-office systems, CRM systems and even Twitter feeds. The ability to translate this data into forms that your clients can use will be highly valuable.

Before you get excited about any technological trend, Segal cautioned, you must consider its direct effect on your business. Any investment in technology, Segal added, should increase the quality and consistency of your client experience, deliver high profitability at low cost and enhance regulatory compliance.