In today’s financial services industry, technology isn’t just an accessory; it’s a bare necessity. Technology is essential in gathering information and providing advice to your clients. And demonstrating a grasp of technology can demonstrate to your clients that you’re able to keep abreast of the changes that drive our industry.

The challenge for many financial advisors lies in determining what technology they should be using, and in understanding how to use it. Assuming you have the basics — a desktop computer that’s wired to the Internet — a few pointers on choosing and using the tools that best suit your practice can help you provide better service to your clients.



> Smartphones

Let’s start with your phone. A recent survey by Virginia-based market research firm Telecom Trends International Inc. predicts that the number of smartphones sold worldwide would surpass “dumb” mobile phones by 2016.

If you don’t already have a smartphone, you’re already behind the pack. Smartphones differ from their predecessors in their ability to handle data, browse the web and run applications — so they function as a cross between a conventional cellphone and a computer. Smartphones currently available include the BlackBerry from Research in Motion Ltd. and Apple Inc.’s iPhone. New developments are emerging on the smartphone horizon, such as Google Inc.’s Nexus One, which hasn’t hit Canada yet, and the Droid, from Motorola Inc.

The smartphone has all the benefits of a conventional cellphone but also enables you to send and receive email, making you more accessible to clients and the people at the office, no matter where you are. Many smartphones integrate with Microsoft Outlook, so you can keep your appointment list up to date. Or, if you use an online scheduling application, you can update your schedule from any computer or smartphone. (See section on “Going online,” below.)

Microsoft announced in February that it will ship its Windows 7 Mobile Series platform this year. Designed for both business and private users, it will feature a mobile version of the Microsoft Office Suite, which includes a version of Outlook that links to an Exchange server.



> Laptops And Netbooks

When you’re on the move, even the most advanced smartphone isn’t always going to be enough. You may find it difficult to carry out more intensive tasks, such as letter writing or extensive emailing, on a smartphone. A laptop computer is necessary to make you truly productive when you’re away from your desk.

“Small businesses, in particular, will be more focused than their larger cousins on purchasing desktops, mobility devices and notebooks,” says Paul Edwards, director of small to medium-sized business and channel strategies for technology industry research firm IDC Canada in Toronto.

Many small-business people are replacing their desktop computers with laptops that serve just as well on the desk as on the road. If your software supports an Apple MacBook Pro, you may want to consider one. These well-designed machines feature a top-notch operating system and — at least, for the time being — are relatively untargeted by writers of “malware,” malicious software designed to steal your data. If you must use Windows, there is a dizzying array of makes and models to choose from.

If you are replacing your desktop unit with a laptop, consider a larger, 17-inch screen. Don’t go any smaller than 15 inches, as you will be spending most of your working hours with this tool.

Or, you might choose to leave the desktop in the office and buy a “netbook” to take on the road. These lightweight devices can fit into a slipcase and be carried as easily as a paperback book. Most netbooks use the Intel Atom processor, designed to deliver the best possible performance while drawing the least amount of power.

These machines are not cut out for intensive gaming, but they will enable you to manipulate spreadsheets, send and receive email comfortably and write letters. Many netbooks have keyboards that are almost full-sized. And netbooks are significantly less expensive than laptops.



> Security

No matter how simple or complex your office technology, security is the most important issue, especially when dealing with sensitive client data. More than one-third of small businesses are still without basic antivirus protection, according to a security and storage survey conducted by Cupertino, Calif.-based Symantec Corp. last year. And yet, instances of malware have risen exponentially in the past few years. Last year, Bilbao, Spain-based antivirus firm Panda Security SL discovered 25 million new variants of malware — most of which would just love to steal your passwords and your clients’ data.

@page_break@A firewall is vital to ensure that your computers are protected from Internet worms that scan open ports on computers connected directly to the Internet. (I learned this lesson too late a few years ago, when I found that a computer had been infected by malware and co-opted onto a “botnet” — a large collection of computers remotely controlled by online criminals. Such “zombie” computers can be made to do anything from sending spam from your company email address to hosting pornography.)

Every version of Windows released after Windows XP Service Pack 2 (2004), now comes with a built-in software firewall. Such security measures show how important it is to keep your operating system up-to-date.

“Organizations that have stayed with older versions of Microsoft Windows (XP) and Office (2003) should begin deploying the newer and reliable versions of the software to take advantage of their new features,” says Andy Woyzbun, lead research analyst with London, Ont.-based research company Info-Tech Research Group. “While there is generally no need to accelerate the change, holding back makes no sense.”

Encryption, the process of transforming information into a form that makes it unreadable to anyone except those authorized to read it, is also a key security issue. You may think that your data is safe simply because it is stored on a computer in a locked office. However, as we have seen repeatedly in the past few years, this does not guarantee the security. Full-disk encryption is a must for financial advisors, who have a fiduciary duty to protect their clients’ information.

Windows Vista and Windows 7 both come with BitLocker, a full-disk encryption mechanism designed to protect all the data on your home volume (the partition that stores your main operating system). It is vital that you make use of this — or an equivalent full-disk encryption system, such as that offered by Santa Clara, Calif.-based McAfee Inc. or many of the other security vendors. That way, if your computer is stolen, you will be able to tell both your clients and the regulators that any client data on it is safe from abuse.

Closely aligned with security is the issue of availability. The more data you decide to store electronically, the more concerned you should be about your data being corrupted.

Businesses need to restore data or systems easily and protect against new threats through automated, “event-driven” backups, according to Symantec Canada. So, it is important to ensure that your data and the systems on which it resides are secure, backed up and able to be recovered quickly.

A simple power surge — which can be caused by a lightning strike, for instance — is enough to send your client data into the void. Backing up using an external disk drive connected to your computer is one simple, sensible measure. But if something happens to your premises, such as a fire or theft, then you may find that your backup has disappeared as well.

Online backup services can help you to keep your data safe from harm outside your offices. Just make sure the service provider guarantees encryption — both during transit and when it is stored online.

Symantec offers its own backup service, called Backup Exec. It can back up data held on desktops as well as the Windows Small Business servers used by many small financial advisory practices. Another desktop-focused solution is Mozy, which, like Symantec’s system, uploads all your data to an encrypted server, then incrementally uploads any changes to the data from your hard drive on a regular basis.



> Know Your Software

Many advisors use presentation software provided by their dealers to show clients colourful, graphic representations of their accounts and other financial concepts. If you don’t have such software, you can still wow clients with graphic representations of the data representing their portfolios by using programs that are probably already installed on your computer.

Microsoft PowerPoint has a feature that enables you to link a chart slide directly to underlying figures from within an Excel spreadsheet.

You may already have been using tools such as Microsoft Office for years without realizing their full potential, says Andrea Van Leeuwen, director of small and mid-sized business and distribution for Microsoft Canada Co. in Mississauga, Ont. Van Leeuwen recommends taking one or more of the training courses for Office programs that are available online, free of charge. (Visit www.office.microsoft.com/training. )



> Social Networking

Financial advisors thrive not only on knowledge but on appearing knowledgeable. Don’t make the mistake of thinking that online social networking services such as Twitter are simply for teenagers. Many analysts, consultants and other industry commentators have built their reputations by linking to informative articles and providing their own perspectives on events through online social networking applications.

Of the many free, online tools that work in conjunction with Twitter, HootSuite is highly functional. HootSuite lets you follow insightful Twitter users — such as financial market pundits and practice-management gurus — and classify them into groups. It also lets you post your own Twitter entries — such as reminders about RRSP and income tax deadlines — and track who is following any links that you post to give you a sense of your own online popularity and relevance.

Using a tool like this to bolster your online persona will help you to target savvy young prospects who may already be high earners, or who are likely to be in the future.



> Getting Information

The financial services industry thrives on information — but that information can flow like water from a firehose. Technology can help you by sifting through the flood of information that’s out there and bringing you the stuff that’s important to you.

That’s what a news aggregator does. Really simple syndication (RSS) has revolutionized the way we consume news online. Instead of having to surf each website individually to find out what is happening in the world’s financial markets, a news aggregator can collect the information for you, dropping it into an easily readable email-style list. Most popular news websites now offer RSS feeds, as do some financial news sites, such as www.investmentexecutive.com.

Some websites, such as Google Finance, even give you the chance to tailor specific RSS feeds based on a portfolio of companies and markets. You can peruse all the news and blog entries that Google can find related to XYZ Co., for example, over morning coffee before calling a client who holds shares of that company in his or her portfolio.

There are a plethora of RSS readers to choose from. My personal choice is Google’s Reader, a free RSS reader that is accessed online through your browser.

> Virtual Assistants

You can’t get computers to solve all your problems, but you can use your computer to assign mundane tasks to real, eager human helpers. Virtual assistants are specialists who provide personal assistant-type services online, freeing you to do the work you do best — interacting with clients and prospects.

I use a virtual assistant based in Kansas. We haven’t met but, for a relatively low hourly rate, she keeps my calendar updated and my contact databases organized, and performs a range of routine personal and professional tasks that leave me to focus on researching, interviewing and writing.



> Going Online

When working with someone remotely — or even an assistant in your office — it makes sense to put non-sensitive information online. Google Calendar, for example, is a useful tool that can provide you with access to your schedule from any wired computer.

Online schedulers are one simple example of a broader category of applications that are hosted online. This category of applications — known as “software as a service” (SaaS) — carry significant benefits for small-business users, especially independent financial advisors who may be working in small offices with little technological support.

“Twenty-one per cent of small businesses plan to purchase a SaaS solution in 2010, compared with single-digit responses from the medium and large segments,” says IDC’s Edwards. “Small businesses, while beginning to see the value in addressing business issues with technology, are also exploring the possibility of achieving it without being overburdened by capital costs.”

Another area in which SaaS applications can help is client relationship management. Many financial advisors may be using little more than a contact database or an Excel spreadsheet to keep track of the potential and existing clients they have contacted recently. You may wish to consider something more structured. Many CRM systems are available for desktop computers. For example, Microsoft offers Dynamics, which helps sales people close a deal. Marketcircle Inc. offers a CRM product called Daylite, for the Mac operating system.

The alternative is an online system such as Salesforce. The group edition of this online service enables small businesses to track incoming sales opportunities, including prospects who have found the business’s website via Google’s AdWords advertising service, for a small monthly fee. If you adopt this route, you could track the conversion progress from initial contact through to final closure.

Depending on where you’re starting from, you might find it daunting to implement all these technologies at once. If you’re in the technological backwoods, you would be well advised to take baby steps into the world of gadgets, online services and electronic productivity tools. But the journey will be worth it. And the time to start is now. IE