Having the right technology can be critical to a registered investment advisor’s success. However, knowing what to include in an RIA tech stack may take some thought and planning to ensure you have the right tools to meet your needs. This guide offers some helpful suggestions on what to include, along with tips for building out a tech stack from scratch.
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What Is an RIA Tech Stack?
Why do RIAs need a tech stack? There are a few reasons why having the right technology matters when it comes to scaling your business and ensuring that day-to-day operations are running smoothly. Here are some of the key benefits associated with building out a tech stack.
- Investing in tech tools can help you streamline operations, potentially saving you both time and money.
- Technology can help you to provide clients with a better customer experience, which can help to encourage loyalty and increase retention rates. Improving client satisfaction could also help you to generate new leads in the form of referrals.
- Incorporating tech into your advisory business can help you to better meet compliance guidelines and protect client information.
Exploring the possibilities that technology has to offer could also make it easier to compete alongside other RIA firms that are innovation-positive. Failure to adapt to changing technologies, meanwhile, could mean getting left behind.
What to Include in an RIA Tech Stack
What your tech stack looks like can depend largely on the needs of your firm. Identifying your business’s pain points can help you narrow down which solutions might be appropriate. Generally speaking, an RIA tech stack may include any of the following tools.
Customer Relationship Management (CRM) Tools
Customer relationship management software can make your life as an RIA easier by allowing you to simplify the collection and organization of client data.
A good CRM program should allow you to set up automated workflows for tasks like onboarding and off-boarding, email marketing and lead generation. The ability to share is another good feature to have if you’d like to be able to make client information accessible to other members of your firm.
Financial Planning Software
As an advisor, you spend a significant amount of time offering financial advice to your clients. Financial planning software programs can help you to do that more efficiently while providing the tools that you need to create customized plans. Some of the features that you might look for when choosing a financial planning software include:
- Client-led planning tools
- Integrations with other RIA tech tools
- Interactive simulators and calculator tools
- Detailed analytics reporting
- Customizable planning templates
- Access to a secure client planning portal or dashboard
- Superior customer service and support
It’s also helpful to choose a software program that allows you to create charts or graphs so that you have a visual representation to share with clients when tracking net worth and financial goals.
Portfolio Management Software
Portfolio management software acts as a complement to financial planning tools in an RIA tech stack. In terms of what kind of capabilities you should be looking for here, that can include things like rebalancing, trading, tax management, and legacy or estate planning. You may also be interested in software that incorporates tools for risk management, data aggregation, and/or lead generation.
If you’d like to separate some of those functions and you have the budget to do so, you might consider separate tools for trading and rebalancing, or a different software program that handles risk analysis. Of course, a more centralized approach could mean less jumping back and forth between tools or programs to manage client portfolios.
Virtual Conferencing Tools
RIAs are increasingly taking client meetings and team meetings online. While in-person meetings aren’t likely to disappear any time soon, having the option to meet via video chat is worth considering. Virtual conferencing can save you and your clients time, and it can also be a more convenient option if you have clients who are busy and can’t make it to your office on a regular basis.
Compliance and Cybersecurity Software
Compliance is something RIAs must take seriously, as failing to meet regulatory guidelines could leave your firm open to penalties. Likewise, protecting client information is equally important, particularly given the uptick in cyberattacks and fraud.
RIA compliance software programs can help you to identify areas where your firm may be lacking and address potential security concerns. Capabilities can extend to:
- RIA registration with the SEC or state regulatory agencies
- Employee compliance
- Archiving and information management
- Audit preparation
Having this type of software is no substitute for hiring a compliance officer, which is something that’s required under SEC registration rules. Investing in compliance and cybersecurity software can help to ensure that nothing falls through the cracks due to oversight.
Other Tech Tools
In addition to the tools mentioned so far, there are some other additions you might want to make to your RIA tech stack. They can include:
- File management and sharing software programs
- Task management tools
- Instant messaging tools
- Word processing programs
- Payroll and accounting software
- Scheduling software
- Calendar tools
- Email marketing software
Doing a technology audit can help you identify what systems you already have in place for simplifying tasks and what’s working (or not). If you don’t have a chief technology officer, you might consider hiring one or at the very least, seeking a consultant with an RIA tech professional who can offer insight into which tools might be most useful and necessary to have.
Building an RIA tech stack can take time but it’s worth the effort if you’re ready to embrace the possibilities that tech has to offer. With the right technology in hand, you can operate your firm more efficiently and better serve your client’s needs, both of which can help you to scale and grow over the long term.
Tips for Growing Your Advisory Business
- Lead generation can be one of the most time-consuming tasks on your advisor’s to-do list, but it’s also one of the easiest to automate. An online lead generation tool like SmartAdvisor, for example, can take the guesswork out of finding prospects. Instead of spending valuable time cold-calling or emailing, you can let SmartAdvisor bring leads to you.
- Scheduling tools and AI tools can help to streamline your marketing efforts online. For instance, you might use ChatGPT or similar AI technology to generate social media content or email newsletters. And scheduling tools can make it easier to feed your social media followers a steady diet of content, without having to be perpetually online.
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