Fighting the Fear of Change
Adopting the latest fintech costs money and takes time, but the benefit far outweighs the initial cost.
The latest fintech may be expensive, but the benefit outweighs the cost.
LAST MARCH, I RECEIVED A CALL FROM MY SISTER. “Your building is burning down,” she said. “Turn on the news.” I watched in horror as a massive fire destroyed two tall apartment buildings in downtown Raleigh, North Carolina, just one block from my firm’s office. Despite the shocking footage, I told her: “If the building burns down, we’ll lose some computers and desks — it’s fine. We can operate business as usual tomorrow.”
Over the last several years, our advisory firm has made an effort to become a completely cloud-based fintech office. In the event of any emergency, any employee can work remotely from a phone, laptop or tablet. As we’ve seen with some of the natural disasters that have ravaged our country in recent months, implementation of technology that allows for business continuity is crucial — and fully possible.
With the evolution of fintech, firms and advisors can easily implement CRM and trading systems, financial planning and risk management software, and data storage applications. Yet some advisors think they don’t need new technology. Others hesitate because of cost pains, lack of knowledge and a concern about being able to integrate new tools into their practice. All of these excuses are indicative of one thing — a fear of change.
In fact, in a 2016 PWC survey, less than half of respondents said they put fintech at the heart of their business strategy — a shockingly low percentage given the advanced technology available today. It’s also a lost opportunity.
Last year, our firm changed broker-dealers because we needed more streamlined technology. Following the integration process, we realized we didn’t have to replace a staff member, who had previously left the firm.
The new technology also saved time as we cut down on hours spent preparing for client meetings. Moreover, cloudbased technology eliminated the need for clunky equipment and reduced commercial real estate expenses. Of course, technology costs money and implementation takes time, but the benefit far outweighs the initial cost.
NAVIGATING UNCHARTERED WATERS
For advisors worried about making the transition to a new suite of technology, consulting firms, BDS and industry conferences are all available as resources to help navigate unchartered waters. Utilize their network and consider working with consulting firms to gain a comprehensive understanding of the best technology integrations available.
Attending industry conferences helps. Most of these national or regional conferences have sponsor booths where fintech companies will provide demonstrations. Hands-on interactions help examine available options to create the most effective technology stack for your firm’s needs.
Our firm has already implemented such solutions as Riskalyze for risk management software, emoney Advisor for financial planning and client aggregation, and Dropbox Business for cloud file storage.
Keep in mind that practices may soon need to be cloudbased. In fact, FINRA Rule 4370 requires firms to create and maintain written business continuity plans relating to a significant business disruption. In 2016, the SEC issued a proposal to amend Rule 204-2 to require RIAS to make and keep all business continuity and transition plans currently in effect.
The implementation of cloud-based technology, particularly as it relates to data storage, helps to satisfy the data backup and recovery element of these rules.