Buying in: How much should you invest in technology?


Buying in: How much should you invest in technology?

With all the technology options available today, how much should you invest in technology for your practice?

With all the technology options available to advisors today, it can be difficult to determine just how much to invest in technology for your practice. And not just in terms of money, but in personnel and time, too, especially when technology is continuously improving. Nothing is quite as frustrating as putting significant resources toward a technology purchase or upgrade, only to find out a little later that something better, faster and cheaper is available.

Bryan Sweet of Sweet Financial Services in Fairmont, Minnesota understands that it can be a complex decision. “I’ll quite often ask myself, ‘What should I use? How do I use it?’ Before you know it, you can find yourself spending a great deal of time and resources trying to keep up with all of the technology available to you.”

So how do you determine your level of investment in technology?

Dollars and sense

Every advisor and advisor practice is unique, and so are their technology needs. After assessing their technology needs and wants, some advisors budget a percentage of their revenue toward technology, while others prefer to affix a set dollar amount based on their needs and available hardware and software. Regardless, you should determine how much you can spend on technology upgrades based on your practice’s cash flows. And be sure to consider the savings you will incur over time in terms of man hours, paper and office supplies, and information storage.

You may also want to consider leveraging the technology and tools provided by your broker/dealer.

“Firms recognize the value of technology to attract talented advisors and retain the ones they have, so they try to stay on top of trends,” says Lawrence, Kansas-based advisor Phillip Rademacher. “Whether you use all their available technology, or just incorporate what you need, you can save a lot of money.”

Hire a techie

Naturally, to get the most out of your monetary investment in technology, you must get the greatest benefit out of the power of the technology. Hiring a tech specialist (or even assigning an intern) dedicated to maintaining and backing up your systems and software may save you a lot of headache and expense later. More important, an on-staff tech specialist can keep a close eye on new developments and products that can make your technology investment even more worthwhile.

Time and time again

Technology advances at a breakneck pace, and it can be difficult at best to stay on top of the newest products and systems, even if technology is your thing. That’s why it is important for advisors to invest a certain amount of time in learning what’s new in technology and how it can be customized to work for your business. And again, lean on the tech experts at your broker/dealer, who often have insights on and access to industry technology you may not be aware of.

“Don’t be afraid to invest,” says Eliot Weissberg, branch manager of The Investors Center, Inc. in Avon, Connecticut. “Younger clients are already jumping on the tech wagon and your competition is likely doing the same.”

With a clear strategy for investing in technology, you can ensure you, your team and your clients are technologically advanced financial planners. 

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