Profitable Practices: Giving Your Firm an Edge With Technology
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Why invest in technology? •When aligning technology investments and operation with firm goals, profitability is not a goal. It is an outcome. Productivity gains Expected benefit to client Expected benefit to staff Increased profitability More time available to focus on business development activities Expected cost 0.0% 20.0% 40.0% 60.0% 50.0% 16.3% 10.0% 10.0% 6.3% 5.0% 40.5% 24.5% 8.4% 11.4% 5.5% 7.6% Top considerations when deciding whether to invest in new technology Top Performers All Others Source: InvestmentNews 2013 Adviser Technology Study
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At InvestmentNews Research we set out to understand how financial advisers believe their current commitments to technology will help them achieve specific firm goals. What we discovered was that the most basic to approach to investment in technology was to enhance productivity, with expected benefits to clients coming in a distant second. Falling third, between expected benefit to clients and expected benefit to staff, was increased profitability. When aligning technology investments and operation with firm goals, profitability is not a goal. It is an outcome. This approach was accentuated among the top-performing firms.
Transcript of Profitable Practices: Giving Your Firm an Edge With Technology
Why invest in technology?• When aligning technology investments and operation with firm goals,
profitability is not a goal. It is an outcome.
0.0%10.0%20.0%30.0%40.0%50.0%60.0% 50.0%
16.3% 10.0% 10.0% 6.3% 5.0%
40.5%24.5%
8.4% 11.4% 5.5% 7.6%
Top considerations when deciding whether to invest in new technology
Top Performers All Others
Source: InvestmentNews 2013 Adviser Technology Study
Steady rise of technology spendingTop performers aren’t outspending their peers on technology
… but they are spending more on consulting and outsourcing
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$1 $1
$0 $0
$0 $0
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Total technology expenses
SoftwareHardwareTechnology-related consulting or outsourcingAll other technology expenses
All Otherstotal tech spend as a percent of expenses
Year-over-year change in tech spend
7.8%
+9.8%8.3%
+11.8%
Tech spend breakdown
Top Performers All Others
The road map to achieving scale
Efficiency, productivity, profitabilityTop performers achieve scale
Accuracy of our processes
Client satisfaction
Cost/expense
Employee satisfaction
Profitability
Productivity measures
Efficiency of our processes
5.5%
9.7%
7.2%
4.6%
3.8%
26.6%
35.0%
2.5%
2.5%
2.5%
3.8%
7.5%
28.7%
43.8%
How do you evaluate technology within your business?
Top Performers All Others
Revenue per staff Revenue per professional
$207,984
$435,303
$78,750
$155,000
Productivity metrics
Top Performers All Others
