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Time Is Money: Arm Your Advisors with an Integrated Solution

Got time?

If you’re a financial advisor for high-net-worth clients, probably not enough of it.

According to studies done by VIP Forum and Curian Capital, the last two years have seen a record 31% decline in time advisors spend with prospects and clients, from 72% to 50% of their time. Fully 50% of advisors’ time is spent on non-revenue-producing administrative tasks, sapping their energy and productivity. Firms and advisors cannot effectively scale operating the way they do now.

Why is the advisor's administration burden increasing?

Administrative time is soaring because traditional software cannot adapt to the dynamic changes occurring in the wealth management business today. As the business model shifted from transaction-based services to more holistic, fee-based advice services, advisors have been provided disparate, unintegrated applications and tools. In fact, advisors now need to toggle among 7 to 20 applications to do their daily job, according to Logan Allin, Program Manager of the Wealth Management Group at BusinessEdge Solutions (www.businessedge.com).

To acquire new clients using a basic workflow, for example, advisors today may have to access more than seven tools to complete the following:  

• Identify a prospect
  
  
• Understand the prospect's profile
  
  
• Evaluate the prospect's entire wealth picture
  
  
• Generate a suitable asset allocation
  
  
• Create an investment proposal to submit to the prospect
  
  
• Open a client account
  
  
• Record household and third-party information for future reporting
  
  
• Create the actual portfolio based on constraints and preferences

The burden’s impact

As client and prospect time decreases and administrative time increases, advisors find it increasingly difficult to grow their book of business and keep their existing clients satisfied with a high quality level of service and attention.

Not surprisingly, 83% of respondents in a recent survey by Curian Capital spanning 880 financial advisors cited practice management as the #1 issue they need addressed to grow their business. 81% cited the need for improved efficiency, and 60% said they didn't have a service model that would enable them to expand their practices. Clearly, these administrative issues are requiring firms to rethink their service models, and to look for new ways to improve efficiency and generate more revenue and share of wallet per client. However, given the increasing price of talent, many firms quickly determine that hiring more people, whether advisors or support staff, is not the answer to profitably expanding the service model.

Bridge the gap between your CRM and your wealth management solution

To solve this advisory productivity problem, NorthStar provides an integrated client wealth management solution. The integrated solution – available now with NorthStar 5.0- seamlessly passes client information, client service events, entitlements, and security policies already set up in the firm’s CRM system to NorthStar.  Once the CRM system is linked to NorthStar 5.0, advisors no longer need to be trained on disparate applications nor re-key client data.  They can focus on proactively converting and managing prospects and leads from NorthStar’s signature 360-degree client dashboard.

By using NorthStar 5.0’s entitlement-driven CRM integration, firms can decrease administration time by up to one-third and enable advisors to focus on revenue-generating activities such as identifying new prospects, acquiring new clients, and retaining clients.

As a result, firms can increase total assets under management (AUM), AUM per advisor, and operating margin. In one case, a national bank projected a $1 million/day increase in incremental revenue beginning six months after advisors adopt the integrated client wealth management solution.

Firms also can save the time, hassle and expense of trying to customize other applications and systems in ways they were not designed to extend. The seamless integration of CRM and NorthStar provides a quick and cost effective route to an integrated advisory workflow and desktop.

Why now?

There are several reasons why the Client Wealth Management solution is needed right now:

• The shift from the brokerage model to the advisory model requires more holistic advice and therefore integrated software solutions that show 360-degree views and management of client wealth. Disparate views of the client’s wealth puts the advisor in the position of having to construct the puzzle.
  
  
• 90% of firms expect to do more acquisitions in the coming year (PricewaterhouseCoopers 2007 Global Private Banking/Wealth Management Survey), and achieving the highest ROI from these mergers requires integrated systems and processes.
  
  
• 11% increase in affluent households will be added annually (2006 Capgemini Merrill Lynch World Wealth Report), and firms must have effective client acquisition strategies to tap into this expansion.
  
  
• 31% increase in administrative time has resulted in 31% less time with new and existing clients (Curian Capital & VIP Forum). To reverse this trend requires automated, integrated, and streamlined processes and software.
  
  
• On average, advisors have share-of-wallet penetration of 30% of a client's assets. and most high-net-worth clients average five advisors (client data). To capture more share of wallet across more clients requires an automated yet personalized approach.

The cost of waiting

The PricewaterhouseCoopers 2007 Global Private Banking/Wealth Management report predicts 30% annual growth in AUM. Firms can only achieve this growth if they arm their advisors with an integrated client wealth management solution that brings existing client information, housed in a firm’s existing CRM system, into the NorthStar wealth workflow process.

If firms do not embrace this new solution, advisors' increasing administration burden will undermine their ability to generate revenue, and firms will not achieve their targeted growth.

Now IS the time to reclaim your time.

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