Implementing Technology

Sue BerginSue Bergin, President, S Bergin Communications

You don’t necessarily need the most cutting-edge technology to get to the top of your game. According to a recent study, you can start by leveraging the technology you already have.

Fidelity Institutional Wealth Services’ 2013 RIA Benchmarking Study reveals that high-performing firms—those in the top quartile for growth, profitability and productivity—focused on smart technology and adoption, not getting the latest and greatest. These high-performing firms focus on optimizing their technology in three areas: portfolio management, service, and client reporting.

Here are ten steps you can take to make sure you get the most from your technology.

  1. Make adoption a priority. Commit putting in the time and effort to learn how best to maximize all of the system’s features. If you can’t do it yourself, make someone else in your office accountable.
  2. Plan. Learning a new software program is like learning a new language. It’s hard to know where to start. Your technology provider should be able to give you an implementation guide to show you the steps to follow, and milestones to hit.
  3. Set aside time. If you don’t carve out time on your schedule, it isn’t going to happen.
  4. Network. There are relatively few programs out there that haven’t already been tried and tested by others in similar positions as yours. Talk to everyone you know who has gone through the implementation process and find out what they did and what they wished they had done better.
  5. Gather resources. Request an inventory of the training your technology provider makes available. Once you know what they have for support materials, you can choose the format that best matches your learning style.
  6. Optimize Your TechnologyGet names and numbers. You need to have key information handy in a few different areas. Know the software name, version number, and license holder so that when you call or go online for help you can be sure you are asking about the right program. Also know the names and numbers of customer support persons at your technology provider.
  7. Troll the internet. Use social media find online user groups or other social media sites that could provide helpful implementation hints. For example, there may be a LinkedIn User Group already established for the purposes of optimizing your software.
  8. Monitor progress. Perform periodic self-checks to monitor your progress towards the goals set in your implementation plan.
  9. Celebrate incremental success. Even if you haven’t learned everything there is to know, make note of how the technology improves your efficiency. Success is a powerful motivator and will prompt you to plow through your learning curve.
  10. Provide feedback. Software engineers constantly strive to innovate. If there is something you don’t like about your program or would like to see handled differently, let them know. You may just have a function named after you in the next version!

The views expressed are those of Brinker Capital and are for informational purposes only.

Tech Talk: Adding Value Through Technology

Brendan McConnellBrendan McConnell, Vice President, Business Administration

I recently participated on an advisor technology panel at the 2014 FSI OneVoice event in Washington, D.C. One of the topics of conversation highlighted the number of new technologies available and what technology an advisor should consider adopting. It starts with creating a solid technology foundation.

Financial services, not unlike most other industries, is a competitive landscape where it can be difficult to separate yourself from the pack, so to speak. There are a lot of skilled institutions and personnel promoting similar products and services. Embracing the right technology is one way to differentiate yourself. Adding technology to your practice can be disruptive, but a firm with the right appetite for change finds success in transforming the customer experience. Let’s look at a few tools and concepts you should start considering adding to your business.

Adopt a Customer Relationship Management (CRM) System
CRM systems are designed to help you manage your business more strategically and efficiently. They serve as the ecosystem where all relevant business data exists—from client contact information and account data, to prospect opportunities and service requests. Your CRM is the hub around which all other technology revolves. Most CRMs are now offered as cloud-based technology, giving you access anywhere on any mobile device and eliminating the need to support the technology infrastructure. The cloud delivery also makes CRM much more affordable. Use CRM systems to automate workflows and eliminate those time-consuming, manual procedures. Set up alerts so that you know when a new proposal is run or an account hits a specific threshold. Have emails proactively sent to your clients when a service case is completed or for an anniversary or birthday. Time is your most valued resource, add more of it through a properly implemented CRM system.

Adopt a CRM SystemIf you are currently using a CRM, your future technology choices should include an evaluation of integration with your system. Think of your CRM like a power strip that all other technology plugs into. This will provide you with a simplified infrastructure with one source and a single log in. If you are shopping for a CRM, take a look at your current core system, software, and platforms and find the CRM that will integrate best with your existing technology. If you follow this strategy it will eliminate the siloed technology approach, which often leads to inefficiencies.

Improve the Client Onboarding Process
As important as embracing technology is to your internal processes and procedures, it’s vital for enhancing the client experience. This is where you prove to the client that you add more value than simply serving their investment needs. A recent Fidelity RIA Benchmarking survey found that 77% of high-performing firms were focused on using technology to enhance the customer experience and satisfaction.

Client onboarding, for example, is an area worth the technological investment. Tools that allow for pre-population of forms, applications that allow secure, electronic signatures, using CRM data to customize templates—all of these enhancements create a unique and personal experience for the client. And we all know the adage “a happy customer is a loyal customer.” In addition, a paperless workflow technology can provide a tremendous amount of efficiency and process standardization that can help reduce resources required (time and money) and help eliminate mistakes.

Customization is KeyProvide Customizable Client Reports
What about the ongoing servicing of existing clients? Client reporting, much like the onboarding process, helps enhance and maintain successful relationships. Each one of your clients has an investing objective that is personal to them. You need to be able to provide them with a custom report that shows how they are measuring against their goals rather than trying to fit them into a predefined template. The one-size-fits-all model is no longer going to meet your clients’ expectations for the evolving world of goals-based investing.

The driver behind successful adoption of technology for any practice is internal participation. You must have buy-in within your organization or practice. Whether a one-man show or a team of 20, everyone has to commit in order to maintain a culture of innovation. With proper adoption of technology, enhanced client experience and satisfaction will be within reach.

Ten Reasons Why You Should Not Rely on Year-End Statements for Tax Reporting Purposes

Sue BerginSue Bergin

Many investors are confused by discrepancies between year-end figures and those that appear on 1099 tax reporting documents from fund companies. Typically, these discoveries come to light around midnight when it is most difficult to get someone on the phone that can explain the discrepancies.

If you come upon a discrepancy, resist the temptation to jump to the conclusion that there is a problem. Instead, know that discrepancies sometimes happen, which is why experts advise against using year-end reports for tax reporting purposes.

10 Reasons Year-End Statements Should Not Be Used for Tax Reporting

  1. Fund companies explicitly caution against using the figures provided in year-end reports for tax reporting purposes. There is a reason that it has become industry standard to include such disclaimers. The industry is trying to prevent tax preparers from a commonly made mistake.
  2. The gross proceeds amount on the 1099 will rarely match the proceeds amounts show on a year-end statement’s realized gain/loss statement.
  3. Reclassifications often occur after year-end.
  4. RICs or spillover payments aren’t made until January of the next year, but have to be reported for the prior year. These occur with mutual funds, Real Estate Investment Trusts and Unit Investment Trusts that post distributions with record dates in October, November and/or December of the prior year, but make payment in January of the next year.
  5. Payments described as dividends on monthly statements, but paid on shares selected in the substitute payment lottery process are reported as miscellaneous income on Form 1099-MISC.
  6. Income payments on certain preferred securities must be reported as interest, even though they are often shown as payments and dividends on the monthly statement.
  7. Original issue discount (OID) accruals may be identified and processed after year-end.
  8. Reporting on short-term discount securities (like Treasury Bills).
  9. Shares received as part of an optional stock dividend offering are valued and reported as income on the 1099-DIV.
  10. Corporate reorganizations, recapitalization, mergers and spin-offs creating stock or cash distributions are considered taxable events reportable on Form 1099-B.

Your year-end statements provide valuable information, however for tax reporting purposes, your best bet is to use the information contained on your 1099s.

This information represents our understanding of federal income tax laws and regulations, but does not constitute legal or tax advice. Please consult your tax advisor, attorney or financial professional for personalized assistance.

Ten Reasons Why You Should Not Rely on Year-End Statements for Tax Reporting Purposes

Sue BerginSue Bergin

Many investors are confused by discrepancies between year-end figures and those that appear on 1099 tax reporting documents from fund companies. Typically, these discoveries come to light around midnight when it is most difficult to get someone on the phone that can explain the discrepancies.

If you come upon a discrepancy, resist the temptation to jump to the conclusion that there is a problem. Instead, know that discrepancies sometimes happen, which is why experts advise against using year-end reports for tax reporting purposes.

10 Reasons Year-End Statements Should Not Be Used for Tax Reporting

  1. Fund companies explicitly caution against using the figures provided in year-end reports for tax reporting purposes. There is a reason that it has become industry standard to include such disclaimers. The industry is trying to prevent tax preparers from a commonly made mistake.
  2. The gross proceeds amount on the 1099 will rarely match the proceeds amounts show on a year-end statement’s realized gain/loss statement.
  3. Reclassifications often occur after year-end.
  4. RICs or spillover payments aren’t made until January of the next year, but have to be reported for the prior year. These occur with mutual funds, Real Estate Investment Trusts and Unit Investment Trusts that post distributions with record dates in October, November and/or December of the prior year, but make payment in January of the next year.
  5. Payments described as dividends on monthly statements, but paid on shares selected in the substitute payment lottery process are reported as miscellaneous income on Form 1099-MISC.
  6. Income payments on certain preferred securities must be reported as interest, even though they are often shown as payments and dividends on the monthly statement.
  7. Original issue discount (OID) accruals may be identified and processed after year-end.
  8. Reporting on short-term discount securities (like Treasury Bills).
  9. Shares received as part of an optional stock dividend offering are valued and reported as income on the 1099-DIV.
  10. Corporate reorganizations, recapitalization, mergers and spin-offs creating stock or cash distributions are considered taxable events reportable on Form 1099-B.

Your year-end statements provide valuable information, however for tax reporting purposes, your best bet is to use the information contained on your 1099s.

This information represents our understanding of federal income tax laws and regulations, but does not constitute legal or tax advice. Please consult your tax advisor, attorney or financial professional for personalized assistance.