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How to Create the Perfect Fintech Stack for Your RIA

When advisory firms incorporate the right tools into their practice, they have the power to improve processes, increase efficiency, generate qualified leads, and elevate the client experience.

But as the options to add to your fintech stack grow (just look at the latest version of the Kitces’ Financial AdvisorTech Directory), it may become more difficult to discern between the tools that are boosting your bottom line and those that just take up space as a line item in your budget. 

RIAs spend on average 2% of their firm’s revenue each year on technology. Depending on the size of your firm, that equates to a significant chunk of change. You need to know you’re building your tech stack correctly so it streamlines processes and grows your firm.

If you’ve been slow to incorporate new software, platforms, and apps into your business, you may be wondering if reevaluating your fintech stack is really necessary. Better yet, can the right tech tools actually help to accelerate your firm’s growth goals?

Today’s article will answer that question and more. Keep reading to take a deep dive into what a tech stack is and how to improve your firm’s efficiency with the right solutions in yours.

What Is a Tech Stack?

A tech stack refers to the combination of tools and technologies your firm uses to conduct day-to-day operations. It consists of a combination of back-office programs and client-facing platforms that work together to help your team run smoothly and stay organized. 

The pieces of your tech stack will have different purposes, such as automating repetitive tasks, customizing communications with clients, monitoring data, etc.

Most advisory firms have a fintech technology stack that includes:

  • Customer relationship management (CRM)
  • Financial planning technology
  • Portfolio management
  • Risk analysis
  • Other solutions like billing, data analytics, rebalancing, etc.

Customer Relationship Management (CRM)

A CRM is commonly considered to be the central hub of any digital-first financial firm. It’s a tool advisors use to keep all client information and data organized in one central location. 

There are many different CRMs on the market, but most allow advisors to track prospective clients as they travel through the sales funnel, filter client lists, record notes, and track client meetings.

If your firm takes some time to really optimize its CRM and implement automatic workflows, it’s possible to transform it from a glorified address book to a lead and client nurturing machine. A well-implemented CRM helps teams work together more efficiently and streamline communication with clients.

Financial Planning

By implementing the right financial planning software, advisors can spend less time on quantitative tasks and more time working one-on-one with their clients. Again, there are plenty of options when it comes to adding financial planning software to your fintech stack. 

From identifying appropriate tax strategies to running a cash flow analysis, financial planning software can cover a wide variety of otherwise time-consuming tasks. These programs allow advisors to implement repeatable processes into their workflow, while still personalizing crucial data points to ensure each client receives tailored financial planning solutions. 

Portfolio Management

When advisors incorporate portfolio management tools into their tech stack, they’re able to leverage powerful resources and formulas that far exceed what’s been traditionally available to small- and medium-sized RIA firms. 

Portfolio management software can be used in a variety of ways including rebalancing portfolios, reviewing investment analytics of individual client holdings, running long-term scenarios, and overall managing client portfolios.

Other Solutions

While CRM, financial planning and portfolio management software are by far the most common tools included in a firm’s tech stack, the options don’t end there.

There are plenty of ways to integrate automation and digital-first solutions into your firm. Other possible fintech stack additions include:

  • Billing platforms: Automatically calculate invoices, send bill pay reminders and collect payments.
  • Document management: Send and sign confidential documents safely, while eliminating the need to print, mail, or fax.
  • Data analytics: Get a high-level overview of important data points, or zero in on client-specific information to make data-driven decisions.
  • Communication tools: Your team may use instant messaging platforms to communicate on the fly, video conferencing for client calls, or maybe even AI-driven voice transcribers for note-taking.

What Should a Good Tech Stack Do For You?

As you sift through your current stack and the options available on the market today, you’ll need to determine what makes something a good addition to your fintech stack.

To start, a good tech stack allows you to accomplish critical tasks, many of which we’ve identified above. They include client data, secure storage, financial planning and trade securities.

You should be able to implement repeatable processes across your firm. Doing so improves efficiency and helps ensure a standardized, yet personal, experience for all clients. Repeatable processes help eliminate or reduce the opportunity for human error and make tasks easily transferable to new team members.

Not to mention, tech-driven workflows can help improve data security, provide crucial back-ups for sensitive information and save time across the board.

Even with all of these advantages, which every RIA should be utilizing, most tech stacks are still missing one important component.

What Are Most Advisor Tech Stacks Missing?

The missing piece of most tech stacks? It’s growth!

Tech stacks are meant to fill the needs of a firm, while helping advisors deliver a great client experience. But, advisory teams need to keep their eye on ROI as well. While you may have people who stick around for many, many years, your firm’s long-term success depends on its ability to continually attract new clients.

The next generation of wealth builders is out there, and now’s the time when they’re looking for a financial partner to manage an inheritance, navigate their compensation package and save for the future. But as consumers grow more reliant on technology, they expect their advisory firm to offer a digital-first experience as well. They want to know they can access resources or accounts on their smartphone, connect with you virtually and still feel like they’re receiving personalized service.

If you aren’t dedicated a portion of your tech stack to growth, you’re missing an immense opportunity to attract and retain highly qualified clients.

In other words, it’s one thing to be promised time and efficiency by your tech integrations. But it’s another thing altogether to choose the right technology that’ll actually help grow your AUM and revenue.

To achieve scalability, firms need something that gets the growth flywheel spinning. Something that turns a website into a lead-generation machine. Something that converts those prospects into ACAT form moments. And something that transforms those assets into committed clients.

In other words, RIAs need a growth platform behind it all. One that will be the true difference maker in your tech stack going forward, more so than any other fintech choice you’ll make.

What Is a Growth Platform?

A growth platform creates firmwide alignment to drive a consistent client experience across your advisors and compliance analytics for every account. In doing so, your advisors can improve their close rate (even as high as 90%) and see more money in their paycheck, month after month.

With the right growth platform in your pocket, you can more effectively win new clients, retain the people you already enjoy working with, and do right by all of them. Show them upfront how you can get them into the right portfolios, specifically by demonstrating how you’ll best align their true risk with what they want from their investing goals.

They say a picture’s worth a thousand words, and a growth platform is an effective tool for helping clients visualize and understand the information you’ve already been giving them. Having a better understanding, and a visual they can refer back to time and time again, makes clients feel more confident in their decision to work with a professional advisor.

A growth platform should help you accomplish client-focused tasks like:

  • Discovering the right assets to help you implement the financial plan you’ve created for them.
  • Proposing the perfect portfolio to get them moved over to your firm.
  • Automating rebalancing and client engagement over time to keep them invested appropriately.
  • Ensuring they’re truly invested in you and the advice you’re offering.

Build Your FinTech Stack with Nitrogen

The great news is, you’re likely well on your way to having a full fintech technology stack. But while most digitally savvy financial firms have a CRM, financial planning and portfolio management tools, they tend to miss the most important component of all: a true growth platform at the center. 

Nitrogen is a top-to-bottom growth platform designed to build efficiencies, improve your close rate and completely transform your client experience. 

Learn how thousands of wealth management firms win prospects faster, personalize the client experience, leverage sophisticated analytics, and make compliance profitable with the Nitrogen growth platform today.

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