The 15 Essential Pieces of an RIA’s Tech Stack, and How to Pick the Right Solution for Each

An RIA’s tech stack can be broken down into five categories, each with three subcategories:

1. The Big 3
2. Investment Tools
3. Portfolio Management
4. Communications
5. Firm Operations

Today, we want to go through all five categories to look at how to decide what makes sense for you. This is not a roundup of all of the solutions out there—Michael Kitces’ Fintech Map does a great job of covering the ever-expanding universe of advisor technology.

Click here to download our Tech ScoreCard to see if you have all your bases covered.

Of course, we have recommendations and preferences in all of these areas, but just as this is not a roundup of solutions, this article is also not intended as an endorsement of our preferred tools. This should be viewed as more of an overview of the tech decisions facing you as you build your RIA to help you make sure you have every area covered. 

The Big 3 Decisions

Custodial & Banking Partnerships

There are several options here, some of which claim to be “free,” and some of which take a more straightforward approach to their costs. RIAs have a decent number of options when it comes to selecting a custodian, and there is a real difference between them. 

Questions every RIA should consider when choosing a custodian:

• • How big is your firm right now and how big do you want to get? If you are already big or are planning on quick growth, consider a custodian like Pershing, which caters to larger RIAs. 

• What kind of services do you plan to offer? If you will be a planning-centric firm, you may want to consider a custodian like Fidelity, whose Wealthscape platform is considered to be one of the best for holistic advisory practices. 

• How specialized do you need your custodian to be? If you’re not worried about specialization in your firm or in your custodian, then you may be comfortable with Schwab—by far the largest RIA custodian, especially after they purchased TD Ameritrade. But if you need a more flexible experience, consider a smaller firm like Altruist.

Account Aggregation & Performance Reporting

Data aggregation and reporting tools are no longer an option, even for the smallest RIAs. They tend to be one of the most popular features with clients, and if you don’t offer something like that, chances are they’ll download a free tool to do it—and that tool is likely a prospecting tool for another firm or a robo advisor. 

Questions every RIA should consider when choosing an aggregation tool:

• Is the client portal user friendly? Clients love using aggregation tools, so if yours is cumbersome and poorly designed, it could be a major point of frustration for the families you serve.

• What kind of reports does it offer? The best aggregation and reporting tools don’t just compile data, they add context by breaking down spending and saving into useful reports.

• How many institutions does it connect with? If your aggregation tool doesn’t work with the main banks your clients use, then it becomes worthless. 

CRM & Workflow

The days of the client spreadsheet are no more. CRMs have streamlined client relationships by connecting information and automating messages. There are several industry-specific options like Redtail and Wealthbox, as well as non-specific ones like Salesforce, the godfather of CRMs, and Hubspot.

Questions every RIA should consider when choosing a CRM:

• Which features do you actually need? With so many CRMs on the market these days, a differentiating factor has become how many features they have. As a result, the list of bells and whistles seems endless. We recommend focusing on what you need, not what you could get. You can always switch down the line, and your best bet right now is to conserve resources by going basic here.

• How simple do you need it to be? Salesforce is the most popular CRM in the world, largely because of its customizability. But customizing Salesforce isn’t easy, and most firms end up hiring a Salesforce developer to build what they need. That doesn’t have to be a dealbreaker, but it’s important to be aware of the potential additional cost. 

• How much do you want to spend? Speaking of cost, there are plenty of free CRMs out there. The catch is that they mostly expect you to integrate with their other systems. CRM costs run the gamut, so chances are you can find something that does what you want in a good price range.

 

Investment Tools

Risk Analysis

Risk analysis tools have grown in popularity over the last decade to the point where some surveys say as many as 74% of advisors use them in their practice.

Questions every RIA should consider when choosing risk analysis software:

• Does any of my other software already provide me with a risk assessment tool? One of the biggest oversights we see with RIAs is underutilization of existing tools, and risk analysis is one of the biggest offenders. One of the most obvious is Riskalyze. If you already use it for trading, then you can double up and implement their risk tool as well. 
• How well does it integrate with the rest of your tech stack? If you need to go elsewhere for a risk assessment tool, make sure it integrates where you want it to, especially with your portfolio management tool. 

Research Platform & Operations Due Diligence

Due diligence is an essential piece of any RIA’s duties, and choosing the right tool to assess cybersecurity is no different. Compliance consulting firms typically offer solutions to help in this area. 

Questions every RIA should consider when choosing a research platform:

• What is the cost? As with any tool, you need to consider how much you’re willing to spend in this area.

• What do I need? The needs in this area are fairly standard across the board for RIAs.

Private Investment Platform

Alternative investments are only rising in popularity, so we consider a private investment platform to be essential for modern RIAs. That being said, the concept of “alternative” is becoming more and more mainstream, and you may be able to access all the funds you need with your given solutions.

Questions every RIA should consider when choosing a private investment platform:

• What kind of investments do your clients actually want? “Alternative” is a broad term and can include pretty much any type of fund these days. What would your clients actually use? 

• Do I already have access to these funds with my existing providers? As we’ve said in other categories, take some time to explore your existing solutions to see if they offer an alternative platform or connect to something like iCapital.

Portfolio Management

Financial Planning

Financial planning solutions are essential in today’s planning-first landscape, so it’s surprising how poorly designed many of them are. 

Questions every RIA should consider when choosing financial planning solutions:

• Does the software fit with your planning style? Are you goal-based or cash-flow-based? Do you want straight-line or Monte Carlo simulations? 

• How user friendly is it? Find some reviews online, ask other advisors, schedule a demo and see if you can score a free trial of any solutions you’re considering. 

• Does it check off any of the other boxes you need in your tech stack? Financial planning often comes with data aggregation, proposal generation and other solutions. Just be careful not to choose a solution based solely on how many other tools it provides. Financial planning software is such a big part of what advisors do that you want to choose one you and your team will enjoy using. 

Proposal Generation

Proposal generation is likely built into one or more of your other solutions, but it’s still a factor to consider when weighing the pros and cons of another piece of software. 

Questions every RIA should consider when choosing portfolio generation solutions:

• Will it help you save time? Preparing proposals is a time-consuming affair, so find out how much of the process any tool will help you automate or use fields that automatically generate.

• Does it integrate with the relevant pieces of my tech stack? Part and parcel with the previous question is how well any solution integrates with the rest of your stack, allowing you to pull in information as needed with a couple clicks rather than jumping between programs.

Rebalancing, Trading & Order Management

If you plan on serving affluent clients, tax planning is a non-negotiable, and it’s growing in popularity for other clients as well. Having the right rebalancing and trading tool allows you to do your job more easily and help clients optimize their tax situation. 

Questions every RIA should consider when choosing rebalancing solutions:

• Does your custodian already offer a solution? Again, check the other pieces of your stack for a solution here. Many custodians have built their own trading tools, such as TD Ameritrade’s (now Schwab’s) iRebal. 

• Do any of your non-custodian solutions have a trading tool? Riskalyze built their own trading tool, and all-in-one solutions such as Orion and Envestnet | Tamarac offer solutions as well. 

• Does the solution make trading and rebalancing easier than just working in a spreadsheet? Some “solutions” are hardly more than spreadsheets, which is fine if that works for you, but by all means, just use Excel if that’s all you need.

Communications

Document Management Tools

It seems like every part of a financial advisor’s job requires a form of some sort. The wrong solution can leave you vulnerable to disorder and the possibility of losing documents. Luckily, there are plenty of solutions available.

Questions every RIA should consider when choosing a document management tool:

• How easy is it to use? The best document management platform in the world is worth nothing if your team doesn’t use it. Poor design and clunky user interfaces can decrease the likelihood of everyone using the same system. 

• How is it better than your current storage solution? You already have a document management/storage solution that you’re familiar with, likely provided by Microsoft or Google. What do other solutions offer that they don’t? 

Client Portal

You’ll probably end up using the portal that comes with your financial planning solution in the interest of consolidation. That being said, the client portal will be your clients’ main digital point of contact with you, so you want to make sure you choose a good one.

Questions every RIA should consider when choosing a client portal:

• Will your clients like using it? Look beyond how much you like the financial planning tool and consider the portal from a client’s perspective. Is it easy to use? Does it look nice? Does it display information in a way that makes sense?

• How can it simplify your day to day tasks? A good portal will streamline client communications, data gathering, aggregation and more.

Marketing, Social Media & Client Communications

Digital marketing tools come in every shape, size and cost. While several general marketing platforms exist that serve advisors well, many industry-specific marketing tools have popped up over the last decade to cater to the specific needs of the advisor world—namely compliance. Questions every RIA should consider when choosing a client portal:

• What are your marketing needs? All-in-one marketing solutions like Hubspot can do everything from build your website to schedule your tweets—and it shows in the price. Figure out what you actually need and compare solutions that meet those needs. 

• How flexible is the solution? Some digital marketing solutions don’t even allow you to customize the subdomain of the landing pages you create on their platform. Most do, but it’s important to poke around, or consult with a professional, before committing to any expensive annual commitments. 

• How much automation will it allow? A lot of marketing tools tout their automation tools, but severely limit how much you can do in all but their highest pricing tier. 

• How easy is it to use? Some solutions offer drag-and-drop editors, while others require at least a little knowledge of HTML to really get your emails looking just right. 

Firm Operations

Productivity & Remote Access

Remote work has become the norm during the pandemic, and it will likely never go back to exactly the way things were. The ability to work and meet remotely is becoming a must-have for employees and clients alike. 

Questions every RIA should consider when choosing remote access tools:

• Is it something clients and prospects will be familiar with? There’s nothing worse than clicking into a meeting right when it starts only to find that it’s hosted on some obscure software you have to download. Don’t do that to your clients. Consider a browser-based solution like uberconference or a familiar software like Zoom.

• Is it something you can use externally and internally? The software you use to host webinars is probably not the same software you’ll use for client meetings. Microsoft Teams is great for video calls, but you’ll never use it for client meetings. 

Compliance & Security

Every year seems to bring new security concerns to the world of advisors. The latest has been figuring out how to pivot from in-office security to on-device security as advisors increasingly clock in from home. 

Questions every RIA should consider when choosing security software:

• Does it help you meet the SEC’s cybersecurity requirements? RIAs have very specific cybersecurity guidelines they must follow, so keep them in mind as you consider security solutions. 

Accounting, Tools, Fees & Compensation

Billing solutions come with most portfolio management solutions—although there are standalone solutions worth considering—but you should still weight the pros and cons when choosing your PMS.

Questions every RIA should consider when choosing an accounting solution:

• How much of your billing and payments does it allow you to automate? An advisor should spend more time balancing client portfolios than balancing your own books. 

 

Leaving an established firm, either as a W2 employee or a 1099 business owner, can be daunting due to the vast variety of options and key decisions business leaders in transition must make. With Fusion Financial Partners on your team, you no longer have to make decisions without representation or stay up at night wondering if you made the right selection. 

Harness our “think tank” of a combined 75 years of executive leadership—knowledge honed from decades working in the independent RIA space—delivering prescriptive guidance and expertise to give you ultimate confidence to make sure your move is done right.

Want help putting together the tech stack of your dreams?

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