Financial Advisor’s Guide To Establishing A Next Generation Financial Planning Firm

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Fresh out of college I went to work for an established financial planning firm that had $150+ million AUM. My first project was to begin researching new technologies, and make recommendations for conversions to be made in the future. On top of becoming knowledgeable about technology available for financial services, I learned just how expensive it can be to convert from one system to another.

When I started Serenity Financial Consulting in the summer of 2012 (less than 1 year ago!) I was able to start from a clean slate - no $10,000 conversions from dbCams, Junxure, or Goldmine. I certainly have had to balance cost, as the "ideal" technology out there was simply out of reach (e.g., Tamarac’s Advisor suite starts at $22k/year), but I knew I was building a firm for the long haul and needed the tools in place to make it happen. So, here is a breakdown of the technology I’m currently using, how much it costs, how it all works together, and technology I’m evaluating for the future.

Tech I’m Using Today

Note: * after cost indicates a discount that you may or may not qualify for

Financial Planning Software:
MoneyGuidePro - $995*/year

MoneyGuidePro (smartly) offers a free version to universities, so I actually learned how to use MGP while in college. I used it at other firms in the past, so I naturally subscribed when I went out on my own. I like goals-based software over cash-flow based, so it was right up my alley. Excellent customer service and great integrations help make it a fantastic program.

Risk Profiling:
FinaMetrica - $495*/year

I use FinaMetrica to give an objective view of a client’s tolerance for risk. It has a great integration with MoneyGuidePro, so clients are able to fill out the survey through the MGP client portal.

Performance Reporting:
BlueLeaf - $117.50*/month

When evaluating performance reporting software, I looked for one that had low upfront costs, the necessary integrations, and gave clients access to their own data. I don’t believe I should be the holder of investment data, so clients have real-time access to their performance reports. Instead of calling me to see how a recent event affected their portfolio, they can just check it out for themselves. BlueLeaf also allows clients to give me compliant access to their held-away assets, and even bank accounts. So when a client requests $10,000 cash from their IRA, I can see it hit their checking account and let them know it is there. Finally, Blueleaf has eliminated the need for quarterly reporting, saving me weeks of time per year, and added years to my life avoiding the stress of the process. You can even do your billing through BlueLeaf if you want.

Client Report Delivery & File Sharing:
DropBox – Free

BlueLeaf uses DropBox to share reports with clients. So, I set up a shared DropBox folder with each client, and BlueLeaf reports show up for the client automatically. I also have a shared folder with the attorneys and accountants I frequently work with, and they drop documents into the folder as they are generated. Saves a lot of time chasing down documents.

Rebalancing:
TradeWarrior - $350*/month

TradeWarrior is working on an integration with BlueLeaf, which will allow for seamless data transfer between the systems. Having TradeWarrior allows me to rebalance all client accounts in minutes, which is good because I do a rebalance check once per week to see if clients are out of our target ranges. TradeWarrior generates trade files for each custodian, which streamlines the trading process. I am anxiously awaiting their move to the cloud (currently their program is hosted on their server, and I use a log-in to remotely access it) next year which will eliminate the need for uploading trade files, and for constant review of portfolios, since you can just set alerts to let you know when a client is out of balance, instead of having to run reports.

Account Trading:
NetX360 - Free

NetX360 is the trading platform used by Shareholders Service Group, my custodian. Basically I just upload the trade files generated by TradeWarrior and voila!

Data Gathering:
PreciseFP - $179.55*/year

For anyone still manually entering client data, you really need to check out this software. I have clients enter all of their own data, which has practically eliminated all errors. I usually have to spend 10-20 minutes per client cleaning up the data, particularly in the assets section because clients tend to not input ticker symbols. Overall, it saves me an immense amount of time.

Client Relationship Management (CRM):
Solve360 - $39/month

Have you ever met an advisor that liked their CRM? Me neither… so I got one that would do the job in the short run. I hate paying upfront costs for software, so I stayed away from SalesForce which is what I really wanted. Solve360 has a very tight integration with Google Apps (see next), so each client contact record has all e-mails with the client, notes, tasks, and such. There is also a Project Blog section that allows for task lists and workflows, which I have found to work really well. It doesn’t integrate with any financial planning software, but I can say from my experience using a very popular financial planning CRM that integrates with practically every system, integrations are irrelevant if the product sucks.

E-mail:
Google Apps (Gmail) - $5/month

This was the first software I chose. I wasn’t going to use Outlook and try to host it on an exchange server, and you can’t beat the price and functionality of Google.

Document Management:
Google Apps (Drive) – Included in Gmail pricing

I have all of my files in Google Drive right now, which acts a lot like DropBox. I have files on my desktop so that I can access when not online, and any changes are synced to the cloud, and then updates the files that others (such as my assistant) have shared access to.

Calendar:
Google Apps (Calendar)  - Included in Gmail pricing

Can’t say much about a calendar system except that it works.

Online Meeting Scheduling:
Bookeo - $14.95/month

This piece of software is my pride and joy, and probably the number one way I attract clients I want to work with, and filter out those I don’t. Bookeo syncs with my Google Calendar, and allows prospective clients to book a "Get Acquainted" meeting, and existing clients to book review meetings, straight from my website. I have never heard from 75% of my Get Acquainted meetings before I actually meet with them – the first (and only) time I hear from them is the e-mail from Bookeo confirming their meeting. You can request as much information as you need, but I only ask for name, address, phone, and e-mail. Plus, it integrates with MailChimp so they can sign up for my newsletter while booking a meeting. For client review meetings, I can simply e-mail out a link to the scheduling system, and they can book a meeting at their convenience.  No more playing phone tag, trying to book client meetings. Plus, it lowers the barrier of entry to prospective clients, as they don’t even have to call to get on my calendar.

Electronic Document Signing:
EchoSign - $19.95/month

I am 100% paperless, so electronic contract signing is a must. I can e-mail client contracts, account opening and transfer forms, and anything else that needs a signature. Clients simply click the e-mailed link, and then sign using their mouse. It is SEC compliant, saves me reams of paper, and makes the process of getting documents signed much easier.

Newsletter Delivery:
MailChimp - $11/month

I love MailChimp for its simple interface. If you can’t code in HTML, you might want to hire a designer to help get it set up for the first time, but this is how I manage my newsletter without spending a lot of time on it.

Website Hosting:
WordPress & GoDaddy - $40/year

If your website isn’t hosted with WordPress, hire a new web designer. I hear advisors tell me all of the time “My web guy updates my website once per quarter.” If this is you, find a new web designer, and put your site on WordPress. Even the most technically challenged can update the text and images on their site on the fly. With some basic skills, you can even add new pages. There is no reason to have a static website, and if you do, you are losing clients.

Phone:
RingCentral - $114/month  (3 office locations)

I have offices in Milwaukee, Wisconsin, and also Bozeman, Montana, and an assistant in Georgia. Finding a phone system that would allow for this was difficult, but doable. RingCentral allows me to have desktop phones that operate over the internet (VOIP), an app on my cell phone so I can make calls from my business number while out of the office, and more. It even allows clients to text my work number. Due to compliance, I can’t send texts yet, but hopefully that will change soon.

Ruby Receptionist - $229/month

I hate being tied to my office, and am always afraid I am missing phone calls. So, I hired Ruby to answer my phones, and they are amazing. I had a client e-mail me recently to say how impressed they were with my new receptionist. As a solo practitioner, it allows me to not worry about missing calls while in meetings, on the road, or just not in the mood to answer my phone. They even have an app so I can update Ruby on which phone number to call me at (ie. cell, office in Bozeman, office in Milwaukee), or tell them to just take a message.

E-mail Archiving:
Google Vault - $5/month

I started out with Smarsh, and I have to say they are the worst company I have ever dealt with. Fortunately, Google recently released Vault which is a compliant e-mail archiving system. It is super cheap (Smarsh was $40/month) and integrates seamlessly with my email.

Social Media & Website Archiving:
Arkovi (Now RegEd) - $15*/month

Arkovi does a great job of capturing every tweet, like, share, and change to my website. This is a program I hardly remember is there until the regulators show up.

Google Apps Backup:
Spanning (Includes e-mail, calendar, documents, & contacts) - $20/year

Spanning integrates with Google Apps, and backs up all of my data on a daily basis onto Amazon’s servers. If I accidentally overwrite a template file, or delete something I shouldn’t have, I can very easily go in and restore the data. If someone hacked my account and deleted everything, it would take about 5 minutes to have it all back.

Social Media Management:
HootSuite - Free

I use Twitter, LinkedIn, Facebook, Google+, and YouTube in my business, so having a program to help manage that is great. Hootsuite is free, and gets the job done.

Accounting & Payroll:
QuickBooks Online - $50/month (includes payroll for out of state employee)

QuickBooks Online is a very easy-to-use accounting program. You can easily invoice clients, track expenses, and do payroll through the system. Plus, 99.9% of accountants know how to use it, so it is easy to give them access come tax time. It also integrated with WellsFargo (business bank) so expenses are automatically uploaded to QB.  And after nearly losing my mind trying to do payroll the first time, it takes about 4 clicks per pay period to direct deposit checks for me and my assistant. Best of all, they fill out and file all of the ridiculous amounts of paperwork needed by the state and IRS.

Virtual Meetings:
Skype - Free

About 50% of my clients don’t live near an office, and even some local clients prefer not to deal with traffic, getting a baby sitter, and such. So, virtual meetings are a must. I recommend setting up a personal account (not a business account) since you can screen share for free from it. It isn’t the most stable program, but it is working fine for now.

Credit Card Processing:
Square – Free (2.75% per swipe)

I love being able to take client deposits while standing in my office. I mostly work with young professionals, some of which don’t even have checkbooks, and most of which don’t carry it with them. We can easily run their debit/credit card through the free device plugged into my phone/tablet. Yes, I do lose 2.75%, but it is well worth it. I can even take their card number over the phone and run it without them being present, however this costs a little more.

Watch Internet For Media Mentions:
Google Alerts - Free

I have alerts set up for my name, company name, and more, to be sure I don’t miss any mentions in the media. I frequently talk to reporters, and have no way to keep track of being quoted. Some reporters will let you know they quoted you, others don’t, so this is a must-have system. Also, I set up alerts for high-profile clients so I can send a “Hey, saw you were quoted in the NYT” e-mail when it happens.

Website Traffic Information:
Google Analytics – Free

There is no sense in having a website if you don’t know how people are using it. Google Analytics tracks every person that visits your site, so you can see where traffic is coming from. Are people clicking through from your e-mail newsletter? Getting hits from NAPFA/FPA/CFP? What about social media? You can also see how people flow through your site, so you know what pages they drop off of, view the most often, and the ones that never get looked at.

Password Management:
LastPass - Free

LastPass allows you to save all of your username and password in their system, and only have to remember one password (I recommend using a pass-phrase). I have 270 user names and passwords saved in LastPass, and the only way I could otherwise remember them all is to have the same password for every site. This is a horrible idea! LastPass will auto-generate passwords like "IkNo7EjuXY7V" which is going to be much tougher to crack than your e-mail password. And yes, you can back up your data so if LastPass goes down, you still have all your passwords.

How It All (Sort-of) Works Together

Total Costs

Monthly Subscriptions: $970.40

Annual Subscriptions: $1729.55

Total Annual Cost: $13,374.35

An estimate of pre-discounted services is: $15,375. Wondering how I got discounts worth $2,000? Well, here is a quick breakdown:

MoneyGuidePro: Membership in the Garrett Planning Network, or using Shareholder Service Group as your custodian, will get you this discount. They have preferred pricing with a lot of organizations and custodians, so just be sure to ask.

FinaMetrica: As a MoneyGuidePro subscriber, you can get FinaMetrica for 50% off.

BlueLeaf: They offer a 5% discount for putting a link back to their site on your webpage, 2 months free if you pay for the year upfront, and another 2 months free if a subscriber refers you to them. Want 2 months free? Just let me know! 🙂

TradeWarrior: I was willing to be a beta tester for the integration between TradeWarrior and BlueLeaf, which earned me a bit of a discount.

PreciseFP & Arkovi: Both have preferred pricing for members of the Garrett Planning Network.

Tech I’m Evaluating

New CRM:
XLR8

While I am good with Solve360, I would love to move to something that integrates with Google Apps and all my financial planning systems. I absolutely hated Redtail when I did a trial (plus it can’t work with Google), so that leaves SalesForce. XLR8 is basically a customized version of Salesforce for advisors. The only thing holding me back is the $75/month/user fee and upfront set-up costs.

Financial Planning Software:
InStream

If InStream integrated well with my other systems, and had a FinaMetrica discount, I probably would have moved to it already. It is a free financial planning software that is much more proactive than current systems available, and represents the future of financial planning software.

Form Filling Software:
Laser App Anywhere

This will allow for easier form filling, plus the Anywhere version is cloud based.

Virtual Meetings:
Google Hangouts and GoToMeeting

Skype isn’t stable enough for my liking, so I plan to test Hangouts, and it if doesn’t work well enough, then I will probably just pay the $50/month for GoToMeeting.

Credit Card Processing:
Authorize.net and Intuit

I would like for clients to be able to pay my retainer fees monthly out of their checking account, so these are on my list to evaluate as options.

Accounting/Payroll System:
Wave Accounting

I cringe when I have to pay the QuickBooks monthly fee, and I have heard good things about Wave so I plan to try it out.

Data Gathering:
WuFoo Form Builder

While I like PreciseFP, it doesn’t integrate with my CRM (or SalesForce if I move to it), and really isn’t all that customizable. So, I would like to find a system that allows for more flexibility, and plan to see if WuFoo is the answer.

In closing, a quick story

I started my firm using a laptop I had from college. About 3 months in, it crashed. In most firms, this would have literally been the end of their world for weeks or even months – restoring data from off-site servers (which doesn’t happen as easily are you are led to believe), or they might have simply lost all of their data. I worked for a firm that backed up their data quarterly, so if their server went down, they were in big trouble, as they could have lost 3 months’ worth of work. I went to BestBuy, bought a new computer, and was up and running in less than 1 hour as if nothing had happened (It only took an hour because it had Windows 8 on it, which might be Microsoft’s worst invention).

I have 1 rule when it comes to technology – nothing installed on my computer. Everything has to be cloud based, or running on the software provider’s server. I don’t have the money for a server, and I trust my data to Google who has armed guards protecting their systems. And if you think “Oh but someone could hack Google” you are right… and they would have to get past the best system protections in the world… on the other hand, a 12-year old could probably hack the server sitting in your office.

I am by no means utilizing technology to the best of my ability, but I am always looking to try new things. I figure if I don’t replace one of my technologies every 3 months, I am probably falling behind. Plus, this helps spread out the costs because the longer you wait, the more expensive a conversion will be.

I would love to hear any comments, questions, or snide remarks, regarding this post (which ended up being much longer than expected)!