Advisor Technology

RIA software: How to select custodians and tech providers Jan 17, 2025 1:30:39 PM See what software is most important to other financial advisors and get tips (and a free tool) to help your RIA firm navigate tech decisions. In 2024, Betterment Advisor Solutions wanted to explore trends we saw emerging in the RIA space from the next generation of advisors. We surveyed 500 independent RIAs, of which 72% were Millennials (Download the survey). Below are our key takeaways on RIA software, along with tips and tools to help your firm implement new tech strategies. Table of contents: The top-ranked RIA software features Common challenges RIAs face when buying software Three tips for minimizing RIA software buying challenges RIA software ranking tool The top-ranked RIA software features We found that advisors generally find all features at least somewhat important to their daily operations. This stresses the important role that technology plays in the success of independent RIAs. The Top 3 most important features that an RIA software provider could offer for advisors were billing (52%), financial planning software (51%), and performance reporting software (51%) In our RIA survey, we asked the question, “How important are each of the following types of technology/software to your daily operations?” Respondents ranked their selections on a five-point scale, from “Not important at all” to “Very important.” Billing Financial planning software RIA Performance reporting software Tax management tools Cash management solution CRM Model marketplace Risk analytics Digital account opening software Portfolio management software Common challenges RIAs face when buying software Many advisors know the value of technology but are unable to implement new tools effectively for various reasons. When asked about their biggest challenges in implementing technology at their firms, advisors highlighted poor customer service and time spent training their team on new tools. Three tips for minimizing RIA software buying challenges If your firm is in the market for new technology, keep the following tips in mind during your buying process. 1. Assess the strengths and weaknesses of your current tech stack Before you start implementing any new technology, it’s important to first make sure that you understand the ins and outs of your current system so that you know what to look for in the future. There are two important reasons for this: Setting expectations: Knowing details about your current tech stack will help you understand how easy (or difficult) system migrations could be. Depending on your current tech stack, certain tech vendors may be more challenging to migrate to or integrate with. Knowing this will help you map out realistic timelines and costs for your project. Finding unused features: A firm may think they need to migrate off of a certain piece of technology, but in reality, they simply are not aware of all the features that a tech platform offers. This could be the case if you have been using a tech vendor for years and have not explored their updated features. If you are considering changing tech providers because of feature limitations or issues, contact your current vendor and see if they have a solution. Once you have a solid understanding of your tech stack, you can map out a forward-looking strategy involving migrating to new vendors where needed. 2. Map out your firm’s tech strategy Before you start browsing new tech providers, you’ll want to document the strategy and goals you expect to achieve. Ask yourself questions like: Is a simple, easy-to-use interface most important to you? Or maybe, it’s having customizable features? Are you looking to consolidate vendors for ease of management or leverage multiple vendors for best-of-breed tech? Work backward from your strategy and goals to help understand what needs to be done and what type of tech provider you should partner with. There are usually tradeoffs with technology. For example, the easiest tech to implement and provide training on may not offer the most customizable solution. On the other hand, highly customizable tech may be more complex to manage and take longer to get up and running. 3. Create a change management plan Regardless of your tech strategy, having a change management plan will help your team transition to new technology. A strong change management plan will incorporate the following areas: Change management team: Establish a dedicated change management team, or at the very least one leader, who will oversee the implementation process and manage stakeholder engagement, communication, and training. Project plan: Develop a detailed project plan outlining key milestones, timelines, and resource allocations. This should include both technical and non-technical tasks, such as software installation, user testing, and change management activities. Risk assessment: Conduct a risk assessment to identify potential issues that may arise during the implementation process. Develop mitigation strategies to address these risks and ensure the successful adoption of the new technology. Stakeholder analysis: Identify key stakeholders who will be impacted by the new technology, such as employees, clients, and partners. Assess their interests, concerns, and potential resistance to the change. Communication plan: Develop a comprehensive communication strategy to inform and engage stakeholders throughout the implementation process. This may include emails, regular meetings, training sessions, and one-on-one discussions. Training and support: Provide training and support to employees (and clients if impacted) to ensure they understand the new technology and how touse it. This may include online tutorials, in-person training sessions, and ongoing support from technical experts. Monitoring and evaluation: Establish a system to monitor and evaluate the implementation process, including progress against milestones, stakeholder feedback, and performance metrics. Use this information to make adjustments and improvements as needed. RIA software ranking tool Creating a strategic plan of action for your tech stack doesn’t have to be complex. Using the ranking tool below, you can help guide your firm’s strategy in as little as 30 minutes. How to use the tool? As you think through your tech strategy, use the table below to rank each type of RIA software based on its importance to your firm’s goals and level of satisfaction with your current software. You can compare the level of importance to the level of satisfaction to help identify software that you may need to replace with an improved solution, or software that your firm wants to keep and invest in continuous improvements. Complete this ranking tool once or twice a year to help monitor your tech stack’s performance. Pro tip: Print out this chart to manually fill it out.

Going independent: 4 key questions before starting your own RIA Jan 10, 2025 4:08:11 PM Thinking of breaking away to become an independent RIA? Ask yourself these four key questions first to help set your new firm up for success. The data looks promising if you’re looking to start an independent RIA… In 2024, PlanAdviser reported that the average Millennial who works with a financial advisor started looking for advice at age 29. That’s nine years younger than Generation X and 20 years younger than Baby Boomers. The great wealth transfer is now projected to be $124 trillion, and the population of Millennials in the U.S. hovers over 72 million people. There may have never been a better time to start an independent RIA looking to serve a growing high-net-worth market with demand for financial advice. But starting your own firm is a big undertaking–and a daunting one. Building your confidence starts with thinking through important facets of your plan. First, consider what success would look like for you. Many advisors who go off on their own, do so to gain more freedom and flexibility professionally—and personally. So, it’s important to think about what matters most to you. Below, we’ve laid out four key questions, as well as a business plan, to help you build a solid foundation for your firm. Question 1: Who do you need to support your firm? As you start an independent RIA, establishing strategic professional partnerships can help ensure you have the necessary resources and expertise to navigate the transition smoothly. These partnerships provide critical support in areas like compliance, technology, and operations, enabling you to set up a strong foundation for your practice from day one. You’ll likely need support from some, if not all, of the following professionals: Attorney: Throughout the transition, your legal counsel can offer valuable guidance, like reviewing your existing non-compete agreements with your current employer, helping you establish a business entity, and providing overall protection for your interests. Attorneys are a key resource, who can offer expertise on how to register a new business, for example. Online legal solutions can also be a solution if costs are a concern early on. Tax advisor: Having a tax advisor from the outset of going independent can be beneficial in addressing any tax-related questions or concerns that may arise. Thorough tax planning can help your firm remain in compliance and reduce your tax liability as you start a business. For example, your firm may qualify for tax credits available to new businesses. A tax advisor can help you claim all credits and deductions that you may not have known to be available to you. Compliance consultant: As an independent RIA, you will be required to have a Chief Compliance Officer (CCO) to oversee and ensure the firm's adherence to regulatory requirements. You can take on this role yourself, appoint an employee, or outsource the responsibility to a compliance consultant. Outsourcing the CCO function can be particularly beneficial during the registration phase, as it allows you to leverage the expertise of a seasoned professional, saving you valuable time. For example, a CCO can help with filing Form ADV and related documents, navigating SEC or state registration requirements, drafting tailored compliance policies, transition planning, and setting up necessary systems for recordkeeping and reporting. Marketing agency or freelancer: A polished brand is a key ingredient in ensuring prospective clients view you as a trusted, professional firm. A skilled marketing consultant or agency can help you develop a strong brand identity, create effective marketing strategies, and establish a differentiated brand presence. Services they provide can include website design, social media management, content creation, and lead-generation campaigns. Other RIAs: While you may not want to talk with direct competitors, seeking guidance from fellow RIAs who have successfully navigated the transition to independence can be valuable. By consulting with peers who have started their own RIAs, you can gain valuable insights and advice, which can help increase your confidence and better prepare you for potential challenges. If possible, speaking with RIAs who have made the transition from your current firm can provide particularly relevant and nuanced guidance, as they will have firsthand experience with the unique circumstances and obstacles you may face. We’re here to support you, too. At Betterment Advisor Solutions, we take pride in being a trusted guide for advisors looking to make the leap to become an independent RIA. We provide 1:1 support as you start your firm. Have questions? Talk to us today. Question 2: Where is your time best spent running your firm? When you’re first starting your firm, you’ll quickly find yourself wearing many hats. It’s important to understand your bandwidth and the key actions you need to take to build a successful independent RIA. For example, if you have few clients when you start, then business development, client experience, and business processes will likely require more of your time as you focus on growing your book. As more clients come onboard, your priorities will shift. Once you have a healthy book of clients, you’ll need to evaluate which activities are most valuable to your firm. For example, should you spend your time on investment management and portfolio construction? Or would it be better to outsource these tasks, and devote more time to clients and holistic financial planning? Review the following common activities, and prioritize those you feel are most important for your firm’s success: Business development: Attracting and acquiring new clients to grow your business Client transition and onboarding: Establishing a clear process for account setup and communication, including setting up client households and opening as many different accounts as needed Client experience: Delivering exceptional service and building strong relationships with existing clients and identifying opportunities to offer additional services, like tax or estate planning Business processes: Managing the operational aspects of your firm, such as compliance, marketing, and technology Wealth management: Providing holistic financial guidance tailored to clients' goals, such as retirement, education, and charitable giving Portfolio management: Developing and implementing investment strategies tailored to each client's unique needs and goals In our 2024 Advisor Survey, we found most advisors spend the majority of their time on financial planning. You can use the data below as a benchmark to compare how you spend time, but keep in mind the additional needs of your firm as you start the process of going independent. Question 3: What will your RIA tech stack look like? The term “tech stack” simply refers to the collection of software platforms and tools that you use to do business—and deciding what it looks like is one of the most important decisions for your new firm. Your tech stack can make or break your firm’s efficiency and the quality of service you provide to clients. It will include many different and often integrated software, but at the end of the day, it should be driven by this question: “How do I need to spend my time?” For example, you’ll likely want CRM (customer relationship management) software to track and manage all of your client data and interactions in one place. Without CRM, you’ll spend time manually tracking client engagements in spreadsheets, taking away time from serving clients. The four essential components of an RIA tech stack A comprehensive tech stack for independent RIAs should include the following four essential pieces of software. Custodial solution: Selecting a custodian is one of the most significant decisions for your firm. Your custodian is responsible for the safekeeping of the assets, processing transactions, and providing administrative support. Look for a custodian with strong tech capabilities for you and your clients—and the ability to integrate with your broader tech stack. Portfolio management: These technologies enable you to efficiently and effectively manage your clients' investments. The right portfolio management platform can range from providing simple model marketplaces to full-end-to-end tooling, including tax-optimization technologies, portfolio customization options, and more. Some custodians offer built-in portfolio management software, which can help your firm cut costs and streamline your operations. Financial planning: Financial planning technologies allow you to create comprehensive, customized financial plans to help clients budget, set goals, and plan for taxes. Many financial planning platforms integrate with custody software and customer relationship management (CRM) software, enabling a seamless and holistic approach to client service. CRM: CRM software is essential for managing client communications, collaborating with your team, and building long-term relationships with clients. A good CRM should be able to integrate client data from multiple systems and integrate with marketing automation technologies to track your client information and potentially send, or at least enable, personalized communications. Additional tools to support your firm's operations To run an efficient and effective firm, you may also require other tools, which can range from free platforms to robust solutions. Some of these tools you may wish to consider include: Compliance software: Compliance software covers a range of solutions, from simple archiving of firm communications to advanced cybersecurity strategies. In addition to software, your firm may require compliance consulting services, which can be provided by the software vendor or a separate third party. Accounting software: Manages your firm's finances, tracks expenses, and generates invoices. Billing software: As you sign clients, you’ll want to make sure you have billing software that integrates with your tech stack. Betterment’s fully integrated billing solution lets you set a fee schedule for each household during onboarding and automate collection and reporting. Marketing software: Automates marketing campaigns, manages social media, and tracks lead generation. Scheduling software: Streamlines client meetings, appointments, and communications. Video conferencing software: Facilitates remote meetings and collaborations with clients and team members. File management software: Securely stores and manages client documents, contracts, and other sensitive information. AI notetaking software: Automates note-taking, transcription, and data entry, freeing up more time for high-value tasks. As you review different software solutions, we can’t stress enough the need to look for platforms that integrate with each other. By carefully selecting and integrating these tools, you can build a robust tech stack that supports your firm's growth, efficiency, and ability to deliver exceptional services to clients. With Betterment Advisor Solutions, you’ll get a vertically-integrated product that combines custody with your most critical practice software, including onboarding, trading (or portfolio management), reporting, and billing. We recommend reviewing your tech stack on an annual basis to ensure it remains aligned with your firm's evolving needs and goals. Question 4: How will I transition my current clients to my new firm? Your current clients will be your most valuable ones as you start your independent firm. Client onboarding is a crucial phase of going independent. Although you may not be able to discuss your plans to start your own firm just yet, you can begin laying the groundwork for a successful transition. Talk to an attorney: Consulting with your attorney can be a smart move to ensure you're not violating any existing company policies or agreements. If permissible, start compiling a list of clients you'd like to invite to join your new firm. This may include gathering their contact information, such as names, addresses, phone numbers, email addresses, and account titles. Select your clients strategically: As you consider which clients to bring on board, take a strategic approach. Starting your own firm presents an opportunity to specialize in a specific niche or target market. Think carefully about the types of clients you'd like to serve and the services you want to offer. By defining your ideal client profile and target market ahead of time, you'll be better equipped to develop effective marketing and business development strategies when you launch your firm. This clarity will help you hit the ground running, allowing you to focus on building strong relationships with your new clients and growing your business from day one. Bonus: Building your business plan A business plan is not only helpful for you, as you start and manage your own firm, but it’s helpful for any key employees and partners of your firm. For example, a marketing agency or outsourced Chief Compliance Officer can use the information in your business plan to better serve your needs as they provide tailored advice and strategies to help grow your firm. Below is an outline to follow along with some tips for completing each section. Independent RIA business plan outline Executive summary: A brief overview of your RIA firm, its mission, goals, and objectives. Try to clearly explain why your firm exists in two to three sentences. The information in your executive summary can serve as a guiding light for many important stakeholders. For example, for you and your employees, it explains clearly why your firm exists. And for clients and potential clients, the language in this section can be used on your website and in other client communications focused on highlighting your firm’s mission. Company description: A detailed description of your RIA firm, including your history and details on any key employees, the business entity structure, and ownership structure. Writing this section ahead of starting your firm can help you have a clear understanding of steps you may need to take, such as creating an LLC and planning who will serve in key roles at your firm. For example, this section should detail who (internal employees or outsourced consultants) will oversee investment management, technology operations, compliance, and day-to-day operations. Market analysis: An analysis of your firm’s target market, including demographics, financial needs, and trends, as well as a competitive analysis of other RIAs in your market. You can conduct a market analysis yourself or work with a market research agency to assist with more in-depth analysis. If conducting market research yourself, you can leverage free data from the United States Census Bureau or Data Commons and then add paid data sources as needed. Services and products: A description of the investment services and products offered by your firm, including but not limited to portfolio management, financial planning, and other advisory services. Your services and how you price them should align with the needs of your target market defined in your market analysis. For services like financial planning, list out exactly what that will entail for your clients, including services like cash flow management, tax planning, retirement planning, estate planning, and risk management. Being very detailed in this section will allow you and your clients to understand what they are getting from your services. Marketing and sales strategy: A description of your firm’s marketing and sales strategy, including how it will attract and retain clients. One common approach to outlining a marketing strategy is using the “4 Ps” for your firm. The 4Ps help you document Product, Price, Place, and Promotion to help you build a strategy for promoting and distributing your services to the right audience. See our guide for creating a marketing plan using the 4Ps. If you have larger growth plans, this section can also describe your firm’s growth and expansion plans, including its strategies for increasing revenue, expanding its client base, and entering new markets. Operations and management: A description of your firm’s operational structure, including its management team, staff, and technology infrastructure. This section should cover the hardware, software, and network systems needed to run your firm and clearly explain how you plan to integrate your tech stack to run your firm efficiently. Financial projections: Financial projections, including revenue, expenses, and profit projections, as well as a breakdown of your pricing and fee structure. More formally, these projections should be used to create a three-year income, balance, and cash flow statement forecast to help with planning and goal setting. Also, as you transition from your current job to your independent firm, consider the funds you may need to set aside for personal expenses as you start your firm without much or any income. Compliance and risk management: A description of your firm’s compliance and risk management procedures, including its regulatory requirements and internal controls. Risk assessments should be conducted for regulatory compliance, market volatility risk, cybersecurity risk, and other practice areas such as marketing, advisor compensation, and trade execution. Human resources and staffing: A description of your firm’s human resources and staffing plan, including its staffing needs, training programs, and employee benefits. This section will be more straightforward if you’re a solo advisor, but it's important to clearly define staffing needs and roles if you have additional team members. Betterment Advisor Solutions is your partner for going independent Going independent means wearing a lot of hats as you grow your own firm. With Betterment Advisor Solutions, you get an all-in-one custodial platform that integrates and automates your most essential practice management and portfolio management tasks. From onboarding new clients to performing operational tasks and ongoing portfolio management, our team and technology will help advisors like you get set up with tooling to ensure you can cover many of your bases early on. We support hundreds of RIAs, helping them streamline their practices’ operations and technology. Take Eric, for example… “I run a solo practice — having a solid tech stack is essential to running my business successfully, especially with back office responsibilities. Having a partner like Betterment helps me streamline client onboarding and ongoing investment support so I can focus on other aspects of my business.” —Eric Rodriguez, WealthBuilders We’re here to answer your questions and be your guide as you set out on your independent RIA journey. Ready to talk?

How to set up the Kwanti integration Jun 18, 2024 2:49:13 PM Overview Kwanti is a prospecting, risk management analytics platform, delivering powerful tools that help financial advisors and portfolio managers optimize their investment strategies. Kwanti’s platform offers comprehensive analytics, portfolio management, and client reporting capabilities designed to enhance the decision-making process and client engagement. The information sent to Kwanti includes: Account information Positions Transactions Tax lots Enabling the integration You can set up this integration for your firm by taking the following steps: Log in to your advisor dashboard and navigate to Settings > Integrations. Select Kwanti from the list and click Connect to Kwanti. You will see confirmation that the integration has been enabled. Client data will be sent to Kwanti within one business day. Additional resources On-demand webinar: Converting more prospects into clients with Kwanti

How to set up the Wealthbox integration Jun 18, 2024 2:41:03 PM Overview Wealthbox offers beautifully designed CRM for modern financial advisors. We’ve partnered with them so that advisors can view Betterment client account balances and details directly from Wealthbox. The data sent to Wealthbox includes: Account information Positions Transactions Tax lots Enabling the integration You can set up this integration for your firm by taking the following steps: Log in to your Betterment advisor dashboard and navigate to Settings > Integrations. Select Wealthbox from the list and click Connect to Wealthbox. You will see confirmation that the integration has been enabled on Betterment's end and data will be sent to Wealthbox within one business day. Log in to Wealthbox. Go to Applications, select Betterment Advisor Solutions, and click Settings. On the next page, choose Enable and then click Save. You will be able to see client account information on the Contact Record page in Wealthbox by clicking the Betterment tab. This can take a few business days.

How to set up the RightCapital integration Jun 18, 2024 2:38:33 PM Overview RightCapital is a modern financial planning solution. Their software is built to make the financial planning process a breeze for advisors and clients. The integration between Betterment Advisor Solutions and RightCapital enables advisors to easily connect all account information so that values automatically update daily in RightCapital. The information sent to RightCapital includes: Account information Positions Transactions Tax lots Enabling the integration You can set up this integration for your firm by taking the following steps: Log in to your advisor dashboard and navigate to Settings > Integrations. Select RightCapital from the list and click Connect to RightCapital. You will see confirmation that the integration has been enabled and data will be sent to RightCapital within one business day. Once the integration has been enabled, RightCapital will reach out directly with next steps. Please note that the integration will only work for advisors that have funded client accounts on the Betterment platform.

How to set up the Redtail integration Jun 18, 2024 2:32:28 PM Overview Redtail is a leading web-based client relationship management (CRM) software firm serving the wealth management industry. We’ve partnered with them on an integration that sends client data once a day, allowing you to find important account information associated with the contact in the Accounts area on the contact record in Redtail. The information sent to Redtail includes: Account information Positions Enabling the integration You can set up this integration for your firm by taking the following steps: Log in to your advisor dashboard and navigate to Settings > Integrations. Select Redtail from the list and click Connect to Redtail. You will see confirmation that the integration has been enabled. Client account information and balances will be available in Redtail within one business day.

How to set up the Panoramix integration Jun 18, 2024 2:19:39 PM Overview Panoramix™ provides portfolio management and reporting software for RIAs and financial advisors. Specializing in billing and performance reporting, the Panoramix platform is multi-custodial and, with its wide array of partners and integrations, is flexible enough to integrate seamlessly into an existing tech stack, while still being robust enough to stand on its own. The information sent to Panoramix includes: Account information Positions Transactions Tax lots Enabling the integration You can set up this integration for your firm by taking the following steps: Log in to your advisor dashboard and navigate to Settings > Integrations. Select Panoramix from the list and click Connect to Panoramix. You will see confirmation that the integration has been enabled. Client data will be sent to Panoramix within one business day. Additional resources On-demand webinar: Help maximize your firm's efficiency with Panoramix

How to set up the Orion integration Jun 18, 2024 2:13:43 PM Overview Orion offers a variety of tools including portfolio reporting, billing, trading, and a client portal. The information sent to Orion includes: Account information Positions Transactions Tax lots Enabling the integration You can set up this integration for your firm by taking the following steps: Log in to your advisor dashboard and navigate to Settings > Integrations. Select Orion from the list and click Connect to Orion. You will see confirmation that the integration has been enabled. Client data will be sent to Orion within one business day. Orion will reach out directly to coordinate next steps.