Technology or the Advisory Firm? What Comes First?

Wikipedia defines the famous ‘chicken or the egg’ question as the “causality dilemma” and in our current world of technology, we cannot help but apply such a dilemma to our industry.

What comes first, the technology or the firm?

We work with so many advisory firms that continue to gravel with this dilemma – should we grow the firm’s AUM or focus on upgrading technology?

Here are some key points when considering both sides:

1. One drives the other

Anyone could argue that higher AUM could push the need for upgraded technology and interchangeably, allow for the funds to pay the bill. But there is another side to the coin. Could technology open the doors, allowing AUM to come knocking?

It’s a question every firm needs to truly discuss, and current operational structure is a great conversation starter. What is your RIA’s ROI? Where are you staffed heavy/light? Do you see a large incoming lead potential and feel like you haven’t tapped into it? Is your firm ready for a technology change? Do you need help from a strategist to reach your goal?

2. Neither is a wrong approach

Growing AUM is a worthy endeavor if your human capacity and current technology can handle the upswing. Upgrading technology creates efficiencies and is valuable if your staff and clients appreciate and adopt it.

Commitment is everything

No matter your decision, it’s the commitment to the end goal that counts. Research and make educated decisions. Listen, learn and ask questions along the way. Make staff accountable when meeting deadlines. A second opinion from an outside source is invaluable.

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