What should advisors consider when they search for a back office solution? Morningstar® offers guidelines to help you make the right choice.
Scalability, Flexibility and Simplicity in a Back Office Solution
Independent financial advisors face many challenges when building and nurturing a scalable advisory practice. In addition to dealing with regulatory changes and fluctuating market conditions, financial advisors must consistently communicate and advise their clients in an ever-changing technological environment. While there are ample tools to assist financial advisors with the back office operations, the universe of options can be daunting. Software and service platforms can be stand-alone, all-in-one or full service/turnkey. Each of these options has pros and cons and offers various degrees of flexibility for independent financial advisors. In a perfect world, a “best of breed” approach would be wrapped into an all-in-one solution to provide scalability, flexibility and simplicity.
With any back office solution, a streamlined operation is the key to scalability. In a typical day, financial advisors utilize many software capabilities and these solutions need to interact with one another to reduce the need for manual data entry and duplication of data entry. Ideally, the process of sharing or synchronizing the data is automatic and requires little or no involvement on behalf of the user. This saves time and reduces the possibility of errors. It is also important for financial advisors to automate processes and leverage the capabilities of data aggregation, portfolio monitoring and alert-based rebalancing to allow more time to develop client relationships and expand their businesses. Once these processes and integrations are in place, an advisory firm can grow without the burden of major reinvestment and upcharges in technology. Incremental expense will scale with the business ensuring a continuous investment in evolving technology, keeping the firm up –to-date and operating in a modern environment.
Flexibility is paramount. Independent advisory firms grow and adapt over time, and the solutions they embrace need to proactively address industry and regulatory changes as well as monitor client needs and the demand for new and improved methods of client communication and collaboration. It is equally important that advisors have the ability to plug in additional capabilities as needed and customize both the user and client experience according to business priorities.
By consolidating support, training and licensing into one vendor relationship, financial advisors can simplify the process of daily operations, allowing more time to focus on client relationships and enhancing their businesses.
Morningstar® Office Suite may be the scalable, flexible back office solution that fits your growing business. You can explore the Scottrade® Strategic Resource Center to connect with Morningstar® and other organizations that specialize in technology, compliance, research, education and marketing. Many of these resources offer discounts to financial advisors who custody assets with Scottrade. (Scottrade provides this resource for informational purposes and does not specifically endorse any of the businesses within the directory. Scottrade also does not pass judgement as to whether those services are appropriate for specific business needs. Be advised this is not a full and comprehensive list of businesses that offer these types of products or services and that advisors are responsible for doing adequate research before making any purchases.)