How to Eliminate Costly Legacy Systems and Revolutionize Your Advisory Practice

Does your firm’s current software make you feel like you’re using a flip phone in an iPhone world? Today’s technology is moving quickly, and today’s advisors need to make sure they’re keeping up. You may think your existing tech is “good enough,” but good enough rarely is from a client experience perspective.

Beyond that, research suggests that by 2025, 40% of IT budgets will be spent on maintaining legacy technology, and those maintenance costs will only increase as systems get older and more outdated. While the familiarity of your firm’s existing systems may be convenient, the risks of holding on to them (including viruses and other security issues), certainly won’t be.

It’s clear that keeping costly, outdated legacy systems will hold back your advisory business, so we’ve put together a seven-step plan for upgrading and future-proofing your firm’s tech stack.

Step 1: Evaluate your Existing System

Before you start the journey to upgrading your firm’s technology, it’s crucial to thoroughly evaluate your existing system. Doing this will help you understand the limitations, costs, and inefficiencies associated with your current system.

• Assess the current systems: Take stock of all the software and hardware your firm is currently using, including portfolio management software, client databases, reporting tools, and other relevant systems.
• Identify pain points and challenges: Evaluate the shortcomings and bottlenecks of your existing systems. Are there frequent downtimes or performance issues? Is the software outdated and lacking modern features? Identify pain points that hinder productivity and service quality.

Step 2: Define Goals and Requirements

Once you have a clear understanding of the weaknesses in your current system, it’s time to determine your needs for your new technology solution.

• Identify essential functionalities: Determine the core functionalities and features required to enhance your financial advisory operations. Prioritize capabilities that will address the pain points identified in Step 1 and improve overall efficiency.
• Consider industry-specific needs: You’ll need a scalable solution that will be able to grow as your firm does, and security is vital, given the sensitive nature of financial data. You should also consider integration capabilities and regulatory compliance.

Step 3: Research Modern Technology Solutions

With your goals and requirements defined, it’s time to explore the market for modern technology solutions that align with your needs. Look for:

• Advanced systems designed for advisors: Cloud-based platforms offer scalability, accessibility, and reduced infrastructure costs. SaaS solutions can provide regular updates and maintenance, keeping your systems up to date.
• Comprehensive features: The most effective platform for your firm will offer a wide range of functionalities, such as portfolio management, client relationship management, reporting, and compliance tools, all integrated into a unified solution.

Step 4: Develop an Implementation Plan

To ensure a smooth transition to the new technology, you’ll need a comprehensive implementation plan that covers all aspects of the migration, including:

• Detailed migration plan: Create a step-by-step plan that outlines how you’ll move from the legacy systems to the new technology solution. Consider potential challenges and risks, so you can develop strategies to mitigate them.
• Milestones, timelines, and responsibilities: Define key milestones and set realistic timelines for each phase of the implementation. Assign clear responsibilities to team members and stakeholders involved in the process.
• Data migration and user training: Plan for data migration from the old system to the new one, ensuring that data integrity is maintained throughout the process. Organize user training sessions for anyone who’ll be using the new technology.

Step 5: Seek Vendor Partnerships

For a successful transition, it is essential to choose the right partners specializing in financial advisory solutions.

• Vendor evaluation: Research and evaluate vendors based on their track record, industry expertise, and reputation. Look for vendors who offer excellent support services and responsive customer service.
• Demonstrations and proofs of concept: Request these from shortlisted vendors to assess how well their systems meet the specific needs of your firm.

Step 6: Execute the Migration and Transition

With a solid plan and vendor partnership in place, it’s time to execute the migration and transition process. This involves:

• Phased approach: Implement the migration in phases to minimize disruption to your business operations and manage potential risks effectively.
• Coordination and testing: Collaborate closely with vendors, internal IT teams, and stakeholders to ensure a seamless transition. Thoroughly test the new system, perform data validation, and address any issues that arise.
• User training: Provide comprehensive user training to ensure that everyone who’ll be using the new technology is comfortable using it.

At CG Advisor Network, we manage all these steps for you as part of our comprehensive transition process.

Step 7: Retire Legacy Systems

Once the new systems are successfully implemented, it’s time to retire those legacy systems.

• Data archiving and transfer: Archive and transfer historical records from the old systems to the new ones to make sure all client data is preserved.
• Secure disposal: Develop a plan for securely disposing of hardware and software associated with the legacy systems to prevent any data breaches or leaks.

Change can be hard, and the thought of going through the exhaustive process of upgrading your firm’s technology might be what’s putting you off making that change. But the long-term benefits your firm will reap from changing to a tech-driven, specialist platform can be priceless.  

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Application Modernization Should Be Business-Centric, Continuous and Multiplatform. (n.d). Gartner. https://vfunction.com/resources/guides/application-modernization/

Securities offered through LPL Financial, Member FINRA/SIPC. Investment Advice offered through Capital Asset Advisory Services, LLC. dba CG Advisory Services, a registered investment advisor. Capital Asset Advisory Services, LLC., CG Advisory Services, and CG Advisor Network are separate entities from LPL Financial. Registration with the SEC does not imply a certain level of skill or training.