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May 2016

When You Don’t Know What You Don’t Know


Key Technology Issues You Need to Consider When Going Independent

By Craig Stuvland & Paul Dalton-tru Independence LLC

Advisors going independent have to contend with many challenges but choosing the right solutions for technology and compliance can be among the most daunting. Many advisors have worked for years within a cocoon of solutions provided by an army of well-staffed IT and compliance departments. They probably haven’t had to think much about the selection, installation and maintenance of the tools they use every day. In fact, they may not even be aware of what they use every day!

Consider this a breakaway advisor’s checklist of compliance, software and hardware issues and essentials to keep in mind before they open their door for business.  While this isn’t a comprehensive list, these are the major stumbling blocks and advisor needs to address to make a transition to independence go smoothly.

Compliance Requirements

  • Email and Electronic File Regulatory Compliance – All advisory firms are subject to SEC and FINRA email and electronic file compliance rules. These requirements are unfamiliar territory to many advisors, and navigating the minutia of compliance can be a complex maze. Email regulatory compliance can be best handled by leveraging a 3rd party vendor, with compliance archives automated at the server level to ensure that no action is required from the end user. For electronic file compliance, cloud based archive solutions offer fully indexed, auditable and searchable document repositories.
  • Personally Identifiable Information (PII) Protection – Advisors must obviously ensure the safety of their clients’ data. All PII should be encrypted, both at rest and in transit, behind a secure portal, and any long term archived data should have an additional layer of data encryption.
  • Data Security and Access – Advisors should make sure that access to data is limited to those who need it to perform their job function. Policies and procedures should be instituted that explicitly address data access, and periodic audits should be conducted to verify access and to determine appropriate limits.

Equipment Considerations

  • Office Equipment – When an advisor team breaks away from a wirehouse, they must leave behind all equipment, from computers to headsets to installed applications. It is crucial to purchase and set up all essential equipment ahead of the break so that advisors can hit the ground running.
  • Internal Office Network Infrastructure – Phone systems, conferencing systems, firewalls, copiers, printers and network cabling are all part of the technology back office. These components must come together seamlessly, reliably and securely to get a new team online and keep everyone connected.
  • Redundant Internet Connectivity – Given that today’s financial services industry runs online, a redundant connection to the internet is virtually mandatory for advisors. A backup connection, using a different service provider than the primary connection, is cheap insurance against outages and connectivity issues that can bring a business to a screeching halt.
  • Scalability –An advisor’s network and office infrastructure should be designed to accommodate growth as the business matures. The challenge is to strike a balance between what is needed right now and what will be needed in 18 to 24 months. This can best be achieved with a scalable network that has the capacity to support upwards of 50 users from day one if needed, but that is cost effective for as few as one or two.

Software Essentials

  • CRM Customization and Integration – As the amount of data contained by CRM systems continues to grow, the challenge is to make sense of it all. Integrating different systems through the use of API’s and custom solutions can provide tremendous value to advisors. CRM customization can provide significant productivity gains for office staff, and gives advisors an overview of activity across the business, with dashboards that aggregate and display data.
  • Platforms and Applications – Advisors use a variety of sophisticated applications and platforms for investment, portfolio monitoring, trading, and order management. Since most have never had to select these applications, new teams are often best served by experienced specialists who can point them to appropriate solutions. Having all tools correctly set up by launch time is also critical to the success of the firm.
  • Unified Client and Advisor Portals – Clients increasingly expect to manage their relationships with service providers electronically, and the ability to provide unified client portals can serve as an important differentiator for advisors. However, these portals are expensive and time-consuming to develop, implement and maintain, making the barrier to entry too high for many independent firms. One solution is to leverage specialized service platform providers that develop and customize advisor and client portals.

Two More Points to Keep in Mind

  • Mobile and Remote Work Capabilities –Advisors want to access their client data and get calls on the go, whether this is from home, at a conference or on the golf course. The ability to communicate with clients effectively and seamlessly can also be a valuable differentiator, setting the advisor apart from competitors, and so careful attention should be placed to ensuring optimal remote work capabilities.
  • Ongoing Support and Maintenance – No matter how carefully chosen and installed, technology breakdowns are inevitable. Finding an experienced provider of 24/7 technology support and maintenance is therefore crucial to a breakaway advisor’s success – and equally important, for their peace of mind.


Craig Stuvland is President/CEO & Paul Dalton is Chief Technology Officer of tru Independence, a premier consulting and services platform for wealth management firms seeking their independence.


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