Envestnet has rolled out a new white paper bullet-pointing ten top tips for RIAs for before, during and after the implementation of new wealth management software.

It is unsurprising that the crowded playing field of technology vendors has led to uncertainty among RIAs when it comes to making strategic upgrades.

But while each firm is unique in size, with a distinct culture and client roster, a new white paper by Envestnet has outlined ten steps it believes will help RIAs broadly identify and implement new technology.

The firm said these are “not clichés” and may be of use to both technology vendors, in terms of understanding what clients are looking for in a provider, and RIAs themselves.  

1. An evaluation of a firm's existing underlying systems is first of all required to ensure it can indeed withstand an upgrade. Specifically, the first stop should be a firm's portfolio accounting system, as this is the foundation supporting all other software.

“If the PAS is not up to the task, the a change is in order,” Envestnet said in the paper, RIA Technology Solutions – Defining a Successful Implementation, by Stuart DePina.

2. The second point is around time allocation, as technology transitions and upgrades “can't be rushed.” The paper advises RIAs to have contracts with new providers at least six months before their current one expires. This gives them enough time to come to terms with the new technology and analyze how any changes may affect their clients.

3. Meanwhile, RIAs should look at a provider's financial industry expertise as well as carry out background due diligence.

“A preferred vendor possesses both financial services expertise as well as employees who have worked for RIAs,” the paper said.

4. According to Pew Research, 99 per cent of US individuals with $75,000 or more in household income use the internet. Envestnet believes that web-based products are the most effective way to engage with Millennials, as well as Gen X and older generations.

“RIAs must prepare for the coming wave of tech-savvy millennial investors, whose preferred methods for communication include tablets and smart phones rather than printer paper reports,” it said.

RIAs should therefore ascertain which technology providers offer the most interactive tools as well as those which are “committed to ongoing innovation.”

5. Meanwhile, it is important to anticipate possible software add-on options as an RIA may require additional tools and upgrades in the future. With that said, Envestnet noted that using one vendor for multiple software keeps core data more central and organized than integrating solutions from various vendors.

6. An evaluation of a vendor's existing client base may also be helpful, based on assets under management and/or amount of financial accounts. But besides the ability to support growing businesses, RIAs should ensure vendors have a solid track record of accommodating RIAs with specialized needs.

7. RIAs must ensure a vendor can provide their firm with “meaningful connectivity” in terms of integration. Applications need to be able to share data, Envestnet said, and this can be done manually or automatically.

“We believe that multiple vendors working together will never be able to integrate applications as deeply as a single vendor, because a single vendor with a unified technology platform will have far greater control of the inter working between the applications' functionality and data.”

8. It may sound obvious, but Envestnet stressed that RIAs should opt for vendors that frequently consult with clients during the implementation and conversion processes – this is a time-consuming and delicate procedure for any firm.

“Technology vendors that understand this take control during upgrades, guiding clients every step of the way and doing their best to make clients feel they have made the right choice,” the firm said.

Before inking the deal, RIAs should also check that vendors provide consulting services as well as online and in-person training.

9. Meanwhile, RIAs should see whether the potential vendor technology began as a desktop application and later moved onto to web, or if it has always been in the cloud.

This is because providers that started in the cloud likely possess more expertise in this area than those that previously focused on desktop software, according to the paper.

10. On a final note, “let the executive team lead the way for other employees,” Envestnet said, adding that RIAs can make the technology adoption phase easier by appointing internal subject manager experts to serve as a trusted central point of information and support.