Among 2,374 members of Advisors4Advisors, the most popular CRM is Microsoft Outlook, which is used by 21.7% of those polled. The second most popular choice: no CRM (17%.1%) followed by Redtail (15.2%) and Junxure (13.9%).
A4A’s sampling of 2,374 advisors is smaller than a recent survey of 3,200 advisors published in Financial Planning but larger than the sampling of 1,000 advisors responding to a tech survey by Investment News.
A4A’s 4,500 members reflect a broad swath of private wealth advisors. Seventy percent of A4A’s members say they work at a Registered Investment Adviser (RIA) as an investment advisor (IA) rep, while 14% say they are registered reps, and 16% say they are “dually-registered" as an IA rep also licensed to sell securities.
Moreover, 67% of A4A members say they are owners of an advisory firm, while 18% say they are "professional staff," and 11% say they are "partners." Just 4% of A4A members say they are "staff." It’s fair to say that A4A surveys senior decision-makers in the private wealth advisory business.
With 10,000 unique visitors monthly, A4A has only about 10% the readership of those established publications. However, members are much more likely to respond to A4A practice management surveys than readers of other publications, perhaps because of A4A’s focus on practice management and way of engaging readers.
To be fair, A4A data also reflect the fallibility of all surveys of advisors: The results are highly dependent on the professional profile of the respondents.
Publications offering surveys of advisor technology act as though their data actually reflects independent advisor preferences. Truth is, however, that these surveys are unscientific. They reflect not only the biases of their authors but of the types of readers they attract as well as the resources expended and methodology employed.
It's like the story about six blindfolded men touching an elephant. Each one feels a different part, but only one part -- the side or the tusk -- and each describes the elephant very differently. Similarly, surveys of investment advisors touch one cross-section of the private wealth advisory business. Each survey by captures a slightly different segment of the invetsment advisor population, which does add to our understanding of independent advisors.
CRM Applications Used By Private Wealth Advisors
According to Advisors4Advisors survey results, Microsoft Outlook remains the No. 1 CRM application used by advisors. With 21.7% of the 2,374 A4A members responding to our poll saying Outlook was their CRM, Microsoft’s influence on advisors remains significant.
Notably, Investment News excludes Outlook from its list of apps because, it says, Outlook is not a customer relationship management app. Outlook is indeed a contact management app. Still, it is the closest thing to a CRM in so many advisor offices that A4A includes Outlook in its list of 16 choices advisors are asked about in collecting data on CRM systems.
Look for Outlook to make a comeback over the next few years as Web-based versions of Microsoft’s CRM are built by firms specializing in serving advisors and Microsoft’s mobile strategy emerges with Windows 8.
That Redtail is the most popular CRM among advisors in the A4A survey and others seems significant. It also does not surprise me. Advisors can always be relied upon to choose the lowest-cost solutions.
Redtail is a great value, however. How it matches up over the next few years against Salesforce will be fascinating. I’m rooting for Redtail and other entrepreneurial ventures of its ilk, but know Salesforce will attract many advisors.
Junxure is in the same position as Redtail in competing against Salesforce, which has been adopted by all of the major custodians. However, Junxure is handicapped because it is not a web-based app. Junxure is expected to launch a web-based version in the next year or so. Converting users to a new version when they can move to Salesforce will be a challenge.
To put in perspective our private wealth advisor CRM survey, it's helpful to compare its results to a survey of 1,100 advisors that I conducted in 2002.
In that survey, 35,000 readers of Investment Advisor and 750 advisors who were clients of Advisor Products were sent an email and invited to take the survey, which was the first-ever online poll on independent advisor technology. A quarter of the 1,100 respondents said Outlook was their CRM.
A decade later, although many more advisor-specific CRM apps and choices are available, Microsoft Outlook’s 22% market share has eroded only slightly from the 25% level of a decade ago. Advisors are alow to adopt new technology.
A couple of other observations on CRM apps over the past decade:
Junxure has grown amazingly. A decade ago, Protracker had about as many users as Junxure, according to the 2002 survey. ProTracker relative to Junxure has trailed off competitively. (Junxure-i and Junxure have since merged.)
The success of Redtail and Junxure reflect the entrepreneurial character of firms providing advisors with technology. Advisors using practice management apps provided by these privately-held companies should be aware of the risks.
These entrepreneurial ventures get acquired if they’re by larger companies, a trend I beleive likely to accelerate over the next decade. When an app you rely on gets acquired, it can result in a sharp change in the software company’s strategic plan and pricing. Advisors must have an exit plan and know exactly how to retrieve their data. See recent comments on A4A about how this issue can affect advisors.
Likewise, advisors choosing apps made by large corporate players like Salesforce should be aware of the risks they face. Large companies often don’t understand the advisor business and are don't tailor solutions to advisors and they're not as nimble privately-held software companies. A large user base can be a magnet for hackers and big companies don't all have a great record for respecting the sanctity of personal data, resulting in incidents like the scandal unfolding today involving Google.