Thought Leadership in Action

Let’s say you’re a representative at a broker-dealer (BD) that has just been bought up by a larger BD. You learn that CRM technology is included with the new umbrella company’s platform — and it’s free.

It’s a common scenario in the financial sector: A large company scoops up a smaller one, and you as an individual representative of the smaller company are offered a free or low-cost customer relationship management tool to organize your clients. Sounds like a great deal, right?

But there are a few considerations that you should keep in mind before migrating over your data. After all, if you’re a sales representative, accepting the new home office’s CRM can mean essentially turning over your book of business that you have spent a good chunk of your career building.

Here are some things to think about before you say yes.

Does the New Tool Meet Your Needs?

Before you switch platforms, make sure the new tool has the features you need to serve your customers.

No one runs their practice the exact same way, which means any technology you adopt should be malleable enough to support your goals and personality. For example, an advisor that’s building a practice has different needs from an advisor who is established and focusing on servicing, referrals and succession planning. And they also differ from two advisors who form a producer group and are looking to expand their offering as a team. You’re going to want tools that bend around who you are and have the capability to grow with your changing needs.

A CRM is in many ways like your home. If you’ve been there a while, everything is familiar. You know where all the furniture is, how big each room is, what’s in the closet, etc. Big moves can be fun -- if you’re prepared. If you’re not prepared, it’s chaos.

Before you make the leap, find out what you can expect to take with you if you convert your database to the new CRM. Will this new CRM (house) fit your needs? Does all the furniture (e.g. notes, emails, documents, policy information, household information, etc.) fit or do you risk losing any in the move? Does the moving company have the proper equipment to bring everything over to the new house, or are they showing up with a pick-up truck when they should be bringing a tractor-trailer (e.g. is the new CRM company actually converting your data or importing it through some variation of Excel)? Does the plumbing and electrical work properly (e.g. does your CRM integrate with your other financial technology tools the way it does now?)

Ask yourself, is it worth the disruption to move or is worth it to just invest in the tool that you already have?

Who Controls the Data?

Anytime a product is free, you are the product — or your database of client information is.

Before you switch to the home office CRM, confirm who will own the customer data you bring in. Who has day-to-day control over it? Can other people within the larger organization view and use the database you built without your knowledge or consent?

To continue our house analogy, do you have a secure place to put your safe with your grandmother’s silver (e.g. does your new CRM give you proper cybersecurity and permissions to only let your trusted team view your data)?

Finally, be sure to ask how upgrades are handled. If you’re not in control, then you don’t want to be left waiting for someone in a far-flung office to make a decision on rolling out new features. By the time they get the approval, there’s already a batch of new features available.

Are You Properly Valuing Your Data?

It’s important to remember that customer data has a significant value all its own, and you may not want to share that without compensation.

That database you’ve spent years or even decades building represents your sweat equity and hustle. Many sales representatives in financial services start out by finding clients among those close to them: family members, friends, professional colleagues and notable people within their community. Over time that extends to a wider net of clients as new relationships start and existing ones deepen and grow richer.

What will happen to that data if you decide to change companies, sell your equity in the firm or retire? Your customer network is a key part of your succession planning. With a shared CRM, you may find that ownership of the data now lies in other hands.

Owning your own customer data may afford flexibility and protection that far outstrips the value of saving a few bucks on software.