Top 3 Los Angeles Investment Advisor Technology Problems

Author: Craig Pollack Date: Aug 18, 2015 Topics: _Investment Advisor Blogs

Top 3 Los Angeles Investment Advisor Technology ProblemsEach year, Los Angeles investment advisors spend significant amounts of money on technology programs and services. It is an investment driven by a variety of factors:

  • Regulatory mandates
  • Changing business needs
  • Requests by auditors or regulators

Despite the considerable time and money being invested, there are still three technology problems that challenge Los Angeles investment advisors. Addressing and overcoming these issues will allow wealth management companies to tackle present and future challenges more effectively.

Failure to Embrace CRM

Despite its widely acknowledged value, CRM adoption among investment advisors continues to be below the industry average. Here are some of the most commonly reported barriers.

  • Limited technical expertise: Smaller firms without a dedicated IT department or who work with a smaller provider claim that they have no idea how to make the switch to CRM services such as cloud-based solutions.
  • Concerns about higher upfront costs: These investment advisors see the value of a new CRM but believe that moving to a system is too expensive.
  • Uncertainty over the unknown: Although they agree that CRMs look like great tools, many firms do not want to change their existing system because they believe it works for them, however limited.

CRMs have a demonstrated value when it comes to saving time and simplifying daily workflow, so adopting one can mean the difference between success and eventual failure.


In 2014, the Securities Exchange Commission surveyed 106 firms (both broker-dealers and registered investment advisors) to get a better picture of the industry’s cyber-security risk. 74% of registered investment advisors reported that they had experienced some form of cyber attack, and 43% said they had received fraudulent emails requesting client money transfers.

One incident involved a former Morgan Stanley Smith Barney advisor who, unaware that the customer’s email had been compromised, wired a total of $521,500 to a cyber-criminal. Although Morgan Stanley had strict guidelines in place for thwarting these scams, the advisor in question did not follow the firm’s authentication procedures.

Susan Axelrod, Finra’s head of regulatory operations, warned that companies “must make responding to these threats a high priority.”

Robo Advisors

Although robo advisors have been around for a while, not all Los Angeles investment advisors regard them as major competitors. The trend has not picked up many client assets as of yet. However, more investors are finding them appealing because online managed account services range in cost from free to 0.35% of the invested assets, while the typical wealth management client pays around 1%.

Frederick P. Gabriel Jr., the editor of Investment News, wrote in early 2015 that robo advice “is a game changer and is likely to have unforeseen consequences on the business of providing advice.”

Bottom Line

To remain profitable and competitive as technology evolves, Los Angeles investment advisors need to overcome these and other digital obstacles. While the personal touch will always be significant, the importance of a strong technology platform cannot be underestimated.


What technological problems does your CPA firm face? Let us know your thoughts in the Comments box below.


And to follow-through on the tips introduced in this short article, be sure to download your free guide, Investing in High Net Worth Clients: The LA Investment Advisor's Guide to Using Technology to Manage and Grow Your Firm.


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Craig Pollack

Craig Pollack

Craig is the Founder & CEO of FPA Technology Services, Inc. Craig provides the strategy and direction for FPA, ensuring its clients, business owners, and key decision makers leverage technology as efficiently and effectively as possible. With over 30 years of experience building the preeminent IT Service Provider in the Southern California area, Craig is one of the area’s leading authorities on how small to mid-sized businesses can best leverage and secure their technology to achieve their business objectives.