In a world where technology has become as essential as the air we breathe, the wealth management industry has not been left behind. Like a mechanic fine-tuning a high-performance car, wealth managers now use a variety of tech tools to keep their clients’ financial engines humming smoothly.
Take the case of Summit Wealth Management, a boutique firm that has made technology its co-pilot. The company’s founder, who cut his teeth in the automotive industry, likens his approach to a mechanic diagnosing and fixing an ailing car. “I’d walk into a distressed manufacturer. The first thing I would do is build a model and determine, ‘OK, here is where you have problems. Here are the fixes.’ I do the same thing now, but the fixes are based on portfolio allocations,” he explains.
But what exactly does this automotive-inspired approach look like in the world of wealth management? It’s a combination of careful portfolio construction, rigorous client communication, and strategic use of technology.
The Summit founder, who took over the firm in 2012, found that the previous owner had been using technology in a rather rudimentary way, akin to a driver who only uses his car to go to the grocery store and back. He was running separately managed accounts (SMAs) like mutual funds and communicating with clients via email, a method that required separate archiving.
The new owner, however, saw the potential for technology to turbocharge the firm’s operations. He implemented a suite of tech tools, including Goldman Sachs Custody Solutions for portfolio accounting, trading and rebalancing, and Advyzon for CRM, portfolio reporting and client portals.
The relationship with Goldman Sachs, like a well-oiled machine, has allowed Summit to create and manage a variety of portfolios, from dividend to defensive, based on the clients’ needs and risk tolerance. But, like a car with a faulty speedometer, Goldman Sachs doesn’t provide reporting. That’s where Advyzon comes in, providing a comprehensive suite of reporting tools and a client portal that offers real-time reporting.
But what about financial planning, the roadmap that guides all investment decisions? Here, the Summit founder found that Advyzon’s planning module was as useful as a flat tire. Instead, he turned to Moneytree Plan, a low-cost platform that allows for detailed modelling and projections, akin to a GPS that guides drivers to their destination.
But technology, like a car, is only as good as the person behind the wheel. The Summit founder emphasizes the importance of simplicity, a lesson he learned from his automotive days. “The more complex you make either your business model or product, the more failure modes you’re introducing into the system,” he warns.
In the end, the story of Summit Wealth Management is a testament to the power of technology in the wealth management industry. But it’s also a reminder that technology is just a tool, and that the real engine of success is a clear vision, a strong strategy, and a commitment to serving clients.
And what about the future? Will technology continue to drive the wealth management industry, or will it hit a speed bump? Only time will tell. But one thing is clear: for firms like Summit, technology is not just a tool, but a co-pilot, guiding them on the road to success.
As the Summit founder puts it, “We’re not typical. I try to keep it very simple. Coming from automotive, one thing I’ve learned is, the more complex you make either your business model or product, the more failure modes you’re introducing into the system.” And in that statement lies the crux of the matter. In the fast-paced world of wealth management, simplicity, clarity, and a keen understanding of the tools at your disposal are the keys to a smooth ride.
So, what’s in your wealth stack? Are you harnessing the power of technology to drive your firm forward, or are you stuck in the slow lane? As we navigate the winding road of the wealth management industry, it’s a question worth asking.