2017 Software Survey Results: Mature Software Dominate Their Categories

Mar 14, 2017


Occasionally, I like to go back to my developer roots. Surveys allow me to wallow in data, looking for trends that will help advisors make technical decisions to make their business more profitable. As luck would have it, there’s a brand new survey to dig into: 2017 Software Survey: An analysis of the market share and user satisfaction rates in the financial planning/investment advisor space. It’s authored by Joel Bruckenstein of the T3 Tech Hub newsletter, Bob Veres of the Inside Information newsletter, and Advisor Perspectives. Interesting to note that 55.5% of the 1,064 survey respondents were fee-only – much higher than broader industry statistics.

The authors were very thoughtful with the way they analyzed the data, presenting it in a way that advisors can absorb and use to take action. For instance, they:

  • Provide rankings for how satisfied are advisors with specific software
  • Look at what software advisors may buy in the near future
  • Break out software ownership by different sized advisor firms

This will be one of my “go to” reference documents for the rest of this year.

I’ll break this post into two sections: a quick-fire run through the different software categories, highlighting interesting facts and then a broader interpretation of the data. In the commentary below I assume that if a respondent did not reply to a question that they did not have that category of software. This is not much of a leap, as in the mature software categories the answer rate was very high. I also spoke to both Bob Veres and Joel Bruckenstein, who provided their insights.

2017 Software Survey Results: Mature software dominate their categories Click To Tweet

Software categories

Reading the survey is the best way to consume this information; this is simply to peak your interest.

CRM: Redtail has 24.1% and Junxure 20.7% market share. Junxure shows strongly within this respondent group. Salesforce is 9.7% and Wealthbox, a new company that has just received another round of venture funding, has an impressive 4.2%. In the future, survey respondents are thinking of adding Redtail to their technology at double the rate of any other CRM.

Portfolio Management: Schwab PortfolioCenter and Morningstar Office have 24.5% and 21.7% market share, respectively. Every respondent stated that they had a portfolio management system, making it the most used category of software. Portfolio management falls into two models: software and outsourced. The survey shows that a high number of respondents are thinking about buying outsourced portfolio management.

Financial Planning: MoneyGuidePro has 41.8% and eMoney 25.6% market share. This is a category dominated by these two players. It is interesting how different they are, and that they also integrate! Advizr and Right Capital are making inroads with advisors who have recently started their firms. This is an innovative area, with many small software firms focusing on niches.

Document Management: A bit of a muddied category, as it also incorporates eSignature, form filling and comprehensive document storage (which I recently wrote a blog post about). The unsurprising, but concerning, news here is that 25% of respondents do not use document management.

Investment Analytics: Another category with a clear leader: Morningstar, with a 58.5% market share. Clearly, this is an opportunity and there are new entrants carving out niches.

Trading/Rebalancing: It is amazing that in this day and age, 59% of respondents are not using technology for rebalancing. The technology has been around for decades!

Client Portal: This is the most complex category, as it involves the investor, who has a much broader view and very different needs than the advisor. The big question is who should put this in place. Financial Planning? CRM? Custodian? Asset Management Platform? The answer is that all of these players are doing so and they often make the mistake of focusing on their perspective, not the investors’. eMoney has a 22% market share, and advisors often use them for just their client portal, although they are known as being one of the top two players in financial planning. Maybe because of this confusion, 54% of advisors do not use a client portal.

Risk Tolerance: An exciting category, as it is changing fast. 46% of respondents are not using a risk tool. Broker Dealers often provide their own, and other categories of software, such as financial planning, include a risk component. Of companies focusing on risk, Riskalyze has 25.8% and Finametrica 20.7% of the market share.

Client Data Gathering: I love that this section is in here. Not surprisingly, 71.5% of respondents do not use data gathering tools. This will change and it will be a category to watch. PreciseFP have currently made inroads in this category, with 12.0% of the market.

Technology Viewpoint

Dominance in key categories

When I asked Joel to comment on the survey he said, “One takeaway is that there is still healthy competition in most areas. One notable exception is financial planning; it is increasingly looking like a two-horse race between MoneyGuidePro and eMoney. Also in CRM, at least among our respondents, there is a strong preference for Redtail or Junxure. The consolidation in these two areas is something to watch because on the Dec. 2016 Financial Planning Tech Survey, the two technologies cited as providing the highest ROI are financial planning software and CRM. Furthermore, the ROI numbers have been surprisingly consistent for a number of years.”

New firm standouts

Joel continued, “One surprise was how well some of the smaller, less well known firms did in the satisfaction rankings. Asset Book and Advyzon in the portfolio management realm, Right Capital in the financial planning space, Y Charts in the Investment Analytics space, etc. What can we attribute this to? I don’t know for certain, but it could be that they are competitively priced and smaller, so firms have lower expectations, or it could be that they have carved out a niche that they understand well. But whatever the case, it is noteworthy.”

Inertia with current software

When I asked Bob to comment, he said, “I also thought the ratings reflect that advisors are generally satisfied with what they have. There were very few with a rating under 7.0, which I would put in the ‘satisfied’ range — and the overall rankings were pulled down by a few advisors who gave a ‘1’ score to everything, which sounds more like a bad morning than an actual evaluation. What does that mean? I would suggest that we’re not only measuring satisfaction rates, but also inertia. The message was: ‘No matter what we’re using, we feel pretty good about it, and so the pain of switching to something that might have more or better features will probably tend to outweigh the gain of those features.’”

Client portal

Bob then turned to client portals. “The low adoption rate for client portals suggests that advisors and clients are still not sure what information is important to have at a client’s fingertips. It’s an area we, as a profession, and also our consumers, are going to have to figure out over the next couple of years: what information people want, and what is the best vehicle and format to provide it. It’s like mobile technology; the early adopters are figuring it out, but soon every client will have their own portal. Which one? What will it look like? I have my opinions, and I’m sure Joel does, too, but the truth is that we won’t know for a year or two – maybe longer.”

It’s the business, not the technology

I’m between a rock and a hard place. A lot of the time, we guide advisors to a) not get deep into technology, as it distracts from your business and b) definitely do not focus on the latest shiny, technology with an unproven ROI. However, it is important to understand the different categories of software and how they align with your business goals. This understanding allows you to engage with different partners to understand how they can make you more revenue. The tough thing for an advisor is to find the right time to focus on a technology upgrade, which will inevitably distract (at least temporarily) from other revenue-generating initiatives.

No individuals or firms mentioned in this blog are affiliated with SEI or its subsidiaries.

Share Button
Raef Lee

Raef Lee

Raef Lee is the technology contributor for Practically Speaking and also serves as a managing director for the SEI Advisor Network.

Learn More About Raef Lee



Digital Advice Toolkit

Follow Us on Facebook

Recent Tweets