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How I picked technology -- from Black Diamond-in-SSG to Dudamobile -- to use in my startup RIA

We're free of legacy systems and just in time for mobile computing, cloud storage, and social media's adoption by the masses

Tuesday, February 12, 2013 – 5:23 PM by Guest Columnist Lyman Howard
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Lyman Howard: We feel we could have gotten away with cobbling together some freeware ... That option, however, would have left us with zero customer service.

Brooke’s note: It’s true of life, love and the SATs. We’re all fascinated by and we trust people’s first impression of things when they come in with no preconceived notions. (They always told me to pick the SAT answer that grabbed me first if I didn’t know.) First impressions may not always be perfect but they are at least revealing. So when Lyman Howard offered to write an article about a world of choices he had to make as a start-up RIA, I did not have to think twice about accepting. I was flattered that Lyman tipped me off that he got going on his RIA life by carefully reading RIABiz articles but clearly he figured out much on his own. We can all learn from that. Stay tuned for an upcoming column from Lyman relating in more detail the “origin story” of his start-up RIA.

My business partner Jim Mitchell and I have been following RIABiz for more than three years now, from back when the thought of setting up our own shop was in its infancy. We were becoming disillusioned with our roles in the financial world — not to mention the financial world’s role in its clients’ lives. See: One RIA’s unvarnished views on Advent, Black Diamond, Tamarac, IAS, Orion and Schwab PortfolioCenter after an odyssey of test drives.

Fast forward to today, eight months beyond state registration and in that scramble for assets which will make or break us within the next year. We credit RIABiz for making us passionate advocates of the RIA model, validating many of our strategies, alerting us to the right vendors for the right reasons, and introducing us to some of the local players in the industry who have become vital resources. Thank you! (Did I mention we might lay some blame on RIABiz for getting us into this, too?) See: 11 steps to becoming an RIA without upsetting Merrill Lynch, the SEC or your clients.

Technology candy store

While it is difficult to construct an efficient and compliant business from scratch, it has also been a luxury. Why would I say that? Well, our clean slate has allowed us to start operations with the latest technology working to our benefit within a lean budget. Not only are we free of legacy systems and procedures, but we also arrived on the scene in 2012, just in time for mobile computing, cloud storage, and social media’s adoption by the masses. I would guess that the costs to set up and operate an investment management practice have dropped by a third over the last five years, since the costs of advertising, storing information, making telephone calls and finding out information generally have been melting away. See: 12 key events of 2012 that rocked the RIA technology landscape, Part 1.

I would like to share some of the choices we’ve made at our emerging practice. Wow, was it a candy store of cool programs to select from when we first encountered the marketplace! There is a whole cottage industry catering to RIAs out there, and enticing product features abound. It would have been very easy to rack up a large monthly technology overhead outfitting ourselves with everything, but we instead made it our philosophy to:

1. Spend only as much as we really must.
2. Spend enough to get good value.
3. Choose systems we can grow into and stick with for a long time.

The result was that we chose Redtail Technology for CRM, MoneyGuidePro for planning software, and Shareholders Service Group Inc. for our custodian.

Here’s why:

Redtail has a simple user interface, hosts e-mail, can archive all our docs in the cloud, and integrates with MoneyGuidePro, Mailchimp, and our custodian’s Black Diamond and Netx360 software packages. We felt this would allow for a centralized repository for each client, one that continuously updates itself across systems via the integration. These services also require only a monthly commitment, and offer accessibility across mobile, Windows and Mac platforms.

None of this is breaking the bank for us, either. We feel we could have gotten away with cobbling together some freeware to accomplish the same goals, given enough time. That option, however, would have left us with zero customer service, and these great products we are using were designed with RIAs in mind. We have been quite happy so far.

We have also been delighted with Shareholders Service Group Inc. as our custodian. The staff rolled out the red carpet for us despite our minimal assets under management. It is not unusual to have the firm’s executives answer the customer service line, which makes us feel like we are valued. They are aggressive with technology and provide good partner pricing with programs like Black Diamond. That particular partner relationship, in fact, was a key factor in our choosing SSG. See: Several hundred small RIAs gain access to Black Diamond software at reduced rates.

Paperless, mobile and on the cloud

We are paperless, and so have adopted digital social media as a key part of our marketing effort. Nobody yet knows if social media will live up to its promise, but we are betting that it will. What does that mean? It means we are utilizing LinkedIn at a premium subscription level to search out friends of friends in local industry. It means we are generating original content at our blog and circulating it to our connections on Facebook and LinkedIn, while archiving all with Cloud Preservation. We are posting and sharing good articles as we see them to Twitter, too. See: Top 10 tips for the 'social’ financial professional when creating your LinkedIn profile.

Our aim is to establish ourselves as a knowledge authority and hopefully to educate future clients at the same time. Here are just a few good technology apps we have found which enhance our efforts: See: Top 10 ways financial advisers can 'market smarter’ — and enjoy it more in 2012.

Buffer is a great plug-in, which simplifies and schedules our outgoing tweets, and it provides analytics. Think about those times you might have caught up on Twitter over the weekend and wanted to forward news articles or retweet a bunch of things, but not all at once. Buffer puts them in queue to sequence out later, shortening URL hyperlinks for you in the process.

Dudamobile came to our attention under the Google GoMo (Go Mobile) promotion. It makes a truly mobile phone friendly version of your website based on your regular site, literally in minutes. Google will pay your monthly charge for the first year.

Go Nitro

We’ve become big fans of Nitro PDF, an upstart challenger to Adobe. Nitro offers a PDF reader, some very affordable editor software, and its new nitrodocs.com promises to be a free alternative to docusign or echosign for e-signatures. We have used the Nitro Pro editor to create customer presentations wherein we combine multiple documents. We can then add text and graphics, remove pages that don’t belong, password protect the PDF and send it along to clients. See: RIAs in the catbird seat to leverage straight through processing in 2012.

Finally, for non-client-related business, we work Google docs as a shared drive and utilize Evernote to clip good articles off the web and take immediate notes about networking contacts as we meet them. Once inside Evernote, these tidbits can be searched, e-mailed, shared, or simply stored for later reference.

There is a fine line between feeling that technology will replace you and feeling that it will empower you to provide more for your clients more affordably. We are in the second camp right now, and are definitely grateful to be here.

Lyman Howard works as half of the team at Point Bonita Wealth Advisors LLC of San Francisco. He is a Bay Area native and lives there with his family. Following eight years in the Navy and 12 as an institutional bond broker, he shifted gears and partnered with a lifelong friend to start a state-registered advisory firm. He would probably tell you that blogging is one of the more enjoyable parts of the job.

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See more related moves

Mentioned in this article:

Financial Planning Software
Top Executive: Bob Curtis

Redtail Technology
CRM Software
Top Executive: Brian McLaughlin

Shareholders Service Group
Asset Custodian
Top Executive: Peter Mangan

Sheryl Rowling, CEO

Sheryl Rowling, CEO

February 14, 2013 — 1:43 AM

Great article Lyman! You might also want to take a look at Total Rebalance Expert for rebalancing/portfolio management. SSG has a great negotiated deal with TRX for its advisors and our Black Diamond integration is seamless.

Cornell Fields

Cornell Fields

February 28, 2019 — 12:19 AM
Good day, Thanks for providing some insight about your selection process. Are you using Next360 or MGP as the client portable/interface?

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