Despite improvements made in customer relationship management (CRM) systems, financial advisors and others in the wealth management industry remain dissatisfied with their CRMs, according to the findings of F2 Strategy’s “Benchmark Report: Wealth Management’s Satisfaction with CRMs.”
F2 said its 2022 CRM research study “revealed the industry’s deep dissatisfaction with CRMs.”
Due to the importance of this tool to firms’ everyday operations, F2 said that it conducted new research to benchmark how wealth management firms see their CRMs now.
“Perhaps the most eye-opening trend to emerge from the data was the large drop in the amount of firms tracking wallet share in just two years.”
– F2 Strategy report
“Perhaps the most eye-opening trend to emerge from the data was the large drop in the amount of firms tracking wallet share in just two years,” according to the report. “Not using available capabilities to monitor business development activities could be one of the reasons why the industry’s average organic growth rate has also dropped. It means that wealth management firms are not leveraging their CRM and data to their full potential and are missing opportunities to grow.”
CRMs are crucial to operational efficiency and business growth, according to F2.
“To bridge the gap between firms’ expectations and the tool’s reality, it is crucial to allocate resources for CRM configuration, customization, and day-to-day maintenance,” the report said.
Although all wealth management firms have not yet made such a commitment, F2 says it is a “critical element for building a tool that drives operational efficiency and ensures strong organic growth, providing reassurance about the tool’s effectiveness.”
The report focused on five trends the research uncovered:
1. Wealth management firms’ CRM satisfaction increased. The percentage of firms searching for a new CRM decreased from 18% in 2020 to 6% in 2024, but the reasons why weren’t clear, the report said.
Most firms in the sector use Salesforce CRM services and have difficulty building workflows, which typically require skills beyond their in-house resources. This creates a need for more resources to make Salesforce function according to expectations.
Firms that hire skilled professionals to manage their CRM systems consistently experience greater success. F2 recommended that firms spend time on data because CRMs “can only be as good as what goes into them.”
2. CRM satisfaction remains “stubbornly” low, according to F2. Since 2020, integration issues decreased slightly, but frustration with customization and workflows grew, the report said.
CRM satisfaction remains “stubbornly” low, according to F2.
F2 recommended that firms “balance the art of the possible with out-of-the-box solutions and determine the right amount of investment to achieve satisfaction.”
3. More integrations are resulting in higher overall CRM satisfaction, according to the report.
The survey revealed two major areas for integration: operational efficiency and organic growth. “To stay focused, it’s important to develop a comprehensive technology strategy and outline ideal client and advisor workflows,” it said. “Keep in mind that operational integrations enhance efficiency, while marketing integrations drive growth.”
4. Wealth management firms want custodian workflow integration, according to the report.
Firms want to use the same onboarding process for all custodians. But F2 predicted: “Single workflow for all custodians isn’t likely to come true. Custodians are not a pass-through service. From a regulation standpoint, they must have a level of ownership of the clients that impedes automation. In addition, there is no incentive for custodians to collaborate and create a single industry process.”
Firms also expressed concerns about reduction of Not in Good Order documentation (NIGOs), as well as managing Reg BI and Know Your Customer (KYC) compliance more effectively, the report noted.
5. Wallet share tracking decreased 18% in two years, according to the report.
This trend “underscores the fact that the industry is not focused on things that lead to expanded growth, such as client touch points, quality of touchpoints, specific event reminders, wallet share, and client experience,” the report said. “You can always automate the next thing; it’s time to do the hard thinking about the client journey and experience.”
Data in the F2 report was taken from a survey it conducted in June, the firm said. The survey included responses from 66 RIAs, wealth management firms and broker-dealers representing $6.4 trillion in total client assets.
Jeff Berman, Contributing Editor and Reporter at Wealth Solutions Report, can be reached at jberman@wealthsolutionsreport.com.
