How to choose a back office system

For Mark Trousdale, chief growth officer at InvestCloud, which provides financial digital solutions, the “ideal digital platform” is one that integrates with front, middle and back office applications seamlessly. 

“Even where applications are separate, data needs to be able to flow seamlessly between systems,” Mr Trousdale adds.

“Data is continually captured across all steps of the client lifecycle – from risk profiling, goal setting, and advice delivery to implementation, valuation, performance and reporting, to name a few.”

James Tucker, chief executive of Twenty7Tec, suggests the “ideal combination” is a platform built using modern, cloud-based open architecture, with a strong track record of delivering rollouts to new customers and with secure data storage.

Financial advisers will know that finding a system that meets these requirements is often easier said than done - particularly as the process of migrating to a new system is often fraught with difficulty.

Nonetheless, those that stand still will ultimately find themselves left behind. 

Pace of change

Security and storage should be top priorities, says Yusuf Yeganeh, managing director of managed services provider Microbyte Solutions.

“You know it is a good system when the bulk of your company time is with your clients, not on back office tasks,” Mr Yeganeh says. “When back office processes end up impacting your client, that’s a red flag.” 

Mr Murphy believes the ‘best’ systems are those that regularly update.

“What sets the best apart is constant development and evolution, with some systems even bringing weekly updates,” he explains. 

The market and its challenges are not standing still, and advisers cannot afford to choose a system that cannot keep up. 

“The pace of change in the mortgage industry is only going to escalate in the coming months and years; if your system provider is still delivering quarterly, or annual updates, then you will be left behind,” says Murphy.

That pace of change also applies to regulation across the financial advice industry.

Adviser businesses have had to keep up with mounting regulation in recent years, from Mifid II to GDPR, and the Senior Managers and Certification Regime.

The right back office system should make it easier for companies to comply with their regulatory and compliance requirements.

New challenge

Mr Trousdale says that advisers perceive regulations as challenging because they require organisations to capture, maintain and quickly analyse large reams of data. 

“Mifid II is a good example: it requires the provision of complete information to investors on the validity of why certain recommendations were made at each touch point with the client,” he notes, adding that firms that have poorly integrated systems in place are still struggling with this new challenge.