CRM for Financial Advisors Complying with Security Regulations

Client relationships rank among a financial advisor’s greatest assets, along with curiosity, trustworthiness, a passion for finance, and resourcefulness. To earn and maintain trust, advisors need to be responsive, proactive, and engaged. Investing in a modern CRM application is crucial for wealth managers looking to grow their practice and their client roster. 

The digital age has generated many opportunities for investment consultants. Technology provides advantages like streamlining information storage, collaboration, and communication. Yet success requires client focus and commitment, which leaves little time to set up and optimize technology like CRM. 

Need proof?  

The Financial Advisor’s Association of Canada (ADVOCIS) is a licensing, advocacy, and regulatory organization with over 17,000 voluntary members across its forty Canadian chapters. In early 2021, they surveyed their members on what daily activities they felt were inadequately addressed by technology in their office. 

The top technology gaps respondents mentioned were:

  • In-force business management of their clients’ money matters – 52%
  • New accounts and client onboarding – 51%
  • CRM and client notes – 49%
  • Reporting and client presentations – 45%
  • Client engagement – 40%

Can you guess the most significant obstacle that advisors cited as the obstacle which was preventing them from implementing available solutions? “Lack of awareness of solutions in the marketplace,” reported 67% of those surveyed. The other obstacles were the time required to learn new software (59%), lack of technical support (38%), and resources (37%).

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    Proven Solutions and Consulting for Financial and Wealth Management Advisors

    Many in the technology consulting and support industry might find it surprising that so many financial advisors wouldn’t be aware of the solutions to address the customer-centric activities listed above. Yet if you consider the depth of research, client interaction volume, regulatory scrutiny, and information gathering financial advisors have to manage, it isn’t that unthinkable. 

    Modern cloud-based CRM applications enable experts across the financial services industry to update their client profiles, keep secure records about their financial goals and holdings, and facilitate client onboarding.  In addition, they are less complex than many of the on-premises solutions which many financial advisors may have used in their “past lives” as institutional advisors with big banks. 

    These CRMs can automate processes like never before, such as triggering and sending compliance reminders and disclosure statements to clients, financial institutions, and the appropriate oversight agency. Automation can enable wealth managers and investment advisors to stay focused on managing their clients while keeping up with financial markets. 

    Digital transformation in financial services has evolved so that cloud-based CRM applications can automate workflows such as routing important documents for digital signatures. In addition, software upgrades, feature enhancements, and application optimization for speed and availability are often automated or managed by the application vendors. 

    Sensitive Client Data Requires Strict Cyber-Hygiene

    In 2020, Advocis’ Technology Taskforce released a Data Security report, finding that the rapid pace of regulatory compliance requirements and technology innovation is a pervasive challenge. 

    The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) oversees the financial advice and planning industry and banks, insurance companies, and money services businesses. In the United States, the Financial Regulatory Authority (FINRA) and the Securities Exchange Commission (SEC) provide similar oversight to financial advisors and institutions. 

    Common concerns about data security and regulatory compliance included: 

    • Complex regulatory and requirements from FINTRAC, FINRA, and the SEC for Anti-Money Laundering efforts and Know Your Customer (KYC) mandates
    • Payment card security requirements
    • PIPEDA data privacy
    • Phishing, malware, and ransomware attack vectors 
    • Endpoint devices and SaaS-based application security measures like Multi-Factor Authentication 

    The millions of clients in Canada and the United States who entrust their financial advisors for guidance about their financial holdings have high expectations. They expect their advisor to understand the safeguards which keep their information secure. This means advisors need to implement and use secure, highly-available customer relationship management applications which meet the strict regulatory requirements governing the financial services industry. 

    Sensitive Client Data Requires Strict Cyber-Hygiene financial advisor

    Advances in Cloud and SaaS Data Security 

    Less than ten years ago, many financial services companies opposed migrating their data due to the pervasive threats from cyber attacks on the sensitive, valuable data they were (and remain) responsible for managing. Yet SaaS and cloud vendors like Salesforce, SugarCRM, and Zendesk quickly and significantly increased their security posture, practices, and safeguards. They enable financial services advisors to configure their applications to mirror how they work in the physical world without compromising security. 

    The popularity of CRM applications in the financial services industry compelled CRM platform vendors like those listed above to implement the controls, features, and measures required to meet regulatory standards. Additional layers of authentication support fortify UserIDs and passwords, such as authentication with mobile applications like Microsoft and Google Authenticator or codes sent via instant messaging or email to the credentials holder. 

    Other data protection and encryption advances since the advent of cloud CRM applications include:

    • SSL and other bank-level encryption standards at the browser level, 
    • Multiple layers of encryption, intrusion prevention, malware protection, and data loss prevention in vendor data centers
    • Support of security measures like VPNs and user-based permissions
    • Comprehensive security and availability reporting and transparency

    SaaS and cloud vendors increased their security safeguards to protect customer data, ensure their customers retain full data ownership rights, and can comply with regulatory standards from government entities like the SEC, FINTRAC, and FINRA. 

    Summary and Next Steps

    As a financial, wealth, or investments manager or advisor, you likely contract with your clients on a monthly basis. MasterSolve’s CRM success program, MasterPlan offers unlimited CRM administration support, training, and guidance for a fixed monthly fee. We constantly strive to ensure our clients can focus on their customers, and not preoccupy themselves with the day-to-day “care and feeding” of their CRM platform.  

    To learn more about MasterSolve’s MasterPlan advisory services for CRM and how we can help you select, acquire, implement, secure, and run a CRM platform that best suits your unique requirements, visit our website.

    Is your organization ready to implement a new CRM?