Wealth Tech Demystified Part 5: Fee And Billing Software – Barron’s

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Lets face it: getting paid on time for your work as a financial advisor is important, especially during this pandemic as businesses are doing everything they can to keep the lights on.

This has made a financial advisors fee and billing software all the more important. But when searching for the right fee and billing software program, it can be hard to decipher what the company is selling, and whether it makes sense for your advisory firm.

Ive run my own wealth management marketing firm for the past 12 years, which means I recognize the necessity of pushing past the jargon and using the information available to make the right decision for your firm.

With this in mind, Ive written this article, which is the fifth in my series on demystifying wealth technology. Make sure to read parts one through four of the series: onboarding, portfolio management, trading solutions, and financial planning software.

Fee and billing software is used by advisors to charge clients directly for their services. As financial advisors move toward offering more financial planning services, some are also moving away from the traditional fee model, which is based on assets under management. Instead, they charge fees for service.

With this in mind, heres what to consider when choosing fee and billing software for your advisory firm:

-- If youre using a fee-for-service model, check to see whether the software provider has measures in place to handle RIA compliance. A 2013 Risk Alert from the Securities and Exchange Commission shows that if an advisor has access to a clients online accounts, they can be subject to the custody rule. Some software providers have provisions in place to get around this, which saves advisors from extra audit costs.

-- Conversely, if youre using an AUM model, consider whether there are options for excluding certain assets, contributions, or withdrawals from fee calculations. Consider whether you need this level of customization at your practice and whether its worth paying for.

-- Look at any other customization options available. Some providers offer the option to personalize invoices or to make fee adjustments to invoices the program generates.

-- Check to see what level of billing flexibility is available. Does the program have the ability to bill in both arrears and in advance?

-- Ask about whether eSignatures are available. This can reduce paperwork for both you and your clients.

-- Similarly, check to see if a client portal is available. This allows your clients to upload and change their payment information, confirm charges, and stay on top of invoices without you notifying them about every charge.

-- Look at whether the software program allows you to put a payment plan on hold. This is especially important now, because clients may consider pausing their financial planning services as they cut costs.

-- Consider the fee reporting and management analytics available through the software program. These not only are helpful for your clients, but can also help you to make business projections.

Selecting the right fee and billing software program doesnt have to be hard. Just make sure to keep these questions and considerations in mind to avoid getting caught up in marketing lingo.

Stay tuned for the next installment of this series, which will cover performance and reporting software.

April Rudin is founder and CEO of The Rudin Group, a marketing firm focused on the wealth management industry.

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Wealth Tech Demystified Part 5: Fee And Billing Software - Barron's

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