Lifewealth's Jason Harwood (Images: TS)

API technology is opening up the back offices of financial advice firms that are willing to get on the front edge of digital disruption, according to Jason Harwood, the chief executive of Melbourne based financial services provider Lifewealth.

Presenting at the Institute of Managed Account Professionals Investtech forum in Sydney, Harwood explained how his firm of 30 staff partnered with a startup to create their own customer relationship management tool, which they patch into other systems like Class and Xero.

By eschewing typical CRM providers like Salesforce and Xplan and gaining their technology independence, Harwood says they won the ability to switch systems at will, which means providers are held to account much more tightly. If they’re not up to scratch, automatic programming interface capabilities – which also power ‘open banking’ – allow them to transfer clients to an alternative provider quickly and easily.

“This system is effectively just a whole heap of APIs burrowing into one bit of software,” Harwood told Professional Planner. “If we wanted to switch from Class to BGL, for example, we could do it in an hour.”

Harwood reckons self-built CRMs are part of a trend towards the democratisation of technology.

“It’s all becoming democratised now, with firms at the centre,” he said. “You’re able to say to a provider, ‘you know what, you’re not delivering’, so it makes them more accountable.

Harwood said creating the tool cost “25 to 40 grand,” with ongoing annual costs of approximately $15,000. The CRM is called Dexterous, which is also the name of the startup they worked with to create the software.

“Whilst we created a system for ourselves it was absolutely their technology,” he said. “We didn’t have to do a monumental amount of work to convert it to what we needed, we just had to say: ‘This is what a workflow looks like in financial planning and we want to do these things’.”

He revealed Lifewealth looked at traditional CRMs but shied away from the fixed nature of the systems. Where the option of building out the system presented itself, they found a significant cost was usually attached. While he respects what Salesforce, for example, can do, Harwood laments the cost of customisation on the platform.

“It sounds absolutely fantastic, but we started getting down to not wanting this particular process as it was built and wanting to change it to something else. But it’s like, ‘OK, no problem, that’s going to cost you’,” Harwood said.

He acknowledged that technology initiatives aren’t easy or cheap to manifest, especially for small financial services firms that don’t have the resources to lead them. But if you’re prepared to embrace change, he said, the benefits can be tremendous.

“I actually think there’s a really exciting time coming if your prepared to make the call,” he added.

Tahn Sharpe is a Sydney-based financial services journalist with a background in financial planning. He writes on advice, superannuation, investment, banking and insurance issues, is a certified SMSF Adviser and holds an Advanced Diploma of Financial Planning. Contact at [email protected]
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