RIA Compliance and Practice Management Blog

Top CRM Software for RIA Firms: Redtail, Salesforce, and the rest

Posted by RIA in a Box

Jul 31, 2018 8:57:44 AM

CRM Software reviews for RIA FirmsThe findings in this blog post come from our annual survey of over 1,500 registered investment adviser ("RIA") firms that was conducted in the first quarter of 2018. This proprietary RIA in a Box study is paired with publicly accessible data provided by the Securities and Exchange Commission ("SEC"). The goal of our annual study is to understand different options that comprise each firm characteristic, and to determine whether specific characteristics affect the growth, size, or operational efficiency of an RIA firm. In this blog post, we focus on the top customer relationship management ("CRM") systems used by RIA firms

Download our 2018 RIA Technology Landscape Infographic

RIA Adoption Rate of CRM Systems

In our 2017 technology survey, CRM systems were the most popular type of technology adopted with 46% of firms using a CRM system. Like many technology solutions utilized by investment advisers, CRM systems generally show higher adoption rates as a firm's regulatory assets under management ("AUM") increases. 

In particular, firms with $100 million or more in AUM are the most likely to adopt a CRM system. While on the other hand, firms with less than $5 million in AUM are the least likely to purchase a customer relationship management system. Close to 70% of firms with $100 million or more in AUM currently utilize a CRM system compared to around 25% of firms with less than $5 million in AUM. In more recent years, we have seen adoption slightly increase for larger advisory firms while actually decrease slightly for smaller firms.

CRM adoption by RIA firm size

Over the past four years of our survey, overall RIA industry CRM adoption has remained relatively steady. Given the steady flow of new, smaller investment advisory firms entering the industry each year, we suspect that the adoption rate will continue to hold steady in the near future as well. Looking forward, we anticipate that larger firms will continue to adopt CRM systems at higher adoption rates but this increase in adoption will be offset by new firms entering the industry that may be less likely to adopt such a system on day one.

CRM Adoption Year Over Year for RIA Firms

Top CRM System Adopted by RIA Firms

Although CRM adoption rates and correlations with total assets under management have remained consistent over the years, the ecosystem of systems available to investment advisers has continued to evolve. Since the last time we discussed top RIA CRM vendors in 2014, many legacy, non-cloud-based solutions have declined in popularity. However, much like in 2014, two investment adviser CRM solutions have continued to distance themselves from the competition: Redtail and Salesforce.

With the recent acquisition of Junxure by AdvisorEngine, the number of financial advisor vertical-focused solutions is relatively limited. As such, small and mid-size firms looking for an RIA-centric CRM solution have continued to select Redtail at an increasing rate. However, WealthBox is an emerging player that has seen growing adoption at the smaller end of the market.

For larger investment adviser firms, we have seen Salesforce distance itself from more traditional, industry agnostic CRM vendors such as Microsoft Dynamics and Zoho that have looked to serve the financial advisor industry. In particular, we have observed Salesforce gaining significant adoption for RIA firms with $100 million or more in AUM. Thus, while Salesforce still has relatively small market share in the industry, for larger RIA firms, we have seen it emerge as the most common CRM solution. However, it's important to note that most investment advisory firms struggle to properly implement and customize Salesforce without the assistance of a third party vendor that understands the unique CRM requirements of an investment adviser. 

Top 3 CRM software providers for RIA firms

For investment advisory firms that are successfully adopting technology, we general see such firms initially adopt a CRM system to serve as the central technology hub to integrate with other systems. A firm's CRM systems should help with marketing efforts, recording client communication, organizing tasks and processes, documenting compliance activities, and - most importantly -  should be the center of a firm's technology suite. In other words, additional software should be used to enhance a CRM system, not work alongside.

Presently, our MyRIACompliance® investment adviser compliance software platform integrates with the industry's three leading CRM vendors: Redtail, Salesforce, and Wealthbox. Details on the integrations are available here.

This post is the first of five blog post that will focus on the core technology solutions available to investment advisory firms. In the coming weeks, we will further explore financial planning software, portfolio management / reporting solutions, document storage, and portfolio risk management software.

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Topics: RIA Operations, RIA Technology

RIA in a Box LLC is not a law firm, investment advisory firm, or CPA firm. RIA in a Box LLC does not provide legal advice or opinions to any party or client. You should always consult your relevant regulatory authorities or legal counsel if applicable.

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