There are many software solutions on the market that are suitable for wealth managers. This confronts decision-makers with a major challenge in making the right choice. Some wealth managers mainly invest in liquid assets for their clients and will choose a different solution than the one with clients that have a complex asset ownership structure and many illiquid assets.

In contrast, the market for software solutions and platforms is fragmented. A broad statement regarding the solutions can only be made with regard to the range of functions and the useability. New providers on the market offer something compelling because they have simple and clear navigation. However, they often lack the required range of functionality. Established providers, meanwhile, often struggle with the opposite problem. They have a broad and deep range of features. However, navigation often suffers because the system has grown over time.

Although tempting to choose software solutions or platforms based on recommendations, this is akin to buying a new shoe. The foot must fit the shoe and vice versa. Software solutions and platforms are as diverse as the differing needs of wealth managers. Thus, a process is required in which the right shoe is found for your foot.

There is no way around a Request for Proposal (RfP)
Firstly it is key to draw up a requirement specification. Here it helps to document parts of the existing process environment or/and possible functions of an existing system accordingly in the RfP as mandatory or optional requirements.

Once you have created the specifications, you can send the document to a number of vendors in the form of a Request for Proposal. Here a good tip is to ask for the responses to be answered directly in the RfP. This allows a better comparison of the answers of the different providers once you received their feedback.

Selection process
Choosing the software solution or a platform comes next. Obviously, this is an important decision that influences the efficiency, the quality, the cost structure - and to a certain extent also, employee satisfaction.

It is worthwhile to invest time in the selection process; visit the software vendor on-site and get a feeling for the team, the ethos, and better assess the company

And again, once a software solution has been chosen, do not rush into contract negotiations and start implementing the solution as quickly as possible. At this point, it is best to pause and first perform a detailed gap analysis.

This process can take weeks to several months. Here, the exact functional scope is examined together with specialists from the provider and no longer with the sales department. As soon as this phase has been completed, the final price negotiation can be conducted and implementation begins.

Implementation
If you are replacing an existing system as part of the implementation, you are inevitably faced with data migration. This project phase should be given due attention and sufficiently staffed.

If there is no data migration, the implementation can be done in a few months. But any project that also includes data migration, will likely take between 6 and 12 months.

Once you have the new system in place, the new processes must settle in. This can take several weeks to months.

Even if you perform an accurate gap analysis, there is still a chance that you will encounter challenges that you missed or could not detect. Therefore, it is advisable to allow sufficient time for the project. In addition, it is important to keep in mind that in existing organizations, the day-to-day business of the project still needs to be managed. This double burden must be taken into account in the planning for the implementation.

It is also worth discussing the project with the existing provider. Especially in the event of a project delay, it may suddenly become necessary to rely on the previous provider's support. Here it is important that one is not suddenly in a situation without a software/service agreement and thus for a certain time without a system. The existing provider also has a key role to play in the migration process. It is often worth double-checking the existing contract to verify how the support for data migration to a different system is defined.

Throughout the preliminary project, it is important to involve the team in the process. At the latest during implementation, you must rely on their support. If you force a system on a team, this can often lead to major problems during implementation. These hurdles sometimes lead to project abortion, for example, because the team wants to stick with the existing system and/or is not convinced by the new system because they were not sufficiently involved in the selection process.

External support
Depending on the size of the wealth manager and its internal experience, it may be worthwhile calling in external support for the selection process and, if necessary, also for project management. This inevitably leads to additional and direct costs. However, it can save you from unpleasant surprises if you have the experience of a proven specialist at your side.

Summary
Changing systems, or the process when choosing a solution for the first time, is not a simple undertaking for any company. Allow sufficient time for this process. Do not be rushed by the various vendors. You set the pace. In addition, include the team in the decision-making process. During implementation, the support and buy-in of the team is particularly important and a key success factor for any project.

This article was part of The Wealth Mosaic's Swiss WealthTech Landscape Report (2021). Access the full report here.