Portals - Now is the Time!
What are portals, and why are they one of the hottest technologies in client service? While several definitions apply, to me a portal is a secure web site where clients can store, access and retrieve business content. That content may be produced by the client, the client’s advisors or business systems such as brokerage firms and accounting systems.
Aggregation, or assembling related data from multiple sources, is another way to describe a portal. The portal may contain analytic tools as well as content and may be accessed by authorized advisors such as bankers, attorneys, doctors, insurance agents and financial planners. By controlling the portal, advisors position themselves in the pilot’s seat when it comes to delivering financial services. Other advisors may find a place in first class, but many will fly coach. What seat on the plane do you desire—pilot, first class or coach?
For the past two years I have heard firms talk about portals, but few have implemented them or developed an economic model that makes sense. Let’s first address economic models because these provide the framework that most accountants use to think. Portals can and will drive costs down as a service model because they offer a secure self service environment, eliminate duplicate data entries and improve integration among tax, accounting and practice management applications.
The second is a revenue generation model where a client pays an annual fee for the use of a high-powered, electronic safe deposit box. Many financial planners are charging clients $1,000 or more annually to access information on eMoneyAdvisor, and clients love having personal portals with aggregated content that is accessible 24 hours a day and 7 days a week.
Another big advantage of a portal is security. Unfortunately, many firms still email financial information in portable document format (PDF) or even in MS Office applications. Portals are more secure than emails containing unencrypted attachments. They are also capable of controlling document versions and check-in/out requests.
Intuit was first into the business in 1999, but soon got out of it. Now major vendors like CCH and Thomson Tax and Accounting focus not only client portals, but integrating their core applications into portals (i.e. tax, payroll, write-up, document management, etc.) Creative Solutions (TTA) is currently the leader with integrated applications.
Historically, tax has driven new technology initiatives, and portals seem to be following the same pattern. This past year CSI saw significant growth in two areas: virtual office and portals. Small and large firms are moving from the client server environment to the web for the following reasons:
- Total cost of ownership
- Accessibility and centralized file storage
- Ability to work on client information from any location and at any time (sharing of staff among offices)
- Security and business continuation
- Reduced need for internal IT expertise (engineering, communications, project management, software updates and etc.)
- Ease of entry for small and large firms
- Improved integration of applications and sharing of common data
Yes, you are starting to see a trend develop. One of the risks many firms have is that their IT strategies are a departmental rather than an enterprise vision. Until recently, what was good for tax was not always the best solution for audit. From my perspective, the larger the firm, the less concerned it is about integration of applications and consistency among departments. In the future, firms should think of webtops, rather than desktop machines where the entire network is centrally managed from a secure location. Tax updates and backups are the responsibility of the vendor rather than the firm’s network administrator. Firms, clients and software vendors can work in an alliance to better meet the needs of all parties.
Firms should be developing a web strategy that includes a vision statement and strategic objectives. This should be an integral part of their technology plans. If firms don’t spend time thinking and planning the transition from the client server model to a hosted webtop environment, they will spend more time and money than necessary. This time, adoption of a new technology may not be as kind as it has been in the past to late adopters.
The lack of quality personnel (accounting and technology), coupled with increased demand for higher value services will distance early adopters from late adopters. The early adopters will win, simply because of the strategic advantages they will have over competitive firms (strategic planning, improved utilization of people, and improved processes). Many of the client server applications lack integration, accessibility and speed in a remote processing environment.
Most of the resistance I hear is not from clients but from firm partners who simply do not want to change for fear the unknown. They tend to make statements like:
- “Portals aren’t secure.”
- “My clients don’t use the Internet.”
- “Clients aren’t asking for portals.”
- “What is a portal?”
Now is the time for firms to learn how portals will benefit their clients and the firm. The big risk is that other financial professionals are already getting into the act (i.e. financial planners), and if firms don’t become aggressive, clients will store their data on a portal provided by a financial planner, bank or insurance company. The security and improvements in client service are enough to justify the time spent in researching this technology. Put it on your list for immediately after the busy season.
