National dealer group, MySolutions, has raised its concern that advisers are making poor business decisions because of the lure of free CRM offers.
MySolutions CEO, Kevin Smee, says that advisers intending to remain independent operators in the new regime are too focused on compliance requirements when there are also other critical commercial objectives to consider.
“Offers of free CRM systems and the fear of increasing administration requirements with the incoming licensing regime are driving some advisers to make poor business decisions,” said Smee.
“We’ve seen this type of approach before in the industry where fear of change and unknown potential costs are used to capture adviser businesses, and often the ‘free CRM’ is the bait.”
“We’ve seen this type of approach before in the industry where fear of change and unknown potential costs are used to capture adviser businesses…”
He added: “The adviser is offered what seems like a good deal; a compliant system of data management at a reduced rate, so they save money on back office costs and reduce their compliance risk and get a more efficient business theoretically.”
But he warned that advisers need to consider who controls their data if they embrace these offerings and what implications ownership over the data could have if they wish to sell their advice business in the future.
“Independent ownership always comes at a cost,” said Smee. “You have to be prepared to invest in your own systems and control your own intellectual property – which is what your CRM is. Our advice is don’t let third parties own or control your data if you want to control the future value of your practice.”
He urged advisers to ask themselves whether anything is ever really free?
“If we know one thing from the digital world it is this; when the software is free then YOU are the product being sold,” he cautioned.