A new wealth management myth for 2022: You can’t buy CLM solutions out-of-the-box

Discover why the future of Client Lifecycle Management lies in configurable OOTB software.


This is just one of 7 myths outlined in our e-book, ‘7 Myths About Client Lifecycle Management (CLM)’.

In wealth management out-of-the-box software is rarely considered a viable option. This is perhaps not surprising, in an industry which has personalisation and bespoke client service at its core. There are many drawbacks to out-of-the-box solutions that have perpetuated the myth that they cannot be used for investment management CLM.

More than a decade ago, out-of-the-box (OOTB) or off-the-shelf software packages increased in popularity, spawned initially from the need to accelerate implementation timescales, reduce risk, and find a more budget-friendly way to solve common business challenges and process issues. The hope was that these platforms would require less in-house technical expertise and maintenance effort, and that they would satisfy the majority of a firm’s client servicing requirements.

Are bespoke solutions the only way forward?

Believers of the myth think that a generic OOTB product cannot work in a space like wealth management, which has niche requirements that continually change. In the past, OOTB solutions have typically been produced by large technology vendors solving common cross-industry problems, in mass markets.

Mainstream OOTB CRM platforms like Salesforce, for example, serve the needs of all firms in all sectors but they are not designed to manage the rules, data and processes specific to wealth management. OOTB CRM platforms typically require add-ons to allow effective modelling for onboarding, digital client reviews or risk reviews, whereas you would expect these to be embedded in the architecture of a bespoke wealth management CLM. This adds complexity and leads to hidden or unexpected fees. So, in wealth management, OOTB solutions don’t generally work well for your firm.

Technology alone will not deliver enough functionality

While large technology providers may have a specialist financial services division, their expertise rarely drills down to the specific nuances of wealth management client service and regulation in specific jurisdictions. So, many wealth managers believe that OOTB solutions force them to change their way of working to fit what is considered to be a set of generic best practice CRM capabilities. They believe this is the only option. While this may work in a firm of seven advisors, who are unable to afford the kind of custom-build solutions that larger firms put in place, it won’t work for those with a wealth of ingrained, documented processes and cultural pre-requisites.

While there is a recognition that OOTB software can offer a proven, cost-effective way to enable firms to standardise operations and automate workflows quickly, the perception is that functionality gaps will arise. The solution is likely to lack important workflow features or, conversely, you will end up paying for a raft of functionality that is not relevant in wealth management – and you will never use.

The risk of believing the myth

Firms that stick to the mythical belief that OOTB CLM isn’t an option in wealth management usually end up with large, complex bespoke systems that are shrouded in professional services and require an in-house team of technical experts to update and maintain them over time. This is especially common when they attempt to mould generic software solutions to fit sector-specific requirements. Many smaller wealth and asset managers who dismiss OOTB platforms, but are unable to afford the bespoke route, remain wedded to spreadsheets and manual processes that are inefficient, siloed, lack end-to-end oversight, and pose a compliance risk. And as we have seen recently through their pandemic – they lack the agility to pivot client communications and work effectively when circumstances change, without compromising compliance.

The reality

While there is a lot of truth in the myth, the future of CLM lies in configurable OOTB software that allows nuanced modifications to processes, forms, and data, without code changes.

Increasingly, wealth managers are turning to specialist CLM platform providers with subject matter expertise in investment management (rather than technology alone). These providers have bred a new generation of configurable OOTB solutions that integrate tightly with pre-existing platforms and have investment management best practice baked in. The majority of common processes, functions and rules are incorporated into these off-the-shelf solutions, along with a slew of standard templates.

These solutions have a lower initial price point than custom solutions and are much faster to deploy. Whereas high costs and prohibitive IT resource once meant CLM solutions were only viable for enterprise-level organisations, new innovations are hitting the market and forcing smaller firms to re-evaluate the role of technology in enhancing client service and driving efficiencies.

This is an extract from our e-book: ‘7 Myths About Client Lifecycle Management (CLM)’ – updated and re-published for 2022 to dispel even more myths. It’s a must-read for any Chief Operations Officer, Head of Client Service, Head of Relationship Management, or Head of CRM/Onboarding/KYC. Download your copy now to avoid costly mistakes and discover more about modern-day Client Lifecycle Management.


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