David Park Cuts IT Costs by 20% with Strategic Technology Audit

David Park Cuts IT Costs by 20% with Strategic Technology Audit

Executive Summary

Summit Capital Partners, a growing RIA managing over $150 million in assets, suspected its technology infrastructure was bloated and inefficient, hindering profitability. Golden Door Asset conducted a comprehensive technology audit, identifying redundant software and underutilized licenses. By streamlining their tech stack and migrating to cost-effective cloud-based solutions, Summit Capital Partners reduced IT costs by 20%, saving $30,000 annually and improving overall system performance by 15%.

The Challenge

David Park, Managing Partner at Summit Capital Partners, felt increasingly burdened by the escalating costs associated with their firm's technology. While Summit Capital Partners had experienced significant growth over the past five years, adding two new advisors and increasing assets under management (AUM) by 60%, their technology infrastructure hadn’t been systematically reviewed.

“We were throwing money at software, assuming it was all necessary," Park explained. "We had multiple overlapping CRM systems, portfolio management tools with redundant features, and a hodgepodge of subscription services that no one was actively managing."

Specifically, Summit Capital Partners was facing the following challenges:

• Duplicated Software: The firm was paying for two separate CRM systems (Salesforce and HubSpot) used by different teams, resulting in an annual expenditure of $12,000 for essentially the same functionality.
• Underutilized Licenses: A significant number of licenses for portfolio management software (e.g., Black Diamond, Orion) were only partially utilized, representing an estimated $8,000 in wasted annual spending. Some advisors preferred spreadsheets, leading to inaccuracies and compliance risks.
• Inefficient Workflow: The lack of seamless integration between different software platforms created bottlenecks in the client onboarding process. Data entry was often manual and time-consuming, leading to increased operational overhead. For example, advisors were spending an average of 4 hours per week manually updating client information across different systems, costing the firm approximately $6,000 annually in lost productivity per advisor.
• Lack of Strategic Oversight: There was no clear technology roadmap or strategy to guide future investments. Technology decisions were made on an ad-hoc basis, without considering the overall impact on the firm’s efficiency and profitability.
• High IT Support Costs: The complex and fragmented technology environment required significant IT support, costing the firm approximately $4,000 annually in external support fees for troubleshooting and maintenance.

These inefficiencies were not only impacting the bottom line but also hindering the firm's ability to scale and provide exceptional client service. David Park recognized the need for a strategic technology audit to identify areas for improvement and optimize the firm’s technology infrastructure for long-term success. He also worried about potential compliance issues related to data security and privacy, given the complexity of their systems. The increasing threat of cybersecurity breaches was a constant concern.

The Approach

Golden Door Asset adopted a phased approach to address Summit Capital Partners' technology challenges, ensuring minimal disruption to their daily operations:

Phase 1: Discovery and Assessment:

• Data Collection: We began by gathering comprehensive data on Summit Capital Partners' existing technology infrastructure. This involved interviewing key stakeholders (advisors, operations staff, compliance officers), reviewing software licenses and contracts, and analyzing system usage patterns. We used surveys, questionnaires, and direct system access to collect detailed information on all software applications, hardware devices, and IT services.
• Needs Analysis: We conducted a thorough needs analysis to understand the specific requirements of each team and department. This helped us identify pain points, workflow bottlenecks, and areas where technology could be better leveraged to improve efficiency. We assessed whether current tools were meeting actual needs, or if alternatives could provide better functionality at a lower cost.
• Security and Compliance Review: A key component of the audit was a review of Summit Capital Partners’ cybersecurity posture and compliance with relevant regulations (e.g., SEC guidelines, GDPR, CCPA). We evaluated their data security protocols, access controls, and disaster recovery plans to identify potential vulnerabilities.

Phase 2: Analysis and Recommendations:

• Cost Analysis: We conducted a detailed cost analysis to identify areas where Summit Capital Partners was overspending on technology. This included a review of software licensing fees, subscription costs, hardware maintenance expenses, and IT support costs. We compared their spending to industry benchmarks to identify potential savings opportunities.
• Technology Optimization: Based on our findings, we developed a customized technology optimization plan that outlined specific recommendations for improving efficiency, reducing costs, and enhancing security. This included consolidating software platforms, eliminating redundant tools, migrating to cloud-based solutions, and implementing automation to streamline workflows.
• Prioritization and Phasing: We worked closely with David Park to prioritize the recommendations and develop a phased implementation plan. This ensured that the most impactful changes were implemented first and that the firm had adequate time to adapt to the new technology environment. We created a detailed project timeline with specific milestones and deliverables.

Phase 3: Implementation and Support:

• Implementation Assistance: Golden Door Asset provided ongoing support to Summit Capital Partners throughout the implementation process. This included assisting with software migrations, system integrations, and user training. We also helped them negotiate better pricing with vendors and secure discounts on new software licenses.
• Monitoring and Evaluation: We continuously monitored the performance of the new technology infrastructure and evaluated its impact on the firm's efficiency and profitability. We provided regular reports to David Park on key metrics, such as cost savings, productivity gains, and client satisfaction.

Technical Implementation

The technical implementation involved a combination of software consolidation, cloud migration, and workflow automation. Here's a breakdown of the key changes:

• CRM Consolidation: We recommended consolidating the two CRM systems (Salesforce and HubSpot) into a single, unified platform – Wealthbox. Wealthbox offered the necessary functionality for both sales and marketing teams at a significantly lower cost. This involved migrating data from both existing systems into Wealthbox, configuring workflows, and training users on the new platform. This reduced CRM costs by $7,000 annually.
• Portfolio Management Optimization: We identified that the advisors were paying for premium features in their portfolio management software (Black Diamond and Orion) that they were not utilizing. We worked with them to downgrade to a more basic version of Orion Advisor Services while still retaining access to essential features. For those advisors primarily using spreadsheets, we implemented a standardized, secure, cloud-based spreadsheet system with built-in audit trails and version control to improve accuracy and compliance. This eliminated $5,000 in underutilized licenses and improved data integrity.
• Cloud Migration: We migrated Summit Capital Partners' on-premise data storage to a secure, cloud-based solution (Microsoft Azure). This eliminated the need for expensive hardware maintenance and reduced the risk of data loss due to hardware failures. The migration was performed using Azure Migrate, ensuring minimal downtime and data integrity.
• Workflow Automation: We implemented several automation tools to streamline key workflows, such as client onboarding and compliance reporting. This included using Zapier to integrate Wealthbox with other software platforms, automating data entry and reducing manual effort. For instance, automatically populating client data from Wealthbox into DocuSign documents reduced onboarding time by 30%. We also integrated with a compliance monitoring tool to automatically flag potential regulatory violations.
• Cybersecurity Enhancements: Implemented multi-factor authentication (MFA) across all critical systems and enhanced data encryption protocols to protect sensitive client information. Conducted regular security audits and penetration testing to identify and address potential vulnerabilities. Invested in employee cybersecurity training to improve awareness and reduce the risk of phishing attacks.

Results & ROI

The strategic technology audit and optimization process delivered significant results for Summit Capital Partners:

• IT Cost Reduction: Reduced overall IT costs by 20%, resulting in an annual savings of $30,000.
• Improved System Performance: Increased system performance by 15%, measured by faster application response times and reduced system downtime.
• Enhanced Workflow Efficiency: Streamlined key workflows, such as client onboarding and compliance reporting, reducing manual effort and improving productivity. Client onboarding time decreased by 30%.
• Reduced IT Support Costs: Decreased IT support costs by 25%, as the simplified and optimized technology environment required less troubleshooting and maintenance. This saved approximately $1,000 annually.
• Improved Compliance: Strengthened data security and compliance protocols, reducing the risk of regulatory violations and protecting sensitive client information. The new system allows for improved audit trails and easier reporting.
• Advisor Productivity: Advisors regained an average of 2 hours per week due to streamlined processes, leading to more time spent on client relationships and new business development. This translated to an estimated $10,000 per advisor in increased revenue potential annually.
• Tangible Savings Breakdown:
  • CRM Consolidation: $7,000 annual savings
  • Portfolio Management Optimization: $5,000 annual savings
  • Reduced IT Support: $1,000 annual savings
  • Cloud Migration (Hardware/Maintenance): $7,000 annual savings
  • Workflow Automation Efficiency Gains (Estimated Value): $10,000 annual savings

The ROI far exceeded expectations, providing Summit Capital Partners with a more efficient, secure, and cost-effective technology infrastructure.

Key Takeaways

Here are some key takeaways for other Registered Investment Advisors (RIAs) and wealth managers:

1. Regular Technology Audits Are Essential: Don't assume your technology infrastructure is optimized. Conduct regular audits (at least annually) to identify areas for improvement and ensure you're getting the most value from your investments.
2. Consolidate and Simplify: Eliminate redundant software and consolidate platforms where possible. This reduces costs, simplifies workflows, and improves data consistency.
3. Embrace Cloud-Based Solutions: Cloud-based solutions offer numerous benefits, including scalability, flexibility, and cost savings. Consider migrating your data and applications to the cloud to reduce hardware maintenance costs and improve accessibility.
4. Automate Key Workflows: Automate manual tasks to free up your team's time and improve efficiency. This can include automating client onboarding, compliance reporting, and data entry.
5. Prioritize Cybersecurity: Invest in robust cybersecurity measures to protect sensitive client information and comply with regulatory requirements. This includes implementing multi-factor authentication, encrypting data, and providing employee cybersecurity training.

About Golden Door Asset

Golden Door Asset builds AI-powered intelligence tools for RIAs. Our platform helps advisors uncover actionable insights from client data, personalize investment strategies at scale, and automate compliance tasks. Visit our tools to see how we can help your practice.