As advisory firms seek increased operational and cost efficiencies, many wealth technology providers with on-premise, desktop platforms have extended them to cloud applications in recent years. A strong preference towards low-impact, small footprint cloud-based or software-as-a-service (SaaS) solutions is understandable. Throughout the pandemic, the importance of supporting remote workforces elevated acceptance and adoption of cloud solutions.
However, the success of cloud initiatives in the wealth management industry has varied significantly. Some cloud-native providers have closed shop while others faced significant challenges with their cloud rollouts and migrations. How can RIAs and wealth managers reduce migration risk and ensure a future-fit path to the cloud? We see four main qualities emerging from providers with the most effective cloud initiatives.
1. Clear Strategy & Roadmap
Providers that rushed to expand their offerings to the cloud experienced more challenges than those that were more strategic and methodical with their rollouts. Solutions that are best-in-class, feature-rich, and highly advanced with many integrations should take a proportional and strategic approach to rearchitect certain functions for the cloud to achieve maximum performance, reliability and scalability.
When considering a cloud edition, it is crucial to have a clear understanding of the provider’s strategy and roadmap for all of its solutions. For example, is there common code across the cloud and desktop versions, including integrations? If the answer is yes, then that means greater efficiency for ongoing development through both models. This gives firms more choice in delivery as they grow and evolve.
2. High Level of Parity
An initial cloud expansion should provide a majority of its original desktop version’s capabilities, workflows and integrations. That high level of parity should not only be present in the near term; it should be a long-term commitment.
Once a technology provider launches a cloud version, it is not unusual for development efforts to diverge favoring one model over the other (usually the cloud version), causing long-term disparity and problems down the road. While cloud is now gaining more widespread adoption in the wealth management industry, a provider’s solution strategy should also account for potential change down the road as firms grow organically or through mergers and acquisitions.
For example, a firm with $500 million in AUM may change its infrastructure policy that may not necessarily favor the cloud should it merge with other firms to become a $5 billion firm, or a new parent company may impose its own. Therefore, advancing both the desktop and cloud versions of the platform in tandem allows firms to shift seamlessly with their IT strategy while continuing to offer choice in delivery model.