Canoe Thought Starter: The Long-Term Effect of Hands-On Planning & Preparation
Canoe Thought Starters is a blog series that explores timely topics for single-family offices, multi-family offices, registered investment advisors, and private banks. Designed as thought exercises to drive conversations within your firm, these discussions are inspired by our recent interactions with clients, prospects, and influencers in the industry. This month, we are wrapping up our change management series by discussing the impact of effective planning and preparation on the long-term success of new technology adoption.
Introduction
In the third and final part of our series on change management, we’re discussing how approaches similar to Canoe’s can have a positive long-term effect on the client beyond the initial implementation. If you missed the first and second parts, you can find them linked here. In the first, we discussed the principles of change management and how they influence Canoe’s approach. In the second, we walk through what that implementation process actually looks like, including quotes from a client’s direct experience with Canoe.
Financial Planning’s 2022 tech survey reported that a majority of advisors, 68 percent, placed more budgetary emphasis on tech than other business priorities in the prior year; yet far less than half of those advisors surveyed were confident in those technology decisions. To further illustrate the impact of change management on long-term success, we interviewed Alia Wagenhoffer of Wealthspire. Wagenhoffer is Senior Vice President, Head of Advisory Technology, overseeing all wealth management-specific technology the firm utilizes. Having implemented Canoe Intelligence and Canoe Connect for her firm, she is intimately familiar with Canoe’s process – before, during, and after implementation – and continues to work with her relationship manager to discover more value in Wealthspire’s instance of Canoe. Throughout this thought starter, we will refer to her perspective.
Discovery
From our point of view, understanding what goes into the implementation is the first step in driving long-term success. Work with your technology provider to scope the project, resource it, define what success looks like to you, and ensure your teams are aligned. At Canoe, uncovering and validating your intended business results is a key focus in our early meetings. We first come to understand these points through the sales process, and then planning meetings focus on putting an effective procedure and timetable around achieving those goals during and after the implementation. After managing hundreds of projects, Canoe has developed a new perspective on what works.
“I would recommend asking more questions. What actually happens? What is really your definition of implementation? What will that mean to us from an experience standpoint? Doing discovery is vital to identify and align on the intended ROI,” said Tim Loughrey, Head of Client Success at Canoe.
Before Wealthspire’s Canoe implementation even started, their team had a strong sense of their ultimate goals for the project. Wagenhoffer recounts: “We were interested in Canoe to replace and streamline the manual processes that we were already doing to report on our clients’ alternatives. We were also hoping that by implementing a technology solution, it would make the whole operation more accurate as well, because when humans are involved, fat fingers can be involved. When relying on a technology solution instead, we were hopeful that the system would be more accurate and that we could be more confident in the data.”
The extent of the manual work required also limited the Wealthspire team’s ability to report as extensively as they would have liked. She remembers: “Our data operations team would receive statements and type in values and transactions for those alternatives to be able to report on them. However, outside of the alternatives that we recommended and a handful of clients’ outside alternatives, we were only really doing line-item reporting, meaning reporting simply the value of the position, not transactions, and not performance. We were hoping that Canoe would enable us to offer full transaction level and performance reporting for alternative positions, particularly to our ultra-high-net-worth Family Office Services clients in a more scalable way.”
With clearly articulated goals—data becoming more accurate, processes less manual, and new solutions to offer—Wealthspire’s partnership with Canoe made those objectives a reality.
Hands-On Approach
Just as Canoe takes a hands-on approach, we advise our clients to do the same: take control in the new relationship. Rather than following along with a passive stance, clearly state your goals for the new technology and seek validation from the vendor team that they understand how to help you accomplish them. In order to get the results you want, diligently review all scoping and implementation deliverables to confirm the new technology will help you get there. While this may seem obvious, it’s often the case that long-term success falls to the side in the excitement over new features.
The advantage behind this approach was evident to Wagenhoffer and her team: “Throughout implementation, Canoe was really a partner to us. I believe we had weekly or biweekly calls for nearly six months–just to check in, make sure everyone had what they needed, and give each other support to keep progressing the implementation.”
Even when an unexpected internal project arose, this partnership between Canoe and Wealthspire proved valuable. For the alternatives that would be included in Wealthspire’s new performance reporting, the team decided to also perform historical reconciliation. Though Wealthspire handled that project internally, the decision to undertake it arose as a result of in-depth communications about the Canoe implementation. Because Canoe’s implementation process placed such a strong emphasis on Wealthspire’s core objectives, this additional effort became a natural part of Wealthspire’s progression toward achieving its ultimate goals. The close relationship between the two teams allowed the Canoe implementation to be flexible to support Wealthspire’s need to pivot.
“In thinking about how we were going to communicate about Canoe to the rest of our advisor staff, we wanted it to be as compelling as possible. With that in mind, we didn’t want to start reporting performance from an arbitrary date, rather than from the investments’ true inception date. It didn’t feel like a full win, so we decided to build out the history, so advisors could immediately use Canoe with clients that may have outside alternatives that we haven’t been reporting on yet,” says Wagenhoffer.
Rather than treat the delay as a roadblock, both sides actually viewed this as a positive, since the workflow would make more sense in practice and help deliver even more value to the end user.
Planning Effectively to Drive Value
Designing and implementing the plan is at the core of the change management process, but the project itself is the means to the end. Too much focus on the project itself instead of the result can lead to less value derived or, ultimately, a project failure.
“We typically see stakeholders very focused on the implementation, which is effectively 10-15% of the initial contract term. In thinking about long-term success, we encourage them to also place enough consideration around ongoing ownership,” said Loughrey. “We help clients think about the technology as a new tool they’re acquiring, where taking ownership is directly tied to its success. The ownership of the investment there will really come through in the results.”
Many vendors will be focused on configuration – setting up data connections, downstream connectivity, regulatory compliance – which are all important but also only the first piece. Ultimately, you should think of the implementation as a deliverable separate from the project’s return on investment.
“We focus on the workflow analysis – the discovery and the design. Ultimately, Canoe implementations are more focused on guiding clients through workflow changes than they are on platform configuration or what is more of a traditional implementation. Ideally, the client performs their due diligence and together we get a good result,” said Loughrey. “But if scoping and resource planning is insufficient, then the client likely won’t hit the milestones they own within the project, and it will delay the initiative.”
And, for Wealthspire, that planning meant the changes felt both necessary and natural. For example, “Our client operations team handles subscription documents for new LP positions for clients. They have incorporated Canoe into their regular process for adding new LPs. If it’s an investment that offers a portal, our Client Ops team knows to automatically get the forms necessary to set up Canoe Connect,” said Wagenhoffer. “That’s now a part of our natural onboarding for new LPs, which is great. It’s an inherent part of how we are thinking about LPs at Wealthspire now.”
Canoe’s impact is often pretty immediate, with tasks automated, workflows streamlined, and reporting more accurate. But because we invest more time upfront into discovery, analysis, and design, we can both help you achieve your goals and plan for sustainable long-term success.
“Canoe provided the leverage for us to support more work with our existing team,” noted Wagenhoffer. “Being able to offer more value-add services to our Family Office Services clients at scale has been a huge benefit. Aside from the initial setup of the new fund, it’s no additional work to report on more LP positions for our clients, so we’re very confident in being able to socialize the solution with our advisors. The biggest benefit has been the ability to add the additional reporting and tracking services for LPs efficiently and at scale. We want to continue to add to the number of clients and advisors taking advantage of these new reporting capabilities because, as you can imagine, clients tend to have outside alternatives, and we want to be able to provide reporting on those alternatives as part of our services. Canoe is a big piece of that.”
Stakeholder Resistance
With any change comes resistance, but changes in the workplace can be particularly sensitive. Whether it’s asking someone to change part of their daily routine or reassigning certain tasks to another team entirely, stakeholder sensitivities are some of the trickier factors in change management.
“First, we try to understand the landscape. Then, if there are sensitivities, we will align at a different level, such as introducing a steering committee with key business stakeholders. Sensitivities come up all the time – people are doing this work presently, they like the current workflow, or they fear their value will become limited,” said Loughrey.
While there is usually excitement surrounding a new technology, those involved in the purchase and implementation process are not always the end users of that technology. In order to bridge that gap, Canoe creates a steering committee and remains an actively involved partner throughout and following the implementation.
Loughrey emphasizes this further: “We really focus on getting successful use and ultimately ROI. Our implementation and client lifecycle are designed around generating a return on investment driven by the broader team’s adoption. We’re not sending out a standard list of templates and how-to videos; it’s more bespoke.”
A perfect example of this approach in practice is Wealthspire’s aforementioned decision to add historical reconciliation after planning for internal communications to the advisor staff.
Wagenhoffer said this is consistent with how the team has tackled communications about the technology: “We’ve really tried to do a good job marketing Canoe’s functionality internally to our advisors so that they know that they can go to those clients that may be interested and tell them that we have a viable, efficient process to be able to report on any alternatives outside of our management. Educating our advisory staff has been helpful because they’re the ones ultimately bringing this to a client and getting them on board. It has been successful as we’ve seen many of our advisors add new alternatives outside of our direct management to our reporting platform for clients.”
Sustaining Change: Ensuring Long-Term Success
To the Wealthspire team, it’s clear that the value of thorough discovery and their close, collaborative relationship with Canoe, has extended beyond the aforementioned examples.
Though Wealthspire has been onboarded with Canoe since August 2022, Wagenhoffer’s team continues to realize new value from the solution: “We are excited to have our first tax season coming up for K-1s with Canoe. That workflow has always been very manual, and we weren’t quite fully implemented with Canoe this past year for tax season, but we are for this year. We’re fully on board now, so we’re excited to see how Canoe can help support K-1 tracking, delivery, organization, and all of that as part of our tax reporting process,” she noted.
Wagenhoffer maintains a close relationship with her Canoe relationship manager, and they frequently discuss what’s possible with the technology and what new functionality is soon to be released. She further illustrated that point with a current example: “We’re working on building out an API connection with Canoe to get real-time capital call information. Once set up, we’ll be able to automate alerts or tasks for our client service teams to notify them of capital call notices and money movement or wire needs for clients. Being able to tie the capital call information we get from Canoe with Tamarac and CRM data is the ultimate goal, which will allow us to better track capital calls and prepare paperwork for any wires needed.”
The inherent sense of partnership with Canoe, first noted in the planning stages, also continues today. Wagenhoffer expressed: “I love that it continues to feel like a partnership with Canoe, and it wasn’t just in the implementation stage. Our relationship manager recently offered for us to be pilot partners in building out a new offering, providing feedback, and testing it in application. That’s super important to me when I look at technology vendors—to feel like a partner and like my feedback is being as listened to and applied as possible.”
Conclusion
Interested in following Wealthspire’s example? Please contact us or request a demo.
Canoe has supported over 275 alternative investors and allocators through the process of implementing our technology, so our recommendations are informed by similar client profiles as well as industry and peer best practices. These successful client implementations are the result of our comprehensive change management planning process and hands-on approach, which we employ throughout each client project.
Did you miss parts one and two? The first blog in this series includes our to-do list framework to better understand and plan ahead for how new technology may impact existing processes. The second discusses how to be prepared throughout your implementation to successfully adopt the new tech.