Brooke’s Note: Most of the software vendors to RIAs have plenty of competition, but maybe nobody faces a larger and more determined rival than Greg Friedman does with Salesforce. Just when his company’s Junxure product was becoming tip-top in the RIA world, along came the San Francisco juggernaut. It had been around since 1999 but not for interdependent advisors. Making the challenge steeper, Friedman’s software was still on the desktop — fine for some advisors but not where CRM seems to be headed. Yet in spite of that daunting picture, Friedman is not cowed and in a recent sit down meeting in the lead-up to his company’s launch of its own web-based product, he wasn’t defensive. In fact, Friedman says it may be the giant’s turn to worry. Special thanks to Franklin Tsung for presenting the Salesforce side of the story. The big company declined comment.

As Greg Friedman takes Junxure to the cloud, he’s taking the gloves off with Salesforce — bolstered by new technology and a sense that the CRM giant is leaving much on the table in functionality and quality of service.

Co-founder of CRM Software, which produces Junxure, Friedman is matter-of-factly regretful about the relative tardiness of Junxure Cloud to market. But he’s adamant that the fruit of his firm’s patient efforts is arriving in plenty of time to stave off a Salesforce onslaught. When contacted, Salesforce’s public relations firm, Hill & Knowlton, declined to comment, saying that it had no one available to discuss these issues. Junxure moving to the cloud amid market pressures.

That giant San Francisco-based CRM software firm, which has a market capitalization of $22 billion, has insinuated itself ever so deeply into the technological fabric of RIAs in the past couple of years. See: Schwab chooses some giant software partners, apparently with big RIAs in mind.

Schwab, Fidelity and TD Ameritrade have all hitched their wagons to the rising software star. United Capital Financial Advisers LLC, Bank of America Merrill Lynch and Morgan Stanley are also deeply ensconced.
h2. An eternity in tech years

The first beta users of Junxure will come online by late January, and the fuller release of the product is scheduled for the end of March. The first iteration will be somewhat rudimentary but CRM Software plans to follow it with a 18-month stretch when it releases a constant stream of features that will bring it to it mature form.

The time it took for Junxure to reach the cloud was not ideal, Friedman realizes.

“If I could have waved a wand, I would have had it two years ago.”

But to some extent, the time of launch is deliberate. Friedman points out that he could have built a Junxure overlay onto a platform such as those of Salesforce or Microsoft. After looking at it from a variety of angles, he decided that it was critical to continue to control the advisor experience from tip to tail — even though it would add months or years to the online product’s time to market. Such a time period is an eternity in technology marketing and has allowed Salesforce and Microsoft to establish a big presence among RIAs. See: Advent envisions a cloud-based world under stormy Las Vegas skies at the software giant’s annual confab.

“We knew we’d take lumps for being 'late,’” Friedman says.

Apps not included

Even without any Web delivery of its software — Junxure has managed to keep itself in a favorable position in the RIA world with a sharp differentiation from Salesforce, according to Bill Winterberg, principal of FPPad.com.

“Using Salesforce is a lot like using products from Apple. Out of the box, Salesforce isn’t customized for RIAs, just like Apple products don’t ship with many apps installed. One either needs to customize Salesforce internally or hire a third party to add an overlay specifically tailored for RIAs (like AppCrown LLC). And Salesforce has its own version of the App Store — called the AppExchange — where any number of add-on plug-ins can be found, but only a few are applicable to RIAs.”

Bill Winterberg: You don't call Apple when you have problems with your Angry Birds app. That's the same thing with Salesforce.
Bill Winterberg: You don’t call Apple
when you have problems with your
Angry Birds app. That’s the same
thing with Salesforce.

Winterberg adds: “On the support side, you don’t call Apple when you have problems with your Angry Birds app. That’s the same thing with Salesforce. If the CRM isn’t working properly, say, with a portfolio management integration, Salesforce will direct advisors to contact the portfolio management software vendor. RIAs are on their own for training and support unless they connect with a Salesforce reseller or overlay provider who knows the RIA industry. Junxure is built by advisors for advisors, so it’s ready to serve much of the needs of the average RIA right away.”

'Fanatically happy clients’

Having a smaller firm like CRM Software as the ultimate backstop has its drawbacks, according to Franklin Tsung, principal of AppCrown, an overlay manager of Salesforce. See: How AppCrown got a big RIA footprint overnight by handling Salesforce implementations.

“Junxure still needs to rely on Junxure engineers to get an upgrade or extension once every few years,” he says. “Unless Junxure [gets to] 10 times its [current] size, it would be impossible to imagine that it can keep up with the technical advancements made by Salesforce on a global level. This isn’t a comparison of who is better, rather who is larger and has greater size and scale to invest into product innovation. United Capital, Bank of America Merrill Lynch, Morgan Stanley, TD Ameritrade, Schwab, Fidelity, have all moved to the cloud, to Salesforce specifically.”

Friedman sharply disagrees with this point, based on RIA needs and the quality of the Junxure Cloud technology.

“Junxure has over 10,000 users currently across almost 1,500 firms, with a client retention rate of 96%. Junxure has a lot of fanatically happy clients. We’ve yet to interact with an RIA who raves about their Salesforce solution. Perhaps there are some out there, but they seem to keep fairly quiet,” he says.

“This is not a technology arms race for advisors, except perhaps when you are talking about the largest [wirehouse-type] firms, where IT is driving these decisions, customized solutions are seen as a competitive advantage, budgets are huge, and large projects equals job security for IT,” he adds. “For independent RIAs, deep domain-specific CRM functionality and flexibility out of the box is what leads to usage, utility, client retention etc., and these are the key success metrics where Salesforce has not shown well. That said, with Junxure Cloud release in the first quarter of next year, the technology arguments will be moot. Junxure Cloud will be based on a similarly flexible plug-in [app] model and Junxure’s MVC architecture will provide clients with virtually unlimited extensibility.” (MVC — Model View Controller) is an architecture that separates the representation of information from the user’s interaction with it. The central idea behind MVC is code reusability and separation of concerns.

Wealth-manager driven

Friedman believes his penetration of the RIA market exceeds that of its monster rival. Junxure is used by 1,500 firms and 10,000 users. and about 66% of them are RIAs. The number of firms has approximately doubled during the past five years and all of them use the desktop software. Junxure is one of three CRM providers chosen by Schwab Advisor Services. See: Schwab shifts its strategy on its massive Intelligent Integration.

Despite being late to the cloud, Friedman says the extra time he spent getting Junxure online is going to pay off in a big way. The cloud version of Junxure literally meant starting from scratch in terms of coding, but it also required a whole world of decisions to be made before the programmers could start tapping in their squiggly lines.

“It’s wealth-manager-driven,” Friedman says. “I don’t have to add fields — for instance, to deal with compliance issues — and add-ons that feel disconnected.”

Two day jobs, no life

Franklin Tsung: This isn't a comparison of who is better, rather who is larger and has greater size and scale to invest into product innovation.
Franklin Tsung: This isn’t a comparison
of who is better, rather who
is larger and has greater size
and scale to invest into product
innovation.

Junxure has been around for more than 10 years. In the same time that it’s devoted itself to being a CRM, Salesforce.com (around some 13 years) has built up its platform to $3 billion in revenue. Junxure was originally just a cottage business offering the technology that Friedman was using for his own RIA. He is still co-principal of Private Ocean, which has 23 employees and $700 million of assets under management.

Friedman, 51, was founded Junxure in response to the failure of CRM providers to address RIAs specifically. The problem was that the original Junxure was too small to hire dedicated employees but too big to for its founder to get any peace.

“It was 50 clients. I had no life, no vacation.” With that in mind, he and co-founder Ken Golding ramped up the business. Friedman allows that things are still a little crazy because he has, in essence, two day jobs — splitting his time between his RIA and his software firm 50-50 and typically working a 70- to 80-hour week. “It’s not sustainable,” Friedman says.

Salesforce.com offers a tremendous amount of user capabilities extending to prospecting, network/relationship management, household servicing and more. Its network of partners and industry specialists gives end-users substantial freedom to develop and build their own CRM that is in line with the advisors competitive advantage, Tsung says. See: As advisors flunk social media 101, CRM makers are starting to pick up the slack.

Too much assembly required?

Friedman takes issue with this view.

“The vast majority of advisory firms do not want to develop and build their own CRM solution!” he wrote in an e-mail. “Salesforce requires them to do so, and so has attempted to tilt the discussion to claim that it is a virtue of their business model. It is not — it is a huge negative for the vast majority of independent RIAs. Do RIAs want to buy their car or TV in a kit and put it together?”

But Tsung says putting together technology beats a single off-the-rack solution for bigger advisors who can afford it.

“The issue with Junxure’s one-size-fits-all approach is that no one RIA firm could fit into a predefined parameter. (Note: This has been an issue for many RIA’s that have used AppCrown to migrate from Junxure to the cloud). “But against the grain of IT best practices and the ethos of cloud computing, Junxure continues to stick by its 'We define your world’ approach,” he says.

Tsung continues: “Salesforce is a general technology platform with various customizations per user — an example of its renowned multitenancy framework and support enterprise, and RIAs’ seeking to obtain a flexible IT infrastructure that will grow with them. Salesforce excels for RIA’s with assets greater than $100 million.”

Tech couture

Winterberg adds that there could be a perceived downside to what Junxure touts as advisor tailoring.

“Some of my RIA clients tell me Junxure’s user interface frustrates them because the software tries to be all things to all advisors and has suffered “feature creep” as a result. With over 20 tabs in just one contact’s screen, it can be overwhelming to try and figure out which is the right one to use to document a phone call.”

Friedman addresses that criticism by saying that a client can enjoy the upside of Junxure without the downside.

“What [Winterberg] calls 'feature creep,’ Junxure clients would call robust, deep-domain-specific functionality, built from the ground up for advisors, and it allows Junxure to implement a tailored configuration and user experience for advisor clients with various strategies and business models,” Friedman says. “While there may be 20 tabs available on a screen, each of them may be turned on or off depending upon a client’s preference — Junxure works through the configuration/customization process with each client. And all of the tabs were designed for advisors.”