When Norm Boone installed Voice over Internet Protocol (VoIP) throughout his three financial advisory offices in 2005, the transition had some bumps. "The conversation was garbled one-third of the time," says the founder and president of San Francisco-based Mosaic Financial Partners. "And obviously when you're talking with clients on important matters, that's a big issue."
Still, Boone felt drawn to the new technology, convinced that services linked with VoIP would dramatically improve customer service. He liked the fact that clients could call one main number, and still be connected to the remote office in Tahoe. And should an advisor in Tahoe be on vacation, the receptionist in San Francisco could pick up the call and take a message, rather than have a client languish in voice mail limbo.
So Boone pushed for some adjustments, including installing a separate DSL line in both Tahoe and a second office in Lafayette, California, just for VoIP calls, and now feels the firm has reached cruising speed. "I'm a big believer that to stay cutting edge, you need to give top-quality advice while staying on top of new technologies," he says. "That's what lets you grow into a bigger company."
As VoIP transitions into more of a mainline business technology, investment advisors are increasingly making the switch to this new form of digital communication. The benefits are many. While startup costs can be sizeable, monthly fees tend to drop dramatically as users save money on cheaper service plans, and also by having to make fewer maintenance calls. Price points for smaller firms, even those with one or two advisors, have also come down as service and system providers are starting to cater to smaller-sized businesses.
Then there are the bells and whistles–often free with VoIP service–that are attracting advisory firms as well, including voice mail that can be accessed from the Web, one-click calling for clients, conferencing capabilities, and systems that dovetail with existing customer relationship management (CRM) software. "It was a huge cost savings," says Jim Freeman, national sales manager for the Boston-based broker/dealer Cantella & Co. "But the big reason we switched was that we felt we could provide better services to our clients. With us, call quality went up."
However, in a sector so dependent on customer service, where financial data is discussed, security and dependability are paramount. Voice sent over the Internet turns into data packets, just like an e-mail, and can be intercepted. Plus a phone line failing can be a death knell to a firm.
Putting the pieces together correctly can eliminate many of these concerns. Installing a second Internet line as a back up can cushion the impact if a phone line falters. Finally, hiring a security expert for installation is critical–something financial advisors should be monitoring for the safety of their clients anyway.
New offerings in the marketplace are taking many of these points into consideration, creating links between analog, mobile, and VoIP systems for backup purposes, and installing encryption so lines are secure. "You don't get VoIP just because everyone else has it," says Bryan Cohen, a systems engineer with CDW, the computer vendor and consultant in Vernon Hills, Illinois. "Like any good phone system, you get it so you can communicate, and because it can benefit your business."
Secure Solutions
Fidelity's move to VoIP has been slow, but steady. Teaming with Cisco, Fidelity pushed early by offering its active traders a "click to call" option on its Web site, enabled through VoIP.
By pushing the button online, those investors are instantly connected to a rep at Fidelity, while their account details are loaded on the rep's PC as the call goes through. Plans to make the service more widely available are in the works, but without any specific time frame. "This is clearly a crawl-before-you walk situation," says Dan Tonelli, senior VP of telecom architecture and technology at the Boston-based Fidelity.
Where Tonelli says the firm has not dragged its feet, though, is security. As VoIP moves over the Internet, Fidelity wants to make sure that calls are not only protected from theft, but also from being heard by the wrong person. That's why Tonelli installed encryption software throughout the network. "Security is our top concern," he says.
Ed Skoudis, an instructor with the information security institute SANS, and founder of Intelguardians, an information security consultancy based in Washington, D.C., agrees that security is something that financial firms should push. As mentioned earlier, VoIP takes audio calls and turns the information, or data, into small packets that travel across the Internet like any other data, such an e-mail or credit card numbers. Just as an e-mail can be captured, so can these voice packets, which can then be pulled together, and turned back into audio. Result? An instant wiretap.
Most Internet service providers, like Verizon, Time Warner, and Comcast, send this data over private backbones–think tunnels that run along the main Internet highway, but protect them from mixing with the rest of the riff-raff. But there are still off-ramps, so to speak, as the data moves from one transfer point to another, that might not be as secure. "With encryption, hackers can still capture these packets, but it sounds like gibberish," says Skoudis.
Skoudis believes firms shouldn't stop at encryption, but also make sure its systems are patched regularly and hardened. "The problem is that vendors advertise that these call managers are an appliance," he says. "You just plug in and you're done." Not good enough, says Skoudis. Instead, a tech consultant, inside IT team, or even the vendor should tighten certain settings and also shut off services that a firm won't be using, in effect locking the doors that a company knows it doesn't need to use.
Cisco couldn't agree more, and its latest service aimed at the small business user has data-switching security features built into its appliance, says Eren Hussein, senior manager, unified communications solutions marketing with the San Jose, California-based company.
Meant for firms with 49 employees or less, the new solution works in tandem with a service provider's Internet line. With a list price of about $600 per phone, Cisco's system clocks in higher than a regular cordless from Best Buy. But then there are the features; the system allows a user to have music on hold simply by plugging in an iPod or other MP3 player. Outlook connects to the software so advisors can click on-screen to place a call, and the solution also integrates with Microsoft's CRM system, bringing up a client's account as they're dialing.
Advisors can also link mobile calls to VoIP with Cisco, even if the two calls are on different carriers. The result? An advisor chatting on his cell phone with a client can come to the office, click a button, and move that call to his desk phone without the client ever noticing. Video calls are also possible, with a small camera that sits on a PC, letting up to three people videoconference together. However, plans to offer true Web conferencing for the smaller firm are still in the works. "Yet with our acquisition of WebEx, the potential is clearly there," Hussein says, referring to the Web-based conferencing system.
A Simple Choice
For firms with a one or two-person operation, Vonage is a choice that can get an advisor up and running with VoIP in just a matter of minutes. Other options can include turning to a local cable company, like Time Warner or Comcast, both of which offer VoIP services to many customers across the country.
As for Vonage, while 90% of its business is aimed at the residential customer or single user, the Holmdel, New Jersey-based firm does offer a couple of plans that can scale up slightly for offices.
