Next month, the Securities and Exchange Commission will begin requiring that advisors have a business continuity or disaster recovery plan in place. Quite a few broker/dealers and electronic document management firms are helping advisors comply by offering them new Web-based imaging services that provide virtual file cabinets so they can not only store years of data but also speed their workflow.
Web-based imaging is a huge development for advisors because it not only virtualizes their offices–allowing them to work from anywhere at any time–but it also provides the basis for a disaster recovery plan that many advisors may have desperately needed but weren’t quite sure how to develop on their own.
Cambridge Investment Research and Commonwealth Financial Network are two independent broker/dealers that are now beta testing Web-based imaging solutions with their advisors. Commonwealth has offered its reps a desktop imaging solution for the past three years, which it developed with Laserfiche. But the new Web-based system moves advisors into the 21st century because they “need nothing but a browser to essentially manage their entire office and create a virtual office,” says Darren Tedesco, director of business systems at Commonwealth. “Your filing cabinets go with you wherever you are–an airport kiosk, your office, your house, your client’s office.”
Imaging does more than just provide advisors with the ability to create an essentially paperless office, Tedesco says. Sure, it’s great to scan all of your documents and move them into an electronic format, but the real value that imaging provides is “when you’re starting to im-prove your proc-esses and workflow so you’re spending less time doing work,” he says. “You can get to your documents quicker, and make sure from a compliance standpoint your bases are covered.” He adds: “The value isn’t the day-to-day paperwork that you’re looking through, it’s the peace of mind of knowing that it’s there and knowing you’re compliant, you don’t have to worry about backups.”
Cutting Out the Middleman
Cambridge’s and Commonwealth’s imaging solutions are also cutting edge because they not only allow advisors to scan documents that are relevant to the broker/dealer, like new account forms that advisors would normally send to the B/D in hard copy, but also because the advisor can create an electronic filing system for his documents. “Besides having imaging here in the home office, our system provides the reps a full imaging capacity in their office,” says Eric Schwartz, Cambridge’s president and CEO. For instance, the advisor could take 25 years worth of clients’ financial planning documents–tax returns, trust documents, and personal notes–and create an electronic filing system to store them in. This type of imaging service is sorely needed, says Jo Day, president of Trumpet, Inc., a firm based in Phoenix that provides electronic document management for financial services firms, because one of the biggest complaints she hears from reps is that their B/D’s imaging service focuses solely on how the reps can more readily get paperwork to the B/D. Most of the imaging systems out there are “meeting a piece of [reps'] needs, but not all,” she says.
What’s more, Cambridge’s and Commonwealth’s imaging systems also link the advisor to the clearing firms and fund companies to facilitate quicker processing of trades. For instance, say an advisor scans an electronic image of a direct account application for American Funds, Tedesco says. Today, the advisor is sending that direct application to Commonwealth to be approved, and then it goes to American Funds, he says. The new imaging solution allows the advisor to scan the paperwork, Commonwealth “annotates” the paperwork, and then the advisor is free to send it directly to American Funds, “which basically cuts out the middleman and gets the money invested quicker.” Ryan Reineke, a VP at Cambridge, adds that while Cambridge’s imaging system, called C-Doc, “facilitates getting documents from one place to another, the end goal is to link up online trade approvals and soup-to-nuts transfer documents from the rep’s office all the way to the clearing firm or third-party partners.”
Reineke says Cambridge has designed its imaging system so that, depending on which type of document the advisor scans in, the system automatically knows where to route the document–to Cambridge’s compliance department or to one of its clearing firms, say, Fidelity’s National Financial–and it can be routed to multiple places at once. “We built the system so that it routes documents to various people to work on at the same time,” says Schwartz. Cambridge’s system is now linked with National Financial, and the B/D is beta testing its imaging system with Pershing. Schwartz hopes to link with Schwab’s imaging system, as a lot of Cambridge’s advisors custody assets at Schwab, as well as some of the larger fund companies and annuity companies.
Cambridge’s imaging system is also great because the rep can monitor workflow, Schwartz says. For instance, if a rep wants to ensure that Cambridge’s home office received a document, “the rep can just go into the system and see exactly whose desk it’s sitting on and where it is in the process,” he says, rather than calling. “We can track the process here [at the home office] and know exactly where the bottlenecks are, and so can the rep.”