My father was an agent and advisor for 60 years and never had an E&O claim. My sister took over his business and has never had one either, but it’s not for a lack of trying. Lest you think it sibling snark, let me explain:

She constantly has lawyers calling about some frivolous claim or another. She’s ethical and precise with an extreme attention to detail so nothing ever sticks, but it’s a sad commentary on our ever-increasing litigious society. Part of how she’s been able to keep the hounds at bay is through her use of technology.

The customer relationship management system she’s chosen is robust and includes all the bells and whistles—marketing templates, document imaging, e-signature capabilities, you name it. What she finds most helpful, however, is the speed and ease of the document retrieval system and the notes that accompany it. A police officer is taught their most effective weapon in their role in apprehending and convicting criminals is their notebook. The same could be said of the CRM when it comes to compliance and litigation involving advisors and agents.

Advisor Greg Friedman is also the founder and CEO software provider Junxure. He concedes compliance is always an issue, but notes the “bigger issue” of lawsuits.

The still-recovering economy, he explains, means individuals are correspondingly still looking for a way to recoup their losses “from their own poor spending habits prior to 2008,” meaning the less scrupulous will litigiously come after whomever they can, agents and advisors included.

“More than anything, technology has provided me with a rock-solid corporate memory,” he said. “Every move we make on behalf of our clients and the firm is documented, with an explanation of why we made the move.” 

According to Freidman, it’s all about the data and how to get to it fast, specifically in these six areas:  

1. Client lists

2. Contact lists

3. Important dates

4. Important account data

5. Client communication

6. Other documents that demonstrating a “culture of compliance”

If it all sounds obvious, ask yourself why more agents and advisors don’t avail themselves of technology. Indeed, a recent survey from industry researcher Joel Bruckenstein found that over half do not use a CRM. For those that do, the majority are at least three iterations behind on their technology updates, meaning they have it, but it’s hardly cutting-edge.

The amount and complexity of state and federal regulation in the insurance and financial advisor space means even the most ethical of agents and advisors can invariably get tripped up, something on which lawyers rely. Technology won’t make someone ethical, but it goes a long way in proving they are.