In many respects, the successful adoption of electronic signatures (e-signature) by advisors has more hurdles than any other technology now commonly used. A number of firms have had great success with e-signatures, others have tried and given up, and some haven’t even considered it.
E-signatures are a time-saving technology that continues to make great strides. The challenge is often not the technology itself, but understanding where to begin. I hear this specific question all the time. The answer, however, is not “one size fits all.” It’s important that advisors address several key considerations before they implement e-signature technology.
If your first response to e-signature technology is “been there, done that,” well, it is time to recognize that advancements have been made. For example, each new mobile or tablet device improvement (faster processors, bigger screens, etc.) makes it easier for your clients to sign a document electronically. Furthermore, providers have made the process of signing documents more streamlined and intuitive than it was several years ago.
It is also important to recognize that clients are probably becoming more familiar with e-signature technology, too. They have likely already used it in various situations: retail, financial, health care and other industries.
One of the first challenges is deciding which provider is best for your firm. Sometimes this decision will be made for you based on the rules of your broker-dealer or custodian. If not, a critical best practice is to try out multiple providers. A number of providers like Docusign, Right Signature, Adobe and others offer a low cost to try their solutions. Too often, people select a provider without running the technology and the process through its paces. Don’t rush it. Try working with a few of your favorite clients to help beta test the e-signature solution.
As part of the selection process, take time to review not only the features but also the agreement of what the e-signature provider will and will not do. What do you agree to do as the user? For example, the user often decides what information is required to authenticate the signer. This could be a variety of identifiers, ranging from the client’s email address or having their own pin number to answering a number of personally identifiable questions. There are a number of possible authentication methods for your firm to consider, but keep in mind any requirements in this area with your business partners (third-party asset managers, custodians, insurance companies, etc.).