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In the Eye of the Perfect Storm, the Future Is Forms

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If the financial advisory industry had the equivalent of meteorologists, they would be ringing alarm bells. The perfect storm is gathering. Three distinct high-pressure systems are moving in on the industry; each is a force unto itself, but together they will change the financial services landscape forever.

Robo-advisors and the blistering pace of fintech innovation, a Department of Labor in the throes of a volatile power struggle in Washington, and the coming of age of the next generation of post-boomer investors is compelling advisory firms to take a hard look inwardly and ask: What are we going to do to survive this? Inaction is not an option, and serious missteps in this environment can spell doom. Those that prepare properly for this storm will be fine — but prepare, you must.

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First, organizations need to identify the elements of this storm to understand what they’re up against. Only then can they find the relevant technology tools that can help them survive it.

Dissecting Disaster

Robo-advisors are snatching billions of dollars of business every year from traditional financial institutions, while advisors’ operational costs increase with the DOL’s fast-approaching deadline for mandatory fiduciary rule compliance. Algorithm-based robos operate completely online and can open new accounts in a matter of minutes, unlike traditional institutions that require tedious, manual data collection. Incredibly, the old-fashioned methods still generally prevail, starting with finding client information in a CRM or, still for many firms, on an Excel spreadsheet. Then, the most current version of an account application must be selected by the advisor by sorting manually through thousands of forms. Each stakeholder must sign off on the document, which is then returned for a rigorous NIGO/IGO and suitability review before being sent to a clearing house to finalize processing.

If the above process seems cumbersome, it’s because it is — these steps can take several weeks to complete and eat up significant operational costs. Meanwhile, opportunity costs remain high in comparison to the lightning speed with which robo-advisors operate. Despite an urgent necessity to modernize, wirehouses are bound by challenges including low user adoption, complexity of technology and lack of integrated system design.

For organizations that have decided they need technology to battle the robos, finding the perfect tools can be a daunting task. Fintech is among the fastest-growing industries, boosted by rapidly increasing investments in global fintech, which year-over-year grew by 75% to $22.3 billion in 2015, according to an Accenture survey. More than 40 technology companies — ranging from CRMs and financial planning, to portfolio management and risk tolerance and other specialized tools — sponsored and exhibited at a recent Technology Tools for Today (T3) Enterprise Conference. For the average advisory firm, understanding the technical nuances of each fintech application could easily be a full-time job.

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Advisory firms that adopt this growing arsenal of technology tools often have to build dedicated teams to maintain and support them — a task that can be both expensive and inefficient. In addition, having many information entry points increases risk of duplicated data, leading to privacy and policy violations.

Tech Tools to Batten Down the Hatches

A popular saying goes, “Technology is only as good as how it’s used” — yet one could argue that technology is only as good as when it’s used. Often, all the bells and whistles built into technology tools are so overwhelming that advisors simply give up figuring out how to maximize the benefits of it. Improving efficiency through electronic document management, boosting productivity through business process automation, better informing strategic business decisions with data analytics — it all appears out of reach when employees and business leaders retreat back to the old ways of doing things. Understandably, the limited bandwidth for additional time and effort to migrate entire systems results in low user adoption rates.

So how does one address these myriad operational and technological challenges? Where do you even begin? The answer is refreshingly simple — forms. Yes, forms! They are all around us, used every day for any number of business cases. They are so commonplace, so fundamental to the proper operation of any business that we tend not to even think of them. Each of the above challenges can be met and conquered with an end-to-end digital forms solution platform. At the user level, the online e-form provides a familiar consumer experience, allowing advisors to start using the solution from day one without extensive training. On the back end, the e-form workflow functions as a process manager, conducting data exchange with various platforms, monitoring the digital signing ceremony and driving internal document review through workflow automation.

A good forms solution platform needs to provide a unified, consistent portal for advisors, reducing the need to learn multiple applications — a key factor contributing to low user adoption and under-utilization of technology. In addition, the e-form process manager monitors and tracks activity from beginning to end, and aggregates performance and operational data for analytics reporting and process optimization.

The perfect storm of robo-advisors, DOL fiduciary requirements and the shifting expectations of younger generations of investors has fundamentally altered the sea of wealth management. To ride out the tempest, your first order of business is to batten down the hatches. In your case, that means getting your digital forms flow functioning at its highest level. Focus on that, and you’ll soon have a business built for all weather.

— Read Fintech Marches on, but Traditional Firms Have Advantages on ThinkAdvisor.


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