Close Close
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards

Technology > Marketing Technology

Set It and Forget It: 4 Reasons You Need Back-Office Automation

Your article was successfully shared with the contacts you provided.

The business model of today’s wealth advisor is under fire. Technology entering the market imposes new threats, and changing regulations are shifting the focus of advisors off their clients. How will advisors find the time to address these changes internally and properly communicate them to their clients? The answer lies in automating back-office processes, which frees up time, increases efficiencies and enables advisors to offload non-revenue-generating workflows.

Would you trust an advisor who is standing still right now — not preparing her business for impending regulations, cyber threats and technological advancements — to manage your money? Advisors know change is coming. Eighty-three percent of asset management professionals surveyed by Confluence believe there will be at least one factor that drives change within their organizations. Some of those challenges include improving back-office processes, managing regulatory reporting requirements, centralizing fund data and reducing reliance on manual processes. All of these can be solved by technology.

With an increased focus on client service becoming even more necessary, here are four reasons why you need to automate your back-office processes:

1. You’ll improve data access.

As today’s advisors continue to modernize, they’ll often use several technologies, which include in-house solutions as well as vendors, to manage different elements of their business. Whether it be a CRM, document management tools, a wealth management system or an office suite, these disparate systems can make data harder to access, as many of these technologies don’t integrate natively. As new demands come from both regulators and clients, advisors are going to need to increase their flexibility.

The growing sophistication of the advisory business is rendering certain functions too difficult or tedious for them to tackle with the current models in place. Leveraging technology that connects the middle and back office and centralizes access to data enables seamless reporting and increases vendor and platform flexibility. 

2. You’ll save time.

An advisor’s most precious commodity is time, and that time is, in many cases, being wasted on manual processes for tasks that can be automated. Instead, that time can be spent meeting new prospects, improving relationships with existing clients, researching investment opportunities and strategies, and enabling seamless access to client data to further demonstrate an advisor’s value. Technological advances like robo-advisors are here to stay, and advisors are being challenged to differentiate themselves and prove their worth.

In today’s low-volatility environment, the asset-class balance has maintained a similar profile for the last decade. Advisors must showcase their value-add beyond asset-class management, especially as actively managed funds are losing out to passive funds. With fast access to data and tools, advisors can quickly and easily provide clients with more detailed advice beyond what current robo-advisors offer. For example, leveraging back-office automation technology can enable more sophisticated risk management of a client’s portfolio.

3. You’ll decrease operational risk.

Managing portfolio risk is just the tip of the iceberg for advisors. With the Labor Department’s fiduciary rule expected to be fully implemented within the next 18 to 24 months, and the threat of cyberattacks and regulations that call for improved documentation impending, advisors are being forced to deal with a number of outside factors that are taking their focus away from client service. The Equifax breach of 2017 served as a major wake-up call to businesses of all kinds to make cybersecurity and risk control a top priority.

By automating their back-office processes with technology that leverages best-of-breed cybersecurity protocols and is built to scale, thus becoming prepared for impending regulations, advisors can sleep better at night knowing they are covered when it comes to the inherent risks to their business. With 60% of respondents to the Confluence study saying that improving management of the increased regulatory reporting requirements will be an important element of back-office operations over the next two years, it’s imperative for advisors to have systems ready and to not get caught unprepared.

4. You’ll increase efficiency.

We’ve found that many advisors juggle relationships with several technology vendors to help them run their business more effectively. However, managing and accessing all of these technology providers can lead to complexity that is difficult to navigate. Patching together a number of disparate technologies usually results in inefficient use of time, security exposures, and inflexibility with respect to expansion and contraction.

Automating the back office with a central point of aggregation and access enables a more seamless approach to data management, regulatory reporting, document management, reporting on client accounts and a host of other processes that are important for the day-to-day operations of today’s advisors.

As sophistication levels in the advisor space increase and tried-and-true business models are being forced to change, it’s imperative that advisors be ready for the impending shift. Back-office automation enables better data access, frees up time, and improves operational risk management and efficiency. Taking advantage of technology systems that do away with manual processes provides advisors with increased opportunities to focus on their main objective: protecting clients and keeping them happy.


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.