How to Develop a Paperless Office Strategy That Works for You. A Guide for Wealth Management Firms

Transcription

1 How to Develop a Paperless Office Strategy That Works for You A Guide for Wealth Management Firms

2 TABLE OF CONTENTS STEP 1: SET EMPIRICAL GOALS FOR YOUR PAPERLESS INITIATIVE 4 STEP 2: DEVELOP YOUR INITIAL PAPERLESS POLICY 5 STEP 3: SELECT A TECHNOLOGY VENDOR 6 Choose vendors with wealth management experience. Choose as few vendors as possible. Choose vendors that integrate with each other. STEP 4: START WITH AN EASY WIN 7 STEP 5: EDUCATE STAKEHOLDERS 8 STEP 6: EDUCATE INVESTORS 9 STEP 7: DEVELOP NEW WORK POLICIES 10 STEP 8: MEASURE IMPACT 11 CONCLUSION 11

3 The benefits of going paperless are as varied as they are incredible. More efficient operations, increased competitiveness, better security, reduced costs, less environmental impact the list goes on (and on, and on). But with all the big talk about why wealth management firms should go paperless, there s a surprising lack of discussion about how exactly they should do it. Going paperless is a great buzzword, but it represents a complex, multi-phased process that might take years to do correctly. Brokerdealers and RIAs who set out on the paperless journey can encounter obstacles like regulatory challenges, objections from employees, budgetary concerns, and business disruptions. However, with each passing year, going paperless becomes less of a long term goal and more of an imperative. According to Fidelity, 41% of RIAs and 30% of independent broker-dealers were mostly paperless as of 2014, and these numbers have almost certainly grown since then. 97 % Share of advisors who say paperless solutions have helped their practice. (Source: Fidelity) 3

4 STEP 1: SET EMPIRICAL GOALS FOR YOUR PAPERLESS INITIATIVE This is business 101 stuff, so we won t dwell on the topic, but suffice it to say that you can t judge the success or failure of your efforts to go paperless if you don t have specific goals in mind. According to TD Ameritrade, technology represented the biggest increase of any spending category for RIAs in If history is any indicator, large technology expenditures are usually followed by periods of self-reflection, when executives and board members review their spend to determine which expensive hardware and software solutions they can send to the chopping block. Possible KPIs for your paperless office strategy Spend on paper and other office supplies NIGO rate New advisors recruited Average account opening time Advisor satisfaction If you want your paperless office strategy to survive, you ll need specific, reasonable goals and achievable results that can stand up to scrutiny. 4

5 STEP 2: DEVELOP YOUR INITIAL PAPERLESS POLICY In this stage, you ll want to create a written policy that managers and employees can refer to when they have questions about how this whole thing works. First (and most importantly), this policy should indicate who s in charge. The leader(s) of your paperless initiative should have the authority to bring about change in the organization, the patience to see a long project through to completion, and a willingness to experiment with new technologies. Depending on the size of your firm, these responsibilities might fall to your operations team. In a larger organization, it s probably a good idea to dedicate a manager to the cause full-time. Your paperless policy should also include a rough timeline. At what point do you expect to hit key milestones? This timeline will almost certainly shift, but it will give stakeholders a solid footing from which they can talk about the initiative and their needs. PRO TIP Remember, going paperless isn t one project it s a collection of smaller projects that will likely take months or years. Make sure your paperless leaders are keeping good notes and documenting the entire process. The last thing you want is a personnel departure sending you back to square one. Finally, your policy should seek to answer tough questions that are bound to come up during a major operations initiative. For example, if a disruption to normal operations is necessary in order to implement a new technology, how should that be handled by each department? If paperless processes make certain individuals jobs obsolete, will they be re-trained for other roles? Having these answers in writing at the outset will help insulate project leaders from potential pitfalls down the line. 5

6 STEP 3: SELECT A TECHNOLOGY VENDOR Whichever project you ve chosen to move forward with, the next step will be to choose which software and tools you ll be using to make it happen. This is a step you ll be repeating again and again as you bring new projects up to bat, so we ll give you our two cents about choosing paperless technology vendors in general. Choose vendors with wealth management experience. Some industries can afford to use non-specific paperless tools. Wealth management isn t one of these industries. Take document management for example. You could use a popular tool like Box or Google Drive, but you d be left trying to figure out for yourself how to make these tools compliant with SEC and FINRA regulations a process which isn t easy. Even if you could figure it out, are the enormous potential fines worth the risk? Alternatively, you could choose an industry-specific solution like Docupace, which has SEC and FINRA compliance built in. Choose as few vendors as possible. As we mentioned above, going paperless involves shifting over an array of individual paper-based processes to new digital ones. Theoretically, you could choose a different technology vendor for each one of these processes and many firms do. Each individual vendor might be low-cost or best-of-breed, but what you re left with is an ecosystem of technologies that don t play nicely together. Whatever gains you accrue by buying piecemeal will almost certainly be wiped out by the cost of creating custom integrations between each tool. In addition, if one vendor makes a change to their platform, it could have ripple effects that affect the entire ecosystem. Even if you re only planning on implementing one project at a time, consider whether a vendor offers additional services that will help with other projects on your wishlist. Choose vendors that integrate with each other. Speaking of integrations, when you re researching vendors remember that they ll eventually make up one cohesive ecosystem. A single paperless workflow, like opening a new account, will touch the CRM, a form fill out tool, an e-signature solution, a document management solution, and probably even more. Therefore, it s vital to choose technology vendors that have integrations in place with whichever services they don t handle in-house. It s also a bonus to choose vendors that are willing to develop new integrations as your needs change. 6

7 STEP 4: START WITH AN EASY WIN The smaller projects that make up a wealth management paperless initiative run the gamut of size, cost, and potential benefits. Examples include: Document edelivery Advisor onboarding Esignatures Advertising review Cloud-based document management Transaction processing Client onboarding Advisor transitions Which one do you start with? You might consider beginning with the project that will bring the greatest benefits to your firm in terms of cost reduction and efficiency. However, the magnitude of these benefits will likely be tied to project cost, difficulty, and implementation time. For firms that are starting from zero that is, coming from a completely paper-based office we recommend prioritizing a project that will improve the day-to-day lives of advisors and home office staff, but won t cost too much or take too long to implement. An easy win can help get employees on board, and you ll need their help later to carry more complex projects to completion. Easy wins also give senior leadership something to smile about. Which easy win you choose will depend on your firm s unique situation. Document e-delivery and e-signature are common choices, as they have long track records of success and written approval from the SEC and FINRA. 7

8 STEP 5: EDUCATE STAKEHOLDERS Now that you ve got a project in the works and a technology solution selected, you need to do your part to make sure employees, advisors, and other stakeholders are prepared for the changes that are about to take place. Though a new paperless process is designed to make life easier for employees and advisors, it necessarily requires changes to the way people do their work. Many advisors and employees have been doing things the same way for years, and have deep-set routines. So, they might push back or worse, just smile and nod, then keep doing things the old way. Carrots & Sticks Depending on your specific situation, it might also be necessary to incentivize change. Broker-dealers and RIAs are unique because they don t always have direct control over the individuals who drive revenue for their organizations. In order to motivate advisors to adopt paperless processes, you might do something like what Ameritas did and prioritize paperless business above paper business. Here are two best practices for educating stakeholders about new processes: Give them the why, not just the what. When people know the reasons for a major change, they re more likely to care about it and make it happen. Give them a place to voice their concerns and give feedback. Project leaders should respond to each and every one of these comments; employees might have insight into potential efficiencies that higher-ups have overlooked. 8

9 STEP 6: EDUCATE INVESTORS To meet your paperless goals, you ll need adoption from top to bottom. If clients say they want to keep doing things the old way, then that will filter up the chain through advisors to the home office, and you won t be able to realize the efficiencies you hoped for. For this reason, it s important to provide advisors with the educational materials they need to inform their clients about new processes. Given the right information, it shouldn t be too difficult to convince clients to get on board. According to Fidelity, more than 70% of advisors surveyed said their clients would be open to using paperless technologies including online forms, online statements, mobile account access, and using tablets during meetings. For the portion of investors who want to stick with paper, you ll need to continue to make those processes available. But the more investors you can get on board with paperless, the better your KPIs will look at the end of the day. 9

10 STEP 7: DEVELOP NEW WORK POLICIES One of the great indirect benefits of a paperless office is that it gives home office employees more flexibility. When you re not tied to paper files, you don t always need to be in the office to get your work done. 43% of American employees spend at least some time working remotely, according to a 2017 Gallup poll. Based on this and other data points, Gallup concluded that flexible scheduling and work-from-home opportunities play a major role in an employee s decision to take or leave a job. In other words, offering remote work opportunities to employees will help you attract, hire, and retain more high-quality home office employees. You might even consider taking on employees that work remotely all the time, or hiring consultants, contractors, or other temporary employees from outside your local area. If your firm decides to make these changes, you ll need to work with HR to develop reasonable policies surrounding them. The earlier you develop these policies, the better. Without a comprehensive policy, employees might take too many work-from-home days, or be afraid of repercussions and take none at all. 10

11 STEP 8: MEASURE IMPACT After you ve successfully implemented one project, start tracking those KPIs you ve established. If you re not hitting your goals, there could be several reasons why. Maybe you need to select a different technology vendor or improve education and training efforts. Maybe this one project won t reach its full effectiveness without more paperless processes to support it. In any case, continue to measure impact and make adjustments while you re choosing which project to tackle next. CONCLUSION When you re starting from scratch, going paperless can sound like one of those never-gonnahappen initiatives that s on everyone s wish list but no one s to-do list. However, with a robust, comprehensive paperless office strategy, your firm really can start realizing the incredible benefits that come along with going paperless. Following these steps to develop that strategy, any RIA or broker-dealer can get on the path to paperless while exposing their business to minimal risk. Docupace is the only paperless platform designed specifically for wealth management firms. Request Demo 11