Alleviating financial advisers' pain with account openings

The traditional process of signing on clients takes too long, unlike their online counterparts

Aug 18, 2016 @ 12:27 pm

By Alessandra Malito

Account opening can be a time-consuming obstacle for advisers, but software companies are attempting to ease the pain.

What takes only a few minutes for robo-advisers to do could take hours, and a lot of paperwork, for financial professionals when it comes to signing on a new client. With tools such as e-signatures and pre-populated information flowing between systems, though, advisers and their clients may steer clear of the headaches that ensue from archaic account opening processes.

"Opening accounts and onboarding is a perennial pain point everyone is trying to solve," said Patrick Yip, director of advisory market technology strategy at Pershing, adding that incomplete information, too much paperwork and the back and forth of signing are a few of the hiccups advisers suffer. "All of the above create not a very good experience."

Automation is the key to fixing account opening hardships, and financial institutions and software vendors are eyeing what they can do next. Vanare, a wealth management technology vendor, this week teamed up with Redtail Technology, a client relationship management software provider, to sync client information from the CRM to Vanare's two platforms, its adviser-only robo-adviser, NestEgg, and its account opening platform, Spark.

Not only will the pair's connection eliminate the stacks of documents advisers need to print out, said Rich Cancro, chief executive of Vanare, but it will help advisers keep track of their information.

But the industry as a whole has to go a step farther, said David Edwards, president of Heron Financial Group. Software vendors are automating the procedure of all of these forms, but custodians should clean up the way advisers must deliver these forms to their clients or prospective clients. He said he has lost a couple of clients after weeks of working with them and preparing a financial plan and account documents.

"There are software vendors that are automating the stupid procedure," Mr. Edwards said. "But I still have a horribly ugly thing to deliver to the client."


In the meantime, better account opening practices will become even more crucial for advisers, especially as they prepare to comply with the Department of Labor's fiduciary rule, which requires advisers to act in their clients' best interest on retirement accounts. Advisers' success in being squared away with the regulation will rely heavily on the technology they use, various advisers said.

"The DOL is going to impact account opening because it will add paperwork," said Chip Kispert, managing partner of broker-dealer consulting firm Beacon Strategies. "We see this as an opportunity to utilize the basis of the DOL to upgrade their account opening or workflow processes for paperwork."

More automated services will pop up to incorporate the rule, he added. Documentation and efficient workflows are just two of the ways vendors are tackling the requirements.

Advisers who follow a paperless processing mentality may find more efficiency in their practice as well. Laser App Software is a company that houses a library of forms for all financial institutions so that advisers can use pre-filled documents with their existing client data that flows from other software vendors.

Chad Chubb, founder and adviser at WealthKeel in Philadelphia, follows a paperless route for his registered investment advisory firm. He uses Laser App as well as DocuSign to send it over to his clients. In just a matter of a few clicks, the account is ready to be opened.

One of the biggest challenges of account opening is the fact that there are so many different types of accounts that can be opened, and advisers are usually working with numerous custodians. Pershing's Mr. Yip said consolidating custodians would make the process simpler, but if that's not an option, adopting electronic signatures whenever possible would improve the procedure as well.

Robo-advisers differ from this because they can open limited types of accounts, said Robert Powell, vice president of sales and marketing at Laser App. Though what they do is not as complex as what advisers may do, they are pushing the industry forward.

"They are making everyone pay attention to how we can make our process better," he said.


What do you think?

View comments

Recommended for you

Upcoming Event

May 14


Retirement Income Summit

Join InvestmentNews at the 12th annual Retirement Income Summit - the industry's premier retirement planning conference.Much has changed - and much remains to be learned. Attend and discuss how the future is full of opportunity for ... Learn more

Featured video


4 secrets to adviser growth: Client experience

The client experience is critical for firms to thrive today. This is especially true for your wealthiest clients. SEI's John Anderson and Allie Carey offer some strategies for success.

Latest news & opinion

Top 10 RIAs in the Northeast

These are the largest registered investment advice firms in the Northeastern U.S., in terms of assets under management.

10 predictions for financial advice in 2019

Deloitte expects these 10 changes will hit the financial advice business in 2019.

Midwestern magic? RIA assets soared nearly 30% there last year

Theories for what's driving the growth spurt abound, but it surpassed all other regions of the country.

8 apps advisers love for getting stuff done

We reached out to advisers to find out which apps they are using to run their business more efficiently.


Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting It'll help us continue to serve you.

Yes, show me how to whitelist

Ad blocker detected. Please whitelist us or give premium a try.


Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print