Alleviating financial advisers' pain with account openings

Alleviating financial advisers' pain with account openings
The traditional process of signing on clients takes too long, unlike their online counterparts.
AUG 17, 2016
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." COMPLYING WITH DOL 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.

Latest News

JPMorgan tells fintech firms to start paying for customer data
JPMorgan tells fintech firms to start paying for customer data

The move to charge data aggregators fees totaling hundreds of millions of dollars threatens to upend business models across the industry.

FINRA snapshot shows concentration in largest firms, coastal states
FINRA snapshot shows concentration in largest firms, coastal states

The latest snapshot report reveals large firms overwhelmingly account for branches and registrants as trend of net exits from FINRA continues.

Why advisors to divorcing couples shouldn't bet on who'll stay
Why advisors to divorcing couples shouldn't bet on who'll stay

Siding with the primary contact in a marriage might make sense at first, but having both parties' interests at heart could open a better way forward.

SEC spanks closed Osaic RIA for conflicts, over-charging clients on alternatives
SEC spanks closed Osaic RIA for conflicts, over-charging clients on alternatives

With more than $13 billion in assets, American Portfolios Advisors closed last October.

William Blair taps former Raymond James executive to lead investment management business
William Blair taps former Raymond James executive to lead investment management business

Robert D. Kendall brings decades of experience, including roles at DWS Americas and a former investment unit within Morgan Stanley, as he steps into a global leadership position.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.