Independent broker-dealer Transamerica Financial Advisers Inc. is rolling out a soup-to-nuts paperless document management and e-signature system called TFA Synergy, and some advisers who have used it report that it saves time dramatically.
The system is in piloted use among the Los Angeles-based firm's top 200 producers and is being used for paperless account opening, document management and imaging. It should be available to all the firm's advisers later this year.
Representatives and advisers who use the system can sign up a new client or handle other paperwork digitally without printing any paper.
"Unlike other firms that might have spent many millions building a paperless platform from the ground up, we went out and found existing best-of-breed applications from established vendors," said Dan Trivers, chief operating officer of Transamerica Financial Advisers. "In addition to the human re-sources component — which was considerable — we've invested $2 million in licensing fees, customization of existing applications and integration."
Each adviser is set up with an Interlink, a web-connected signature pad that records the pressure and velocity of the signature so that clients sign on the non-dotted line electronically.
"There's very little stopping lots of entities [from] doing this," said Jon Neiditz, an attorney in Atlanta with Nelson Mullins Riley & Scarborough LLP, and co-leader of its information management practice. Nelson Mullins Riley frequently works with the Atlanta-based Financial Services Institute Inc. to educate firms on the process of going paperless and explain its various legal ramifications.
"Those with the most to gain in going paperless are parties with lots of repetitive transactions that are extraordinarily similar. Going paperless with these kinds of activities can save you a lot of money," Mr. Neiditz said.
"Lots of life insurers, other insurers, banks, mortgage companies — any financial services company dealing with a lot of [traditionally paper] applications and the like are interested," he said.
According to Mr. Neiditz, many firms are adopting the 80-20 rule and putting most of their activities and documents into a paperless system to reduce costs. But for many, it makes sense to continue with a paper-based system for 20% of their documents, simply because it is the most cost-effective approach.
INITIAL PROBLEMS
Anthony Petsis, a chartered financial consultant and independent adviser who has been affiliated with Transamerica Financial Advisers for 20 years and has been involved with the rollout for the past nine months, said that there were plenty of problems with the system initially.
"There were some bumps, but that's the challenge with new technology. Somebody has to change the way they are doing things, and that's never easy," said Mr. Petsis, whose name was provided to
InvestmentNews by Transamerica Financial Advisers.
"The point is, we do all of our new-business processing through the system, and it has become incredibly easy to use," he said. He has $100 million in client assets in custody with Transamerica Financial Advisers.
"We've gone from at a minimum of two days, if we'd done everything exactly right prior to the new system, to 60 minutes. We can open an account remotely and get approval within an hour," Mr. Petsis said.
"The advantage is, I don't have as much paper to push and I can spend more time with clients," he said.
Stephen H. Wagner, a certified financial planner and principal of Wagner Financial Group of Ventura, Calif., which has $75 million in assets under management with Transamerica Financial Advisers, said that the improvement in turnaround time for conducting business is the most important aspect of the system.
'WORTH EVERY PENNY'
"We spend about $250 a month for a wide array of technology services we receive from TFA, and this is just one part, but it is worth every penny," he said.
Mr. Wagner, who has been an affiliate of Transamerica Financial Advisers since 1993, said that in addition to the TFA Synergy platform, he also gets the account aggregation services of Albridge Solutions Inc. of Lawrenceville, N.J., as part of the fee.
Because the system is new, neither Transamerica Financial Advisers nor any of its advisers was able to quantify their cost savings.
But to illustrate the potential of such a system, consider the experience of Todd Battaglia, a partner with Meg Green & Associates in North Miami Beach, Fla. His firm went through the process of implementing a document management system nearly three years ago.
His firm is affiliated with broker-dealer Royal Alliance Associates Inc. of New York and isn't connected to Transamerica Financial Advisers.
The financial planning and investment management firm, which has 500 clients and manages $600 million in assets, spent two months that summer scanning in its 2,000 paper client files. They bought a server, two scanners and document management software from Laserfiche of Long Beach, Calif., spending about $10,000.
Continuing licensing for the software costs $3,000 a year, but in the end, the firm was able to avoid hiring another operations person — a move that would have been needed to handle the firm's additional growth.
That savings represents between $35,000 and $40,000 a year. In addition, the firm saved $8,000 a year by turning a former filing cabinet storage room into office space for an additional adviser.
E-mail Davis D. Janowski at [email protected].
