There’s a big change coming in wealth management. We’re on the precipice of the biggest transfer of wealth in history, and most industry players are lagging behind consumer preferences.
You know the story; we’ve been talking about it for years. As baby boomers leave money to their children, financial advisors and broker-dealers must be prepared to meet changing investor expectations.
Younger investors are more tech-savvy, more engaged, and less likely to rely on traditional advisory practices than their parents. Millennial and Gen Z clients want a wealth management experience that’s highly interactive, where they can consume advice and direct their accounts using digital channels.
Unfortunately, a majority of broker-dealers and RIAs just can’t offer them what they want.
Waiting on the industry to change
The wealth management digital experience is seriously lacking at most firms. That may sound like an unfair blanket statement, but the numbers speak for themselves.
The wealth management industry is aging
Wealth managers are concerned about staying relevant, and rightfully so. There is a growing gap between advisor and investor age cohorts, with only 11.7% of U.S. financial advisors under age 35.
At the same time, traditional advisory firms face increased competition from Silicon Valley, self-directed brokerage accounts, and robo-advisors. In the coming years, broker-dealers and RIAs must support advisors with seamless UX-focused digital experiences in order to compete with these challengers and retain their clients.
Easier said than done
There are many reasons why it’s been difficult to bring wealth management into the 21st century. Regulations that prevent firms from taking advantage of emerging technologies are a popular target of blame.
In addition, many smaller firms find that cost is a roadblock to digitization. Thin margins make finding capital to build a platform from scratch difficult. At the same time, firms that do implement digital processes often find that advisors (and back office employees) don’t use them to their full potential.
Of course, none of this matters to the end user, as a group of Deloitte analysts write very cogently in a recent report:
“Clients don’t see or care about the internal obstacles of legacy IT systems, cost-intensive regulatory compliance, or various other possible limitations to a digital transformation of the financial industry. All they might notice are, e.g., slow and inadequate user interfaces, a lot of personally irrelevant information, user-unfriendly support, inadequate services, or the lack of timely responses while being used to smarter solutions and approaches from other industries.”
In other words, firms have to start pushing digital experience through to their advisors by any means necessary if they want to stay competitive.
How we’re helping transform the industry
Docupace understands the challenges associated with digitization. We’ve helped leading wealth management firms implement digital operations to expedite account opening and create digital experiences that exceed client expectations.
For example, with Docupace Start, firms can create simple, branded, formless workflows to help advisors onboard new clients. Backed by paperless processing, SEC-compliant document management, and esignature tools, investors can open accounts in minutes, with no paperwork and no time-consuming errors.
As investor preferences change, so too will the role that advisors play in the wealth management ecosystem. Firms that drive digital experience to the core of the business will be in the best position to weather major shifts and stay competitive — for this generation and beyond.
We are excited to share that Docupace was selected as a finalist in the WealthManagement.com 2020 Industry Awards (the “Wealthies”) within the Document Management Category for our Regulation Best Interest (Reg BI) solution. The awards program received 625 entries from 221 companies this year, and 155 organizations were selected as finalists.
The industry awards honor outstanding achievements by companies, organizations, and individuals that support financial advisor success. Congratulations to all the firms and people that were selected as finalists and thanks to our amazing customers for their partnership and support.
All the major in-person activities will all be held as virtual events—including the September 10th awards presentations traditionally held in New York City. The virtual events will open up attendance opportunities to a much broader audience, and with it bring more transparency to the industry.
WealthManagement.com Awards Application Details
Often, companies get nominated, and the details of award submission get left out. I want to take the opportunity to share the details of the application. If you have any questions, please feel free to contact me. I’d love the opportunity to speak with you about how we can help your firm succeed.
Category: Technology Providers – Document Management
Nomination Title: Reg BI Integrated Tool (Tracker BI)
New Initiative Description:
Customers of Docupace’s Document Management solution can leverage the integrated capabilities of Reg BI tool called Tracker BI per below.
- Docupace’s Tracker BI allows financial advisors to simply and quickly send and track delivery of Form CRS and other regulatory disclosures to investors by mail, electronically, or in-person.
- Tracker BI provides end-to-end processing, tracking, storage, and audit functionality to meet Regulation Best Interest (Reg BI) requirements.
- With a centralized and secured cloud-based product for managing Reg BI compliance, broker-dealers, RIAs, and advisors can simplify Reg BI requirements with electronic delivery, workflow automation, compliant storage, digital experience, and acknowledgment capabilities.
New Initiative Goals:
- Provide a simple and cost-effective Reg BI solution for advisors and firms to distribute, track, and store disclosures, including Form CRS and other disclosure, including eDelivery consent.
- Provide a mobile experience.
- Solve a complex and regulatory requirement for all SEC firms with a simple and cost-effective solution.
- Provide advisors and investors with the ability to send and review disclosures remotely.
- Accelerate the ability of the financial advisors to close new business by providing the ability to immediately deliver the required disclosures.
- Reduce the cost of compliance auditing by providing centrally managed Reg BI system.
New Initiative Results:
Using Tracker BI:
- Advisors, on average, will spend 65% less time processing disclosures.
- Investors can receive disclosures instantaneously with a better digital experience.
- Advisors and investors both will save time and effort by sending and reviewing disclosures remotely.
- Advisors will save about 85% of their time per disclosure by processing electronically vs physically.
- Advisors will have on average savings of $4 per disclosure (electronically).
Impact and contribution to the success of the financial advisor community:
By using Tracker BI, the financial advisor community can:
- Minimize the increase in the time and effort needed to meet Reg BI compliance.
- Reduce the overhead needed for compliance by simplifying the process and providing robust tracking and audit capabilities.
- Reduce manual processes in order to track their activities, therefore getting more time to serve their clients.
- Reduce expenses associated with printing, mailing, faxing, filing, records maintenance, and data entry.
- Keep an audit trail to prove that they are in compliance with the distribution and tracking of regulatory disclosures.
In more than 20 years in the financial services industry, I’ve worked as a Certified Investment Management Analyst®, served as president of 1st Global, and Chaired the Financial Services Institute (FSI) Board of Directors. Now I have the pleasure of taking over the role of CEO at Docupace.
I care deeply about the wealth management industry and its future, and I’m glad to be in a position where I can help guide that future. I look forward to using my experience to drive success for Docupace and our clients.
Facing unprecedented challenges
It has to be said that I’m taking the reigns at Docupace at an exceedingly challenging time — for both the wealth management industry and the world at large.
Before COVID-19, we were already on the precipice of the largest transfer of wealth in history and facing unprecedented disruption from technology, massive consolidation within the industry, and new regulatory challenges like Reg BI.
Now we’re also contending with widespread workplace disruption due to the pandemic, including a sudden shift to remote work that isn’t likely to go away anytime soon (If you believe an April 2020 survey from Aite Group, as many as 22% of jobs at financial institutions probably won’t come back into the office).
Meanwhile, cyber criminals aim to capitalize on the upheaval, particularly the gaps in security that can result from remote work. Attacks on banks and other financial institutions spiked by 38% between February and March, prompting government agencies like the New York State Department of Financial Services to release pandemic-specific cybersecurity guidance.
In addition, even as states begin to reopen, unprecedented unemployment levels and rising household debt are indicative of the impending economic downturn — one that will no doubt impact broker-dealers and RIAs in one way or another.
Driving industry transformation
No one has ever accused the wealth management industry of being nimble and quick to change. But if this global crisis has taught us anything, it’s that change is not an option; it’s an urgent need.
I truly believe that the answer to many of the wealth management industry’s biggest problems lies in embracing digital operations and driving it to the core of the business.
Docupace’s goal is to help our customers do just that: support true digital transformation by continuously improving our core products, bringing new and innovative solutions to market, and doubling down on our commitment to customer success.
Here are just a few of the ways Docupace has stepped up our commitment in the last year:
- Launching Docupace Start for formless client onboarding
- Launching Tracker BI for simplified Reg BI compliance
- Offering Digital Adoption Bundles to help firms digitize in this challenging climate
- Offering Digital Operations solutions to help firms reduce risk in any climate
When it comes to digital operations in wealth management, Docupace is the pioneer. And now it’s time to push for even more innovation.
My vision for Docupace is to fully embrace digital operations, preparing ourselves and our clients to face future disruptions gracefully and come out on top. I’m confident that Docupace will continue to make a positive impact on our users — including back-office employees, advisors, and investors.
Whether you’re a current Docupace customer or considering us as your partner in transforming your back office, I’d love the opportunity to speak with you about how we can help your firm succeed. If you have any questions, concerns, or ideas, please feel free to contact me.
Wishing you health, safety, and luck,
[Note: The letter below was sent to all Docupace employees on the Monday following George Floyd’s murder. As we feel strongly that this issue deserves everyone’s attention, we are sharing our communication publicly.]
My fellow Docupacians,
I didn’t want more time to pass before I spoke up about the events of last few weeks. I am horrified and saddened by the murder of George Floyd and the events that have transpired in the past weeks serve as reminder, at least to me, that despite the work we have already done, we have much more work to do as a nation, together, to heal and to love our neighbors as ourselves.
I would be lying to you if I said I wasn’t scared. I’m scared because like so many people from the white community, speaking up about race is uncomfortable. Is it my place? Do I have the right words? What do I say?
I’m scared because I am watching communities be torn apart and I don’t yet know if this is what causes us to finally take meaningful steps or the widening of an already-too-wide divide.
I’m overwhelmed by what I don’t know to say, to do, to change. But I do know this, I cannot stay quiet and hope things get better. I cannot stay inactive and hope things get better. And I know that your voice, when combined with mine, is louder, and your acts combined with mine, go farther.
I encourage you to take two steps with me:
First, open yourself to talking. It can be as simple as saying, “I need you” and “I’m with you” to those in your circle of co-workers, family and friends who need to hear it right now. I encourage you to talk, and to listen, without judgement to the people around you whose life experience enriches yours because it is different.
Second, help me take action. One of the many causes behind the institutional nature of racism in America is that the “bootstraps” argument for achieving the American dream is too simplistic. Of course, effort should be rewarded in life. Every one of us is here in this organization because we earned the right to be here, but the paths we followed were widely divergent, and some were far harder than others because of the color of our skin or our gender or who we love. Until we acknowledge this, we will never begin to create the land of equal opportunity promised to all of us and that we have in our collective power to create.
Today I will start small and local to make a difference in a way that honors who we are as Docupacians. Teens Exploring Technology (TXT) is a non-profit organization that helps inspire young men of color from low income communities in Los Angeles to pursue careers in technology or as technology entrepreneurs. TXT serves 1,500 students annually and 95% of the graduates from their programs attend 4-year universities, with 75% majoring in computer science. By supporting TXT as Docupacians, we can take one small step in leveling the playing field for low-income communities of color and open doors to the incredible careers in technology that have enriched our own lives. For each dollar Docupacians donate to TXT, I will personally match them dollar for dollar up to $5,000 and Docupace will match them two dollars for every dollar up to $10,000. $1 of your contributions creates $3 more dollars to support this worthy cause.
Be courageous. Be vulnerable. Be empathetic. Take action. Black lives matter.
Under SEC Regulation Best Interest (Reg BI), broker-dealers and financial advisors must place the best interests of their customers (retail investors) ahead of their own.
Reg BI includes a variety of new rules and obligations, but the most tangible is a paperwork requirement: Form CRS.
What is Form CRS?
Form CRS is a relationship summary disclosure form (“CRS” stands for customer or client relationship summary).
As part of their disclosure obligations under Reg BI, broker-dealers and financial advisors are required to share versions of Form CRS with retail investors beginning in the summer of 2020.
For a more in-depth explanation, see Electronic Delivery & Storage of Form CRS: The Key to Simpler Reg BI Compliance.
What is the purpose of Form CRS?
According to the SEC, the main purpose of Form CRS is to provide retail investors with “simple, easy-to-understand information about the nature of their relationship with their financial professional,” in order to help them compare services between firms and make more informed decisions.
What must be included in Form CRS?
Specific requirements vary based on the services provided by the firm, but at a minimum, Form CRS must include:
- Firm registration information (including whether the firm is registered as a broker-dealer, investment advisor, or both)
- A description of all services offered by the firm
- Information regarding fees and costs (including principal fees and costs, custodian fees, account maintenance fees, and others)
- Information regarding conflicts of interest
- A summary of the firm and advisor’s disciplinary history
- “Conversation starters” for customers to ask their advisor or point of contact
When do firms have to send Form CRS?
Firms must deliver Form CRS to all of their existing customers within 30 days of their compliance date, which is currently June 30th, 2020.
From that point forward, Form CRS must also be shared with customers and prospective customers before or at the earliest of:
- Entering into a new investment advisory contract
- Opening a new account
- Making recommendations regarding investment products, strategies, or account changes, including retirement rollover
Firms must also provide Form CRS upon client request, and whenever amendments or updates are made to the content of Form CRS.
How can I learn more about Form CRS?
If you still have questions about Form CRS, here are a few helpful resources:
- Full Form CRS guidelines from the SEC
- Form CRS summary and FAQ from the SEC
- Reg BI and Form CRS checklist from FINRA
Additionally, small firms may send implementation questions to the newly established inter-divisional Standards of Conduct Implementation Committee at IABDQuestions@sec.gov.
First, we would like to share our best wishes towards everyone’s health and safety as we work through the challenges of the COVID-19 setback. Most importantly, we send these wishes with a commitment that we will work together to support each other in this unprecedented window of time. At Docupace, we are committed to the thesis that our best opportunity to minimize the long-term effect in our market is to band together as a Wealth Management Industry Team. In that regard, we would like to show our commitment by supporting the Team early.
Over the past three weeks, we have heard compelling stories from Customers and Partners about how users have been able to process unprecedented numbers of investment-related transactions completely remotely using digital solutions. In some cases, we have heard of organizations achieving all-time productivity highs, without a single person in the office.
At Docupace, we received this as a clear signal that digitizing as many elements of your operations as possible, creates a very powerful and adaptable Business Continuity Plan.
Docupace is pleased to have the strength and resources to take the lead on this important Wealth Management Industry Team initiative. Effective today, we are announcing a series of Digital Adoption Bundles that lower the cost and barriers to digitizing your environment. The summary of our Digital Adoption Bundles for Q2 2020 include:
- Docupace Professional Services fees for current customers are reduced by 25%
- Docupace Platform customers receive unlimited new user licenses for both Advisors and Back Office staff at no additional cost. New customers receive free 90-days of unlimited user licenses or 25% reduced Professional Services fees
- Docupace Advisor Transitions system setup reduction of 40% with a minimum committed number of transition
- Docupace online and custom training is reduced by 50%
- Docupace Document Management available for 3 months free with reduced monthly user licenses for RIAs
- Quik! digital forms are offered with a 90-day free license and free form updates for new customers. Existing customers are eligible for 50% reduced form updates
- SIGNiX electronic signatures are offering 100 free envelopes for new customers
- OS33’s Workplace Frontline Cybersecurity is offered with a 90-day free license
- WalkMe’s Digital Adoption Platform is being offered with 90-day free on an annual license order including 5 free pre-packaged walk-throughs at no cost
- Beacon Strategies is offering a 40% reduction in consulting fees for optimizing business processes and digital adoption strategies
I hope that everyone will be able to consider banding together as a Wealth Management Team and receive our Digital Adoption Bundles in the positive spirit in which they are offered. Our sincere thanks to all of our Partners who have joined the Team early.
If you are a current Docupace Customer, your Account Manager will be in touch quickly to review whether any of these bundles could be of interest. For those who are unsure of your contact, and have an interest, please contact us at docupace.com/contact.
As always, we are very interested in hearing from all of our Customers, Partners, Prospects, and Friends. Please feel free to contact us at any time.
Our best wishes for continued health and success,
Cybersecurity is a hot topic in the wealth management industry, but in all the conversation about major breaches and new security paradigms, one audience is usually left out: small broker-dealer firms and RIAs.
90% of broker-dealers have fewer than 150 financial advisors. For obvious reasons, these firms often trail their larger counterparts in security maturity. Unfortunately, that doesn’t mean cyber criminals and regulators will take it easy on them.
Docupace recently attended the 2020 TD Ameritrade LINC Conference in beautiful Orlando, FL.
It was a well-organized, well-executed conference, with valuable opportunities to hear from presenters and other attendees alike.
We had the chance to make some great new contacts, visit with existing clients and new partners like Orion and Wealthbox , and learn from informative workshops and panels.
Here are a few of the topics people were buzzing about on the conference floor, as well as in the keynotes and breakout sessions:
The FSI OneVoice Conference is always one of the highlights of our year, and the 2020 conference in San Diego was no exception!
We attended informative panels and workshops, made incredible new connections, and hosted a dinner at Tom Ham’s Lighthouse , where we had fun chatting with clients like M Financial Group.