The Importance of Document Management Systems in Wealth Management
A Document Management System (DMS) is a cloud-based storage solution that enables wealth management firms to transition paper forms and records into secure, digital files. It’s one of the most important parts of a paperless office strategy for broker-dealers and RIAs. In fact, industry experts and consultants are increasingly bringing up the importance of document management system for wealth management firms, citing growing compliance costs and risks, increase cost of overhead, and the need to adopt a end-to-end digital workflow solution.
Implementing a DMS will help streamline your firm’s workflows and provide measurable results for your business. As part of a larger paperless office strategy, a document management system will let you take advantage of the many benefits of going paperless, like reduced costs, increased compliance, and more streamlined operations.
Let’s explore some of the reasons why implementing a DMS is a necessary step for competitive wealth management firms.
When you’re face to face with an SEC, FINRA, or state audit, a good DMS makes the process faster and simpler.
Document management systems are designed to make document retrieval easy. When an auditor asks for a specific document, you can search for it and pull it up instantly. Don’t make your employees spend their valuable time trawling through the file room — instead, just deliver a complete package of digital documents to the auditor.
By removing manual operations from the audit process, paperless wealth management firms have been able to significantly speed up audits, reducing business disruption and keeping all parties happy.
One of the most important advantages of document management systems is their sophisticated security controls.
Access to important documents can be assigned on an individual basis by the administrator. With this system, you’ll no long rely on the “key to the filing cabinet” as the ultimate access point to your firm’s confidential files. Instead, a nuanced set of permissions within the DMS makes it easy to protect the integrity of records and the privacy of clients.
When it comes to security, it’s necessary to choose a DMS that’s designed specifically for your industry. That way, you can be confident that built-in security controls will match the requirements set forth by relevant regulatory agencies.
Wealth management-specific document management systems like Docupace are designed to make compliance with SEC and FINRA regulations easy. By ensuring your files are electronically stored in such a way that they’re non-rewritable and non-erasable, these document management solutions comply with industry-specific write once, read many (WORM) rules.
A good DMS will also include software designed to identify any suspicious behavior occurring within the system. If it suspects something is wrong, the system will alert administrators to the problem. When documents go missing or are edited in a suspicious manner, you’ll know right away and have a clear bread crumb trail to follow. This feature is sure to come in handy for maintaining compliance and avoiding lawsuits.
Reduced Risk of Data Loss
Just like popular consumer document solutions, wealth management-specific DMS solutions allow users to see past versions of documents. If a change was made in error, it’s simple to just go back to the correct version. In addition, authorized administrators can see which users made which changes.
Electronic document storage is also a safeguard against disasters. Fires and floods can wipe out paper records, which can be extremely costly for investment firms. When your documents are backed up in a DMS, it’s much easier to get back to business as usual.
Unlocking the Paperless Office
Document management systems are a necessary part of a complete paperless office strategy. Having a cloud-based document storage system enables several parties to collaborate seamlessly, without the delays of paper-based processes like snail mail and fax, and without the regulatory risks of other paperless communication methods.
With a document management system in place, broker-dealers and RIAs can enable workflows that connect advisors to the back office, and the back office to clearing houses and custodians. New account opening and maintenance, client onboarding, and even advisor transitions can all be simplified.
With a DMS in place, broker-dealers and RIAs can work faster and more efficiently. Bottom lines will improve as firms are able to do more work in less time and commit far fewer compliance violations.
Paperless solutions are increasingly being viewed as a necessity for competitive wealth management firms. Therefore, finding a DMS that fits the needs of your business and upgrading to a paperless office should be a top priority.
Want to learn more about how Docupace can help your wealth management firm stand out from the rest? Contact us today for more information!
Discover the Benefits of a Paperless Office
More and more wealth management firms are migrating to digital operations. We’ve put together everything you need to know about the why and how of going paperless for broker-dealers and RIAs.Learn More!