Enhanced Security

Some cloud-based storage options use government-grade encryption to secure data and prevent breaches. Access can be carefully controlled in ways that aren’t possible with paper documents, such as ensuring only designated employees can see or edit certain forms and documents.

In addition, these document digitization services can scan for malicious activity while tracking all access and edits to documents, or simply make it impossible for edits to take place at all – a necessary component of any functional paperless office.

Many people immediately think of data breaches when they think of cloud storage, but the truth is that paper-based processes are much less secure than most paperless ones. File cabinets can be broken into, documents left out on desks or in bags can be stolen, and items can get lost in the mail. All of these risks are eliminated by going paperless.

Cost Reduction

Because paper is such an ingrained part of the business, you might not consider how much it actually costs.

There’s the cost of the paper itself, which is expected to rise significantly. Then there’s the cost of printers, toner, and maintenance. File cabinets and the space they take up in an office must also be considered. Finally, you have all of the little accoutrements like file folders, pens, paper clips, and staples. The cost of all of this paper-based infrastructure can add up fast.

Maintaining paper documents also leads to several indirect costs. For one, it’s extremely labor-intensive. Employees must spend time printing, collating, and filing, which takes time away from revenue-driving tasks. Furthermore, when it comes time to change office space, all of these paper documents must be moved, which makes relocation more expensive.

Going paperless eliminates most of these costs. For large organizations, the total cost savings could be huge — enough to launch that initiative that’s been sitting on hold for years, or even give everyone a nice bonus.

Faster Client Onboarding and Transaction Processing

Digital document services designed for wealth management firms make it easier for advisors to open accounts and onboard new clients.

Paperless document systems enable client data to be imported from CRMs and other systems. This data is then automatically populated across all relevant fields, dramatically reducing the amount of manual work required for advisors. In addition, electronic signatures make it simpler for advisors to get sign-off from their clients.

Some paperless onboarding platforms also include built-in compliance tools. This helps to prevent NIGOs, which affect around 40% of paper-based submissions for some firms.

Going paperless also eliminates the mailing and faxing required by paper-based processes. Paperwork can be signed, recorded, processed, confirmed, tracked, and transmitted within minutes instead of days.

Easy Audits

One of the major advantages of a paperless office is the ability to effortlessly survive an audit.

When it comes to complying with regulations, paper documentation presents several potential pitfalls. Paper documents are more likely to be misplaced or lost. It’s also time-consuming for staff to compile all the paperwork requested by an auditor.
All of this can complicate or delay audits, frustrating auditors and putting firms in a precarious position. A paperless system eliminates these problems by making document retrieval as simple as searching a database.

Secure cloud storage ensures that documents can be easily recalled. You can call up whatever documents are requested by auditors in a matter of minutes, instead of the hours that physically pulling these files manually might take. All of this reduces disruptions to your workplace while making the auditor’s job easier. For firms that make the switch, the importance of document management systems usually becomes abundantly clear after the first audit.

Reduced Administrative Needs

Shifting to a paperless office also helps firms allocate resources more effectively. Administrative staff who currently spend a large portion of their time printing, copying, filing, or faxing documents can be reduced or shifted to revenue-driving roles.

In addition, paperless systems give advisors more visibility into the status of their business, greatly reducing the amount of phone calls coming from the field. Plus, thanks to paperless communication technologies, some firms that have gone paperless have reported eliminating their mailroom and call center altogether.

More Convenient Day-to-Day Operations

When documents can be accessed from any location with internet access, firms and employees gain much more flexibility. In a paperless office, back office staff have the ability to work from home. In addition, remote employees and out-of-town consultants can be used in ways that would have been impossible with a paper-based office.

For most broker-dealers and RIAs, a paperless office offers a quick return on investment that will continue to pay dividends over time. It’s not simply about keeping up with trends. Paperless processes serve to streamline operations and reduce labor and compliance costs, all while enabling firms to scale rapidly.

Step 1: Set Empirical Goals for Your Paperless Initiative

This is business 101 stuff, so we won’t dwell on the topic, but suffice it to say that you can’t judge the success or failure of your efforts to go paperless if you don’t have specific goals in mind.

According to TD Ameritrade, technology represented the biggest increase of any spending category for RIAs in 2017. If history is any indicator, large technology expenditures are usually followed by periods of self-reflection, when executives and board members review their spend to determine which expensive hardware and software solutions they can send to the chopping block.

If you want your paperless office strategy to survive, you’ll need specific, reasonable goals and achievable results that can stand up to scrutiny.

Possible KPIs for your paperless office strategy:

• Spend on paper and other office supplies
• NIGO rate
• New advisors recruited
• Average account opening time
• Advisor satisfaction

Step 2: Develop Your Initial Paperless Policy

In this stage, you’ll want to create a written policy that managers and employees can refer to when they have questions about “how this whole thing works.”

First (and most importantly), this policy should indicate who’s in charge. The leader(s) of your paperless initiative should have the authority to bring about change in the organization, the patience to see a long project through to completion, and a willingness to experiment with new technologies.

Depending on the size of your firm, these responsibilities might fall to your operations team. In a larger organization, it’s probably a good idea to dedicate a manager to the cause full-time.

Your paperless office policy should also include a rough timeline. At what point do you expect to hit key milestones? This timeline will almost certainly shift, but it will give stakeholders a solid footing from which they can talk about the initiative and their needs.

Finally, your policy should seek to answer tough questions that are bound to come up during a major operations initiative. For example, if a disruption to normal operations is necessary in order to implement a new technology, how should that be handled by each department? If paperless processes make certain individuals’ jobs obsolete, will they be re-trained for other roles? Having these answers in writing at the outset will help insulate project leaders from potential pitfalls down the line.

Step 3: Start with an Easy Win

The smaller projects that make up a wealth management paperless initiative run the gamut of size, cost, and potential benefits. Examples include:

• Document delivery
• Esignatures
• Cloud-based document management
• Client onboarding
• Advisor onboarding
• Advertising review
• Transaction processing
• Advisor transitions

Which one do you start with? You might consider beginning with the project that will bring the greatest benefits to your firm in terms of cost reduction and efficiency. However, the magnitude of these benefits will likely be tied to project cost, difficulty, and implementation time.

For firms that are starting from zero — that is, coming from a completely paper-based office — we recommend prioritizing a project that will improve the day-to-day lives of advisors and home office staff, but won’t cost too much or take too long to implement. An easy win can help get employees on board, and you’ll need their help later to carry more complex projects to completion. Easy wins also give senior leadership something to smile about.

Which easy win you choose will depend on your firm’s unique situation. The many advantages of electronic signatures make them a popular first-project choice.

Step 4: Select a Technology Vendor

Whichever project you’ve chosen to move forward with, the next step will be to choose which software and tools you’ll be using to make it happen.

This is a step you’ll be repeating again and again as you bring new projects up to bat, so we’ll give you our two cents about choosing paperless document management technology vendors in general.

Choose vendors with wealth management experience.

Some industries can afford to use non-specific paperless management tools. Wealth management isn’t one of these industries.

Take document management for example. You could use a popular tool like Box or Google Drive, but you’d be left trying to figure out for yourself how to make these tools compliant with SEC and FINRA regulations — a process that isn’t easy. Even if you could figure it out, are the enormous potential fines worth the risk?

Alternatively, you could choose an industry-specific solution like Docupace, which has SEC and FINRA compliance built in.

Choose as few vendors as possible.

As we mentioned above, going paperless involves shifting over an array of individual paper-based processes to new digital ones. Theoretically, you could choose a different technology vendor for each one of these processes — and many firms do.

Each individual vendor might be low-cost or best-of-breed, but what you’re left with is an ecosystem of technologies that don’t play nicely together. Whatever gains you accrue by buying piecemeal will almost certainly be wiped out by the cost of creating custom integrations between each tool. In addition, if one vendor makes a change to their platform, it could have ripple effects that affect the entire ecosystem.

Even if you’re only planning on implementing one project at a time, consider whether a vendor offers additional services that will help with other projects on your wishlist.

Choose vendors that integrate with each other.

Speaking of integrations, when you’re researching vendors, remember that they’ll eventually make up one cohesive ecosystem. A single paperless workflow, like opening a new account, will touch the CRM, a form fillout tool, an esignature solution, a document management solution, and probably even more.

Therefore, it’s vital to choose technology vendors that have integrations in place with whichever services they don’t handle in-house. It’s also a bonus to choose vendors that are willing to develop new integrations as your needs change.

Step 5: Educate Stakeholders

Now that you’ve got a project in the works and a paperless solution selected, you need to do your part to make sure employees, advisors, and other stakeholders are prepared for the changes that are about to take place.

Though a new paperless process is designed to make life easier for employees and advisors, it necessarily requires changes to the way people do their work. Many advisors and employees have been doing things the same way for years, and have deep-set routines. So, they might push back — or worse, just smile and nod, then keep doing things the old way.

Here are two best practices for educating stakeholders about new processes:

1) Give them the why, not just the what. When people know the reasons for a major change, they’re more likely to care about it and make it happen.

2) Give them a place to voice their concerns and offer feedback. Project leaders should respond to each and every one of these comments; employees might have insight into potential efficiencies that higher-ups have overlooked.

Step 6: Educate Investors

To meet your paperless goals, you’ll need adoption from top to bottom. If clients say they want to keep doing things the old way, then that will filter up the chain through advisors to the home office, and you won’t be able to realize the efficiencies you hoped for.

For this reason, it’s important to provide advisors with the educational materials they need to inform their clients about new processes. Given the right information, it shouldn’t be too difficult to convince clients to get on board.

According to Fidelity, more than 70% of advisors surveyed said their clients would be open to using paperless technologies including online forms, online statements, mobile account access, and using tablets during meetings. For the portion of investors who want to stick with paper, you’ll need to continue to make those processes available. But the more investors you can get on board with paperless, the better your KPIs will look at the end of the day.

Step 7: Develop New Work Policies

One of the great indirect benefits of a paperless office is that it gives home office employees more flexibility. When you’re not tied to paper files, you don’t always need to be in the office to get your work done.

43% of American employees spend at least some time working remotely, according to a 2017 Gallup poll. Based on this and other data points, Gallup concluded that “flexible scheduling and work-from-home opportunities play a major role in an employee’s decision to take or leave a job.”

In other words, offering remote work opportunities to employees will help you attract, hire, and retain more high-quality home office employees. You might even consider taking on employees that work remotely all the time, or hiring consultants, contractors, or other temporary employees from outside your local area.

If your firm decides to make these changes, you’ll need to work with HR to develop reasonable policies surrounding them. The earlier you develop these policies, the better. Without a comprehensive policy, employees might take too many work-from-home days, or be afraid of repercussions and take none at all.

Step 8: Measure Impact

After you’ve successfully implemented one project, start tracking those KPIs you’ve established. If you’re not hitting your goals, there could be several reasons why. Maybe you need to select a different paperless technology vendor or improve education and training efforts. Maybe this one project won’t reach its full effectiveness without more paperless processes to support it.

In any case, continue to measure impact and make adjustments while you’re choosing which project to tackle next.