Increase your firm's value while adding efficiency.
When I was looking for a buyer for my planning practice in 2001, I narrowed the list of suitors to four. The one I was leaning toward selling to discovered that I was running a completely paperless office and immediately and substantially increased his bid. Read on to find out why.
Tim Welsh, a consultant to Laserfiche, the Long Beach, Calif., company specializing in document management solutions for financial advisory and other professional businesses, says increased regulatory compliance will drive more firms to get a better handle on their documents. "Everyone knows about the scandals on Wall Street and financial products that have failed. These are leading us toward a 'compliance tsunami.' "
Historically, says Welsh, the SEC has conducted audits of advisory firms every five to seven years. "Most advisors could skate through on compliance," says Welsh. "Now what we're seeing is the SEC looking for a firm's ability during an audit to quickly provide requested documents." And the SEC is considering subjecting to surprise audits not only firms that take custody of client funds, but those that simply take their management fees directly from their clients' accounts. "Advisors are looking at at least a 10% to 20% increase in compliance costs," Welsh estimates.
A 15-year-old firm, let's say, probably has file cabinets everywhere, he says. "The SEC says 'show us ABC and XYZ documents,' and it's difficult for the advisor to produce that information without having the right technology in the back office to be able to do so." The only way to meet these demands, Welsh says, is to put things in a digital format.
Of course, creating a digital document management system will not only help advisors be more compliant, but will effect overall increases in efficiency--but not all by itself. "Advisors need a solution comprised of document management and workflow control. Managing workflow creates 'audit trails' that answer questions such as who accessed a particular document and what changes were made to it." This enables the advisor to demonstrate to the auditor that he has control of his business.
On example of a document management system coupled with a workflow solution is Laserfiche's "Avante" product. Avante is intended to be a system for integrating the advisor's digital documents into every step of his business processes that is affordable for all sizes of advisory firms. Pricing starts at $1,500 plus $500 per named user license.
Laserfiche describes Avante as combining its own document management solutions with business process management. In other words, where document management alone gives one the ability to digitally capture and distribute documents, business process management is the automation of the routing process for such documents as they are used throughout the business.
The benefits of document management go beyond even regulatory compliance and efficiency, though. Welsh says that the benefits of a document management system also include added security, a means of disaster recovery and business continuity, enhanced client service, and reduced physical storage costs.