Transamerica Financial Advisors (TFA) is offering its brokers and advisers the tools to create a completely electronic office, from signing documents to managing them through the approval process. But while the TFA Synergy platform –possibly the first such service from a brokerage catering to independent contractors –saves resources and provides a solution for forthcoming variable annuity reporting requirements, it doesn’t mean paper is disappearing anytime soon. For financial advisory services, the paperless office represents a major change. “After 20 years in the business, I can’t recall anything that’s gotten me so excited,” said Joe Brinker, president of Havertown, Pa.-based Brinker Organization and supervisor for 20 independent contractor affiliates of TFA. Brinker and his advisers use the platform for imaging, document management and workflow, new accounts, and compliance functionality, including a tool that automatically provides documents for specific transactions. In the coming weeks, he anticipates adding the e -signatures component –the newest part of the system -which lets customers sign electronic documents much like a credit -card signature pad in the supermarket. Camarillo, Calif.-based Interlink Electronics is providing the functionality, which is in beta -testing with ten users located close to the vendor.
Currently, the advisers Brinker supervises scan signed documents into TFA Synergy, which ensures they are completed properly and places them in an electronic queue for his approval. When Brinker signs off on them, often within minutes –even for reps across the country –the advisers can print and send copies to the financial product providers either overnight or by standard mail.
Other brokerages supporting independent advisers and reps are also moving to automate paperwork processing. Bank of New York Mellon Corp. subsidiary Pershing, which clears Los Angeles -based Transamerica’s brokerage business, is testing such a platform -including e –signatures –and plans to roll it out to adviser customers in June. Raymond James & Associates and Charles Schwab & Co. have offered some electronic functionality for several years. For reps and supervisors, automating operations and customer services means less time spent mailing packages, updating files and correcting incomplete or incorrect manual applications. Brinker said TFA Synergy saves him ten hours a week, which he can devote to product activities, and cuts down on the staffing costs for administrative tasks. Anthony Petsis, principal of Anthony Petsis & Associates, another Transamerica affiliate, said that prior to automating his office he had a full -time employee dedicated to paperwork and a 20 – hour – a -week part -timer who updated files.
“If a client called in asking whether we had done a beneficiary designation change we had talked about, we had to put the client on hold and go down and get the file,” said Petsis. “Now we pull up an imaged copy of the change form and see it’s been countersigned. And we can see when we last spoke to the client and whether it may be time to talk again.” Another major source of savings is office space. Petsis plans to empty his 1,200 square foot basement, currently filled with files, by converting paper documents into electronic files, which he estimates will take a year of devoted effort. That task may ultimately make the paperless office easier to wish for than achieve, at least for preexisting business. “The advisers are all independent, so the brokerage can’t really make everybody switch,” said Adam Honore, analyst at Boston -based Aite Group. “When you look at those stacks of file cabinets, nobody is overly excited about doing the back work.” Petsis has a head start on the back -imaging front.
In addition to his own advisory business in Newton, Pa., Petsis and principal Ashli Wheaton supervise the businesses of 15 affiliated TFA advisers across the country. Petsis said his firm has used Laserfiche’s Web -based document management and workflow solution –also part of TFA Synergy–since 2003. Although its solution was less automated than Transamerica’s, the firm hasn’t bought any file cabinets since. TFA in February 2006 selected software from Laserfiche, a Long Beach, Calif.-based division of Compulink Management Center, and began rolling it out to advisers that December. Petsis, who gets most of his business from his own production, credited TFA Synergy with enabling him to supervise reps across the country in conjunction with Wheaton, who is located in Murfreesboro, Tenn. The platform allows them to share responsibility efficiently –if Wheaton is sick, Petsis can reroute documents seeking approval to his virtual queue. Before, reps would have had to mail him the package, losing a day.
“TFA Synergy has allowed me to have another office to help me supervise this business,” Petsis said. “Without a paperless platform it would have been very difficult.” Brinker said the first floor of the two -story house his business occupies is currently filled with file cabinets. He aims to rectify that over the next two years by scanning in all files from the 20 -odd reps he supervises, except for a small percentage that provide the cost basis of longstanding annuities, among other things. The additional space, he said, will allow for more staff, including advisers, as well as an office where they can meet clients with disabilities who find climbing stairs difficult. “We won’t have to go down a floor to find the files,” added Brinker. “It will save employees time, and advisers will be able to answer clients’ questions much faster.” That turnaround time, especially for approvals, will be a boon when NASD Rule 2821 becomes effective in August. That rule seeks to streamline brokerages’ processing of deferred variable annuities and sets deadlines on when forms must be submitted.
TFA president and COO Sandy Brown said her firm’s automated platform coincidentally arrived just in time to aid advisers in meeting those new requirements. In fact, TFA is using Rule 2821 and other mandates and costs that have emerged in recent years to talk to smaller broker -dealers about doing business through Transamerica while retaining their individual identities. “Nowadays, many small broker -dealers are already struggling to make a profit, and soon they’re going to have to implement Rule 2821,” said Brown. Pershing’s new paperless office product should bring similar benefits to its registered investment adviser correspondents, but it has not yet set a date to introduce the system to broker -dealer customers. For the moment, going paperless requires perseverance and deep pockets.
Brown said that TFA had a “commitment” from parent AEGON Insurance Group five years ago when it began exploring the prospect of such a platform. After reviewing products from 22 vendors and finding that none offered a complete solution, TFA, which supports 700 advisers, decided to build one itself. The firm’s largest affiliates –InterSecurities, whose business model is similar to TFA’s, and insurance -focused World Group Securities –are currently using the document management and workflow components and are likely to adopt other parts, Brown said TFA Synergy integrates SunGard Data Systems’ new account software, which provides a wizard -based data -entry feature to gather client information, and the Wayne, Pa.-based vendor’s Protegent Surveillance compliance tool –both implemented in 2006. Los Angeles -based Efficient Technology’s Quik software creates a forms library that automatically sends the correct electronic forms to advisers opening up new accounts. Electronically capturing customer information from the onset has ancillary benefits as well. For one, Brown said, it provides advisers with a database they can quickly check to update clients on where they stand. They can also use that data in their preferred software applications. “We can download the data into virtually any customer relationship management system,” noted Brown.