Solving Tax Season Headaches

SITUATION

• Manual processes took too long, and information was too hard to find in a legacy document management system.
• As the business grew, it needed a new solution that would reclaim time to spend with clients.

SOLUTION

• Immediate savings of 20,000 per year from not having to hire part-time clerks for tax season.
• Reduced tax preparation time, saving thousands of hours per year that can now be directed toward client service.

For a leading total wealth management and financial planning firm, tax season regularly meant doubling staff due to the sheer volume of work — and paperwork.

But as the business steadily grew, the firm had also outgrown what its chief operating officer called its “Stone Age document management system.”

In one attempt at a solution, the firm developed a proprietary and non-SQL based system, which was an add-on module for the firm’s tax preparation software, “purely for storage,” the COO said. Data transfer to PDF was difficult and error-prone, and “we were essentially scanning to create a back-up for the actual physical file. But that was unreliable — we lost data once, and it had no security or audit trail of any sort.”

From Paperless to Purposeful: An ECM Vision Takes Shape

Eventually, the firm’s files — containing 10 years of data — were simply too big to manage and too hard to find. “We’d already added a scanning clerk and a designated file clerk, but it was quickly becoming an operational nightmare, with more staff to manage and more documents getting misplaced,” the COO said, adding that the firm needed to reassess its vision for digital transformation to go beyond simply going paperless. “We first looked into Laserfiche in 2006, but back then, we weren’t looking at ECM in terms of business process automation or any bigger-picture operational improvements. We just wanted to get rid of the paper.”

The firm began to see how integral a content services platform was to not only keep up with, but also anticipate, the organization’s projected growth. “We looked at a few solutions, and they all did things in their own way. Only Laserfiche offered the flexibility to develop our own folder structures and templates — and we’d be able to change them depending on requirements without calling in a consultant, the COO added. “Plus, we required that Laserfiche integrate with our Microsoft Dynamics CRM and [our] tax software, as well as send Microsoft Office documents directly to Laserfiche. We wanted everything to mesh together. Other systems either didn’t integrate, or if they did, it was going be complicated and expensive.”

Laserfiche Workflow Saves Thousands of Hours Per Year

With a looming tax deadline, the organization focused its initial deployment of Laserfiche on the tax preparation side of the business, beginning with a substantial backlog conversion of paper files. “It took around 30 days to deploy, customize and integrate the system,” the COO said. “We had one day of training for full-time staff. And it took me 30 minutes to train the part time staff on how they’d be using Laserfiche.”

The ease of deployment was significant based in no small part on Laserfiche’s ability to mirror the firm’s familiar paper filing structures. The firm set up Laserfiche as the single source of truth: Tax worksheets were automatically sent to Laserfiche with a single click from Microsoft Office programs, while Laserfiche also collected all forms from the tax software.

A Laserfiche Workflow automatically routes files between staff and clients. “A file used to ‘jump’ between seven sets of hands, from client meeting to the client delivery,” the COO said. “File clerk to front desk staff to preparer to checker to scanner to processor to mail clerk — and back to the file clerk.

“Now, using Laserfiche Workflow, the front desk sets up the appointment and creates the file for the preparer, and it’s just ‘click’ the field, ‘approve,’ ‘approve,’ ‘approve,’ all the way through the process. If something isn’t approved, it is sent back automatically with a ‘sticky note’ on the document in Laserfiche. Nobody has to leave their desk, and I can monitor the whole process and see where everything is so I know what’s getting done. It just raises the level of efficiency and accountability,” the COO added. “Instead of people getting up and moving files from cabinets, it ‘jumps’ by itself.”

And benefits went beyond removing the burden of manual routing from staff. “Operationally, we had the best tax season ever, especially for me since I could monitor every detail of the business and everyone’s performance from my screen,” the COO said. “We made our ROI in the first year alone. But the biggest savings was the preparers’ time — at least 10 minutes for every hour. When you add that up, that’s literally a thousand hours our staff can spend working with more clients.”

Expanding Deployment, Saving More Clicks with Image-enablement Integration

 Solving Tax Season Headaches

“We’re taking things step by step,” the COO said. “One thing we’ve learned from this process is that in order for the transition to a totally paperless environment to be successful, users have to accept it and want to use it. Laserfiche has the flexibility to make that happen.”

From an operations standpoint, the COO explains, they are very satisfied. “Laserfiche is easy to maneuver and to develop and change.”

Shareholders Service Group

Shareholders Service Group (SSG) was co-founded in 2002 by Peter Mangan and Bob Reed, financial services executives with over 60 collective years of experience in the brokerage services and financial advisor industry. Their goal was to provide high-quality, dedicated services for independent registered investment advisors.

From the beginning, Laserfiche enterprise content management (ECM) software has provided a technological foundation to help SSG provide that high-quality, dedicated service. “Based on our business experience, how paper-intensive our business would be and the necessary controls around that, we knew it was incredibly important to have a well-known, well-respected document management system,” says Dan Skiles, executive vice president of SSG. “Laserfiche certainly knew FINRA and understood the importance of the documents that we use to run our business.”

Over the past decade, the firm has expanded—as has its use of Laserfiche to manage its content. The firm has worked with Laserfiche solution provider CDI to meet changing needs. “Our business is growing dramatically, and so the scalability and reliability of Laserfiche has been critical to that success for us,” Skiles says.

“When we started, we had zero advisors, and today we’re pushing almost 1,000. Keep in mind those advisors have accounts—from as little as four or five to several hundred. Laserfiche has been there with us the whole time,” he adds.

Content management that improves customer relationships

Key to its usefulness, Skiles says, has been Laserfiche’s customizable folder structures, which makes it easy to use in different business units. “We have multiple departments—trading, new accounts, operations, cash management—all using Laserfiche for their various business processes. And the fact that it’s flexible enough to meet their needs, even though their roles and responsibilities are different, has helped us to have a cohesive group responding appropriately to clients as we use their documents.”

Skiles also lauds Laserfiche’s ability to manage documents of all types and ages, using various metadata and comprehensive search capabilities. “We’re a heavily regulated business, so yesterday’s documents are just as important as today’s,” he says. “The fact that Laserfiche has grown with us, and is scalable and reliable as we grow our staff, has been critical in our overall success.”

It’s this best-of-breed ease-of-use, he says, that has been especially practical when it comes to getting everyone on the same (paperless) page. “Certainly one of the things we’ve noticed with Laserfiche is how user-friendly it is, so that our staff—from someone who’s been on staff for eight to ten years to someone we just hired as an intern last year—can immediately be productive,” he says. “Because everyone in the firm is responding to clients, a short learning curve is critical.”

The result, according to Skiles, is a foundation for not only managing content, but also relationships. “When you run a broker-dealer, your documents are critical. They represent agreements. They represent authority,” he says. “With Laserfiche, with the way we’re able to work within the system, we have control of our clients’ information. They’re impressed by our ability to retrieve a document while we’re on the phone with them, which ultimately strengthens that personal relationship.”

Smoother audits

Regulators, too, have been impressed, as they were earlier this year. “We had FINRA come in to our office for their regular audit. Laserfiche was such a critical component of that because everything that FINRA wanted related to our documents,” Skiles recalls. “Everything they asked for—new account applications, authorizations to do this for a client, this agreement that was established with this client, transfer instructions from other financial services firms—was in Laserfiche, so we were able to provide it to them electronically.

The cost of compliance has nearly doubled in the past three years, reaching an estimated annual cost of more than $25 billion, according to the Securities Industry Association’s Report on the Costs of Compliance in the U.S. Securities Industry. As Skiles points out, in an increasingly demanding regulatory environment, deploying an ECM solution not only improves the bottom line, but also helps simplify audits.

“It’s a big deal,” he continues. “Let me tell you, when you’re sitting there with FINRA and you want to respond efficiently and effectively to their requests, removing some of that anxiety is worth a lot to both your sanity and your sleeping at night.

“That’s why we have rules that if it’s not scanned, it doesn’t exist. It’s so critical with our growing staff that we all have access to the same information. Now with nearly 1,000 advisors, we all have access to information at the click of a button.”

The competitive value of “technology strength”

The 2011 InvestmentNews Technology Study showed that, in the financial services industry, increased productivity was by far the most common consideration in technology spending. Automating routine, rules-based tasks allows staff at top-performing firms to spend more time serving clients.

When it comes to ROI, Skiles highlights the availability of information as one of Laserfiche’s defining factors—something that moves beyond getting rid of paper and filing cabinets. “Certainly the immediate ROI that comes to mind is not having documents and filing cabinets all over the place. But with a growing firm, the ROI I most appreciate is how quickly we can make an employee efficient. I can hire someone and have them up and running with Laserfiche in less than a day.”

The result, he says, is that SSG has kept operations optimal and compliance concerns to a minimum while also maintaining its competitive edge. “There’s been, obviously, competitive pressure on trading, and then of course the regulations have increased dramatically. What’s helped us a lot is technology,” he says.

“We took more trades over five days in August this past year than we did the first month that I was at the firm more than three years ago. And what’s exciting about that is that our trading desk was able to accommodate those trades just because of technology. Bottom line is that it does show you the technology strength that you have in this business.”

InvestmentNews Study Shows the Payoff of Advisor Technology for Financial Services

Right now, RIAs are busy formulating their business plans for 2015.  In the area of advisor technology, investment decisions have become increasingly complex: what kind of technology is needed, can current technology simply be upgraded—should new technology be purchased at all? To help advisors answer these questions, InvestmentNews performed a study on the effects of investing in technology for advisory businesses. According to the study, firms that integrated a variety of technologies and displayed an innovative and progressive attitude toward technology had higher revenues, profits, AUM, and number of clients than those who limited their technological investments.

What Types of Advisor Technology Are Used?

In the study, the technology ‘innovators’ were identified as using up to six software solutions on a daily basis. The most commonly used advisor technology applications are:
  • CRM
  • Financial planning
  • Account aggregation
  • Document management
  • Portfolio management
  • Portfolio rebalancing

Each of these technologies provides unique opportunities for efficiency, compliance, data accuracy and better customer service—but trying to manage so many distinct applications with siloed information can be just as inefficient as having no software at all.

The real benefit comes when these technologies can share data and talk to each other. When integrated, these technologies not only provide faster data and better insights to the advisor, they can automate entire processes with workflows—leaving more time for the advisor to focus on clients.

What Daily Processes Are Improved by Technology?

One of the most common processes that financial advisors automate is the opening of new accounts. Without technology, this can be a tedious process. Forms have to be filled out, mailed for signatures and checked for errors repeatedly until the new account can be finalized.

With integrated technologies, this process looks much different. By implementing CRM, document management software, forms filling software, and electronic signatures, the time required to open a new account can take minutes instead of weeks.

Through the use of these software applications, advisors opening new accounts experience the following benefits:
  • Software auto-populates electronic forms, reducing processing time and errors resulting from manual entry.
  • Forms are e-mailed to account holders for e-signatures, eliminating paper and courier costs.
  • Compliance review and approval processes are automated with workflows, allowing advisors to start booking revenue sooner.

This method of processing new accounts not only saves time, but records an audit history of every action taken at every step.

These efficiency and compliance benefits are not limited to the opening of new accounts. Virtually any data or document-driven process can be automated, including the creation of a blotter, storing client communications, social media archiving, AP processing, HR onboarding and document filing.

Why Adopt Advisor Technology Now?

A combination of factors including increased audits, changing recordkeeping requirements, the rise of mobile devices and social media and the vast potential for efficiency gains are driving advisors to shift their attitudes toward technology.

Those who realize these benefits are surging ahead in this competitive industry and allowing technology to take care of the back office. Now they can dedicate valuable time and effort to more important tasks, such as client and talent acquisition, money management, financial planning and client relationships.

To learn more about the benefits of adopting technology in your business, read our new whitepaper, “Technology Strategies of Top-Tier RIAs,” which summarizes the data from the InvestmentNews Research Study and outlines the practices of these top performing RIAs.