Financial Advisor Automation: how process efficiency saves money and eases compliance

Financial planning is a tough industry, and it's becoming increasingly tougher. Costs and compliance burdens both seem to rise every year.

Manual processes like collecting signatures or populating your System of Record (SOR) can eat up hours of time across your entire client base. Not to mention the critical risk of mistyping key details that comes with manual data entry.

Automating your advisory firm's processes can help by directly reducing your administration expenses, improving accuracy and making compliance easier. Here are four ways automation can improve process efficiency, make your clients happier and make your business more profitable.

A growing industry with increasing costs

The financial planning industry continues to grow, with more Australians than ever seeking professional advice. Unfortunately, while the sector is expanding, the cost of doing business as a financial planner is also rising — driven in large part by recommendations from the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.

Changes such as the phase-out of grandfathered commissions have significantly impacted advisor profitability across the industry, while ongoing reforms continue to reshape how advice firms operate.

In short: as a financial advisor, new compliance regulations, rising administration costs and more complex reporting requirements could all combine to dramatically shrink your future margins.

An ever-increasing compliance burden

As the costs of doing business rise, so too does your burden of compliance. You need to meet stricter qualification standards, undertake more regular professional development, and document everything in more detail.

Getting new qualifications is yet another financial burden on your business — and you can't pass all those increasing costs on to your customers without losing business. The only way you can maintain a profitable business is to decrease your costs by increasing efficiency.

Reduce your expenses by increasing process efficiency

At Umlaut, we've helped hundreds of financial planners overcome the barriers to making their business more profitable. We understand the problems of rising administration costs and time-intensive manual processes. Three of the areas most affected by these issues are:

• Signature collection
• Manual workflows — both within the firm and externally with licensee partners
• Integration with your System of Record (SOR)

Together, issues in these areas add up to a huge drain on time and money. Here's how process efficiency can help bring down your costs to improve your bottom line.

1. Beat rising administration costs directly

As a financial advisor, you're facing ever-increasing costs of sale. You need to pay for your licence, insurance, software, and possibly employees. That's on top of all the other operational costs of running your business.

All the increased compliance means you also have to provide more for each client than you previously needed to. Spending more time on each client further increases your costs.

Cost of administration

If you're like most financial advice licensees, your firm is a small one with fewer than 10 advisors on board. You simply don't have the staff in-house to keep up with the increased paperwork. That means you either spend your own time on administration tasks, or you're forced to hire admins or paraplanners.

It's tempting to try to do it all yourself to save on outsourcing — but your strength lies in sitting in front of the client, giving them financial advice, not in filling out paperwork. If you're billing your time at $250+ per hour and doing work that a paraplanner could do for a fraction of that, you're losing meaningful revenue every hour.

A simple fact-find might take three hours per client to fill out and enter into your SOR. A more comprehensive financial report could take 26 hours or more to prepare. Across a hundred clients, doing all that paperwork yourself costs you literally thousands of dollars.

Cost of documentation

As compliance requirements become more detailed, the documentation burden on your business grows. You now need to prove you've created each client's document specifically for them and meet minimum documentation standards to show the thought and decisions behind your advice.

Save money by automating your administration

Improving the efficiency of your processes by automating parts of your administration can save you significant time and money. eForms and paperless digital systems for internal documents help reduce handling time, reduce manual data entry, and remove the potential for rekeying errors. That also means far less manual administration to outsource, directly lowering your business costs.

2. Do away with manual signature collection

The process of getting signatures on paper forms is laborious and time consuming. Think about the steps involved in manually getting just one client to sign one form:

• Download the form
• Fill it out manually
• Liaise with the client for their signature, which may take several phone calls
• Follow up when they haven't signed
• Pay for printing and postage if you need to send the form to them
• Finally, scan or lodge it with the licensee

Across an average client base of 100 clients, you can easily waste hundreds of hours each year simply collecting signatures — plus the cost of printing, postage, and admin time to handle it all.

Digital signatures ease the pain

With digital signatures, clients can sign your form wherever they are. They don't need to wait for paper forms to arrive in the post, or have to come into your office. The quicker the process goes from start to finish, the less time you spend reminding them or chasing documents.

As a bonus, you can make fields mandatory, so you'll never have to repeat the process because a client somehow didn't see a field they needed to sign.

3. Automate manual workflows

Creating each client's Statement of Advice and other documents takes time. Compliance regulations demand each document is unique. Managing the document workflow as it moves between you, your paraplanner and your client can be time-consuming.

At each step, someone needs to manually track which drafting stage each document is at, ensure it moves on to the right person, and that it doesn't get stuck in someone's in-tray.

Save time and frustration with workflow automation

You can make the entire document process more efficient by automating internal workflows and digitising your forms. Digitising your workflow allows you to automatically move documents where they need to go, track exactly where they are in the process, and immediately see if they've got 'stuck'. You'll free up time, feel confident you're not missing steps, and stay compliant.

Automating workflow frees you and your team to work on income-generating activities rather than manual processes.

4. Reduce manual data entry

Having a System of Record is critical, but manually entering data into it is time-consuming, error-prone, and risks non-compliance. Typos are easy to make and handwriting can be hard to decipher.

Using digital forms to capture and store client data can save this manual data entry step — but only if the information clients provide automatically populates into your system. Unintegrated eforms and webforms collect information and send it to an employee to manually retype, which takes time and leaves you open to errors.

Speed up the process and reduce errors with integration

Automating the flow of data between your SOR, your internal systems and your external licensee saves an enormous amount of time. It also reduces the potential for costly errors and gives your customers a better experience by saving them from repeatedly filling in forms with the same information.

In short, integrating your data entry with your SOR means you can spend more time focusing on growing your business rather than manually handling data.

Process efficiency = greater competitiveness

Implementing process efficiency and automation through digital forms, digital signatures and automated workflow saves your business time and money. It frees up time you can spend on growing your business, lets you scale without increasing staff, and enables you to give more value to your existing clients — increasing customer satisfaction and longevity.

If you'd like help mapping out where automation will have the biggest impact in your practice, get in touch with Umlaut.