FEATURE
27 JUNE – 3 JULY 2013
Shining the light on account opening
Sheri Facinelli
ccording to Aite Group’s survey of 515 US financial advisors and more than 300 registered representatives on their account opening pain points, advisors will need to focus on account opening to achieve best practices that will benefit their bottom line. As a provider of account opening services to over 200 brokers, here are some thoughts to explain why account opening is so important for advisors and the role of unified data. The major benefits account opening solutions provide for advisors are efficiency, integration and reclaimed time – especially for independent advisors. By improving these areas of the account opening process, advisors can realize increased client satisfaction and retention, reduced business expenses and improved throughput. Approximately 20% of advisors surveyed by Aite Group say they have lost clients during the account opening process; either because the process took too much time or clients lost confidence when incomplete paperwork was returned multiple times. On average, it takes one to two days for the most automated type accounts, general securities, to process on the brokerdealer platform. For other types of business, cycles can range from 2.5 days for a directly held mutual fund account to as long as 8.9 for life insurance accounts. That’s because processes are still very manual, paper-based and fraught with redundant data entry that can lead to not-in-good-order (NIGO). In an age of instant gratification and self-serve web access, advisors need to offer quick, efficient processes to clients. In other words, cycle times, operations and workflows during account opening dramatically impact the customer experience and confidence. A seamless account opening process is imperative in achieving a successful long term relationship with the client. Like any relationship, the first impression is always crucial. Then, it’s about maintaining satisfaction throughout. Advisors have their own high expectations that also need to be addressed. They want their account opening solution to be integrated with other applications, and they want transparency into the
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BY SHERI FACINELLI, EXECUTIVE VICE PRESIDENT AT QUADRON DATA SOLUTIONS
status of the submitted application. Aite Group’s data finds that advisors with integrated solutions indicate a higher satisfaction level with their broker-dealer. Advisors want to eliminate redundant data entry; they want to seamlessly pass information entered into a customer relationship management (CRM) system during client prospecting to a new account opening system. Reciprocally, any new information captured as part of the account opening process should flow back into that CRM system or other relevant applications. It’s all about unified data. And what about the broker-dealer? Home office personnel typically struggle with redundant data entry and paper shuffling across systems and departments. A unified account opening system captures the data once, completes necessary custodian agreements simultaneously with the broker-dealer account application, and then electronically routes both the data and documents. In the desired state, data is captured once and disseminated electronically to custodians and product sponsors, and to the broker-data warehouse, while the electronic image of the document is automatically routed for appropriate reviews and archived for regulatory purposes. Unified data means different things to different people. From our perspective, it’s about using the same data, captured once and distributed across multiple systems; it can only be possible with a warehouse that covers the scope and depth of data necessary to support your business. You need to ensure you have all your business needs covered – products, custodians and support systems. You need a common process to capture all relevant customer information for Know Your Customer and Suitability requirements, regardless of the type of account. Finally, consider operations (how does this run?) and integration (how does it feed my necessary systems?). A unified data warehouse is the solution to passing efficiencies from one system to another, and it all starts with account opening. Who knew account opening could have such an impact on the advisor’s, and ultimately the broker-dealer’s, business? The road doesn’t have to be fraught with hardships; just follow these steps: start with efficiency in creating a seamless account opening process and unify your data warehouse; with this foundation you can integrate your systems. Once each step is complete, you’ll be free to use enterprise-wide technology, and your bottom line will surely see a difference.
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