Operational Efficiency for The Back Office: The Time is Now

When was the last time you heard of clients choosing an advisory firm because they have a “great back office?”  While the answer to that may be “never,” many of the relationship-building activities that clients value most are made possible by back office efficiency.  In fact, a strong operating system can generate one of your firm’s most precious assets — advisor time. 

According to the recent J.D. Power 2023 U.S. Financial Advisor Satisfaction Study, nearly one-third (28%) of financial advisors say they do not have enough time to spend with clients. These findings come at a crucial time for the industry as it also faces a growing attrition problem. According to Cerulli research, approximately 36% of total industry headcount plans to retire in the next ten years. Couple that with the alarmingly high 75% failure rate among rookie advisors, and the urgency to create high quality client time becomes even more apparent. 

As institutions continue to manage through long-term digital transformation and data integration projects, here are three high-impact automation improvements that can help keep advisors engaged in what matters most — their clients. 

1. Client account onboarding

   For advisors, opening a new account should be a triumphant moment. Unfortunately, opening and onboarding new clients can be a tedious and difficult experience, and not the way either party wants to kick off the relationship. Advisors are often dealing with meeting prep, multiple systems that don’t talk to each other, and redundant data entry.  The amount of time lost working across different systems can be staggering, which makes the onboarding process a great candidate for automation. Our technology and services are used by thousands of financial advisors and investors. We estimate the traditional onboarding process to take between 35 to 70 minutes per client and our technology is designed to significantly reduce onboarding time.

   Even if your company has a complex set of legacy systems, there are a range of cloud-based tools that can streamline the experience, from proposal development to investment selection, with data flowing through a single platform. With these changes in place, the onboarding process can be significantly reduced to as little as 10-15 minutes per client, under most circumstances. If you consider an incremental time savings of 45 minutes for a given advisor opening 100 new accounts, that could amount to up to 75 hours or 9 full days of time that can be reallocated to developing relationships.

2. Compliance, oversight and account review

   Anyone who has ever worked as a financial advisor understands the importance, but also the complexity, of compliance and account review. Even the smallest error or inconsistency can land an account in NIGO (Not In Good Order) limbo. Not only can this delay the transfer of assets, but advisors may be forced to navigate multiple systems which could require unnecessary back-and-forth with back office teams and a poor user experience, causing advisors to spend between 15 and 30 minutes per account review.   

   To alleviate these challenges, digital solutions can bring greater consistency and accuracy to the account opening and review process. Before an account can even be submitted, inconsistencies can be flagged and corrected with a client in the moment, significantly reducing the call backs and reworkings.

   In addition, certain technologies can help advisors and investors identify the most suitable investment portfolio when opening an account. Through a host of questions about investor goals and risk tolerance, the advisor can suggest the right investment options to ensure the long term allocations are appropriate. Compliance logic should be built in and integrated across systems to mitigate risk, improve the client experience, and increase advisor success.

   The right digital system can reduce time spent on compliance, oversight and account review needs to as little as 0-5 minutes per account. Assuming a 15 minute savings per account, an advisor opening 100 accounts could save up to 25 hours, or 2 full days a year.

3. Client servicing

   Advisors should be focused on client service, but can not engage with their clients as much as they’d like if that precious time is taken up by mundane and administrative tasks. Advisors often get pulled away from problem solving and advice giving to support tax statement requests, account updates and money transfers. And of course there is the time spent chasing down clients for their mandatory annual reviews. Based on our observations and data we’ve reviewed, we estimate a typical advisor spends 25-60 minutes each year on this kind of client administrative support.   

   Through technology and automation, a single platform can support clients and their advisors in completing these tasks far more efficiently. Tech-enabled functions not only provide easier access, but they allow for video collaboration with these tasks already integrated. This kind of efficient collaboration can save an advisor up to 30 minutes per account. For an established advisor with 300 accounts, that could amount to a time savings of up to 150 hours or 19 days per year.

So what’s the right digital platform? Look no further — SigFig offers a seamless and modern digital wealth experience with cost-saving technology that will help you streamline your back office process, help determine investment suitability for clients, and help you satisfy certain compliance and review tasks more efficiently. Then you can focus on high-value client interactions and scaling your business, which is where your efforts should be directed.