From the February 2012 issue of Benefits Selling Magazine •Subscribe!

A day in the life of document management

How improved workflow increases deal flow

Prospecting for business and landing a new account is one of the most exhausting and rewarding aspects of being a broker.

But what happens after the sale can make all the difference as to whether you retain that client. Transactions in this industry are highly regulated and processing the extensive paperwork can be time consuming for both broker and client. As an independent financial services broker/dealer, we service 300 registered reps across the country. Our processes are lengthy and often-required several manual steps—from uploading applications to ensuring compliance review—that can tie up resources internally as paperwork winds its way through various departments.

In an era where brokers are under increasing pressure to add value to client relationships, it’s become a business imperative to streamline administrative tasks and focus on service.

This was the driving force behind the implementation of a document management solution to automate many of our previous paper-based processes. As a result, we have significantly decreased the time to set up new accounts with an automated workflow while ensuring regulatory compliance. More important, our staff has been freed from dealing with logistics so that they could focus on client needs.

 Doing the math

Our back office processes up to 100 new account applications a day via the trade desk, which opens brokerage accounts. Each application has a minimum of six pages and, if it’s a corporate or trust account application, it may have 50 pages. Applications are then reviewed by the compliance department, which makes sure brokers operate in accord with the rules and regulations of FINRA and the SEC. Prior to implementing our workflow system, our financial advisors would fill out the applications and send them to the corporate office via overnight mail. We would receive the application the next day, review it and make sure it was complete. Our NIGO (not in good order) rate was about 30 percent. That means that about one in three—almost a third—of all applications had missing information.

 Streamlined workflow

Using the workflow functionality of Westbrook’s Fortis document management software, representatives are able to submit applications electronically. If the form is incomplete the representative is prompted to fill in missing information. Then the signed document is scanned, uploaded online, and routed to our corporate office. The compliance team reviews it, and approved applications go to the account processing team for review and to make sure it’s cross-filed in the account entry system. This saves time, as well as reduces errors and mailing costs.

What used to take 45 minutes from beginning to end, now takes considerably less time. We were able to eliminate one position from the account processing department and reallocate that person. There are five people in that department now, and we process the same amount of business that our competitors do with eight or nine employees. We are able to grow our business without adding administrative staff.

Before the implementation of electronic workflow, it took about two days from when a client actually signed an application to approval in our home office. The automated process enables same day approval. Our representatives can set up accounts quicker, and they save the cost of sending paper applications via overnight mail.

 Increased cross-functionality

Once the application process was automated, we began using the workflow for other types of approvals. For example, our compliance department provides evidence of required principal review and approval through an electronic signature pad. This saves us time and money because we don’t have to print out documents to sign them.

There’s also a data field that has a security setting that only allows certain users to change it. They can choose a compliance status from a drop down menu and indicate whether the application is approved, NIGO, or rejected. The solution records the name of the user who acted on the document, along with a date and time stamp.

 Aggregate ROI to Date

To date, close to 10,000 documents have been digitized since our workflow solution went live in 2009. We’ve doubled our volume of paperwork since 2009 and between 50 percent to 60 percent of our documents now come through as electronic images.

Other documents, including broker-licensing paperwork, are also archived in the system. We can take advantage of different document types, index fields, and security features across departments. This solution has increased the speed at which we can look up information—whether it’s needed to answer a question from one of our registered representatives or a regulatory request from our compliance department.

Looking ahead, we plan to automate the processes involved in setting up mutual fund and insurance applications using this same solution. We are in a heavily regulated industry and there are multiple steps to effectively open an account and process transactions. Regulation will only increase and it’s critical to have a workflow process that allows us to aggregate, scan, and archive information—whether it’s to complement a third-party system or for internal back up and archive purposes. Having paperwork go through so many hands, as mandated by compliance requirements, makes it more probable that something may get misplaced in the shuffle. A fully automated document management solution eliminates this probability. In fact, our solution was put to the test during a recent audit. It was extremely handy to be able to easily and quickly pull up electronic versions of requested documents.

 Best practices

It’s definitely a paradigm shift for any broker to transition from a paper-based system to imaging. If you’ve never used an imaging system, it will be difficult to understand or set up without having an expert provide assistance with indexing and implementation. There are countless ways to index your client files, for example, but the biggest mistake is actually trying to organize them like your filing cabinet. The vendor is the expert source on the functionality and capabilities of the solution.

However, don’t hesitate to also pick up the phone and ask your colleagues or professional network for specific suggestions.

Here are a handful of other lessons we learned along the way to automation:

Identify the issues that are driving up administrative costs. The most difficult aspect is not in determining how to automate a manual process; it’s getting everyone to agree what the process is and should be. Understand where your business information flows in and out of your systems and identify consolidation points. Our vendor estimated that about 30 percent of total project time would be spent defining current business processes and gaining consensus on the proposed new process.

Implementing a document management solution involves ongoing analysis, planning, and measurement. Decide in advance what activities you plan to track, set benchmarks, and measure progress.

Plan to carefully track user and administrator activities to assure compliance with Sarbanes-Oxley, FINRA, SEC and other industry-specific regulations. Audited user activities should include indexing, modifying, deleting, viewing, faxing, forwarding, e-mailing, and printing data and documents. Your document management solution should track versions, audit system changes, and protect intellectual property from unauthorized access.

Address retention schedules for different types of documents. Your company’s audit and legal departments should help create a framework and a set of policy guidelines.

Ensure that remote workers and satellite office have the same access to applications and internal resources as local employees. Look for applications that provide secure and easy access for remote workers across a range of environments—satellite offices, home offices, and client sites.

Since regulatory changes in the financial services and benefits environment occur rapidly, find a document management solution that easily accommodates change. Invest in technology that is well positioned to take advantage of new platforms and services. Look for solutions based on Web services that are designed to support richer, more interactive applications. While cloud computing is poised to become more prevalent, there are still unanswered questions about the safety of data housed in the cloud, as well as legal issues and concerns that data could be held captive.

 It takes teamwork

When it comes to implementing a document management and workflow solution, involve your entire staff in all stages of the process—from mapping out the individual steps to troubleshooting. It’s critical everyone understand the scope of the technology as well as the individual components so they have an in-depth perspective on the logic behind the system-at-large.

Most important, however, you need to overcome the sentiment of “technology can’t possibly do that.” On the contrary, it probably can if you have the right solution in place and just ask.

 Deliver on service

Driving efficiency and increasing cost savings is the ongoing mantra for businesses in just about any industry looking to compete and thrive in an increasingly competitive landscape. Document management automation is another tool that today’s firms and brokers can deploy to achieve both objectives.

While implementing any new technology can cause some level of anxiety, keep in mind that today’s solutions are both flexible and scalable to meet your needs—regardless of the complexity of your firm and its processes—and having the right vendor can make all the difference in having the right solution implemented smoothly and efficiently. In our case, implementing a document management solution not only helped us realize these key objectives, but also improved our responsiveness to client needs. And when it comes down to it, delivering exceptional customer service is always the priority. 


Michael Bewley is COO of Kovack Securities Inc., in Fort Lauderdale, Fla., a privately owned independent broker/dealer. You can reach Bewley at

Page 1 of 3

Advertisement. Closing in 15 seconds.