How Wealth Managers Digitally Transformation Their Operations With Electronic Signatures
Posted: 2 yrs ago
Read time: 4 mins
Wealth managers are well-positioned to benefit immensely from the use of electronic signatures and electronic form filling. When people seek to manage wealth, the paperwork involved is often seen as a necessary evil. The investor is often focused on preserving or accumulating wealth, depending on his/her life stage, and financial resources. In order for wealth managers to exercise their fiduciary responsibilities, they must communicate and obtain written agreements from their clients through questionaries, forms, agreements, and conversations. Electronic signatures are a turnkey solution for wealth managers to reduce the friction involved when customers need to provide information, or sign agreements.
Step one of the wealth management process typically starts with a conversation between the financial advisor and the client about the client’s needs, goals, financial resources, and risk appetite. At the end of this stage, the client typically fills out and signs a few agreements such as account opening forms, NDA agreements, delegation of authority agreements, and risk profile declarations. This conversation can be done remotely, but most customers would prefer a face-to-face conversation given the high stakes involved. Very few customers will hand over his/her life’s savings without shaking a few hands, and looking into a few eyes.
The great thing about our electronic signature platform is that even in circumstances where customers insist on face-to-face meetings, the efficiency gains to be had are still enormous. Our platform comes with a custom feature that allows the financial advisor to prepare an in-person signing session. In-person signing sessions allow multiple parties to fill and sign documents either remotely, in-person, or a combination of both. The resulting agreement is legally binding, and also comes with a detailed court-admissible audit trail that tracks user identification, location, date, and time.
After a wealth manager onboards a new client, the advisor may need the client to sign documents occasionally, as part of the ongoing process of managing a portfolio of assets or facilitating the execution of trades. Some of these documents are expense reports, purchase orders, trade confirmations, wire instructions/transfers, and options agreements. Today's investors have a bigger expectation for convenience. They desire more self-service, 24-7 availability, and a high level of mobility. With ever-increasing regulatory requirements, using electronic signatures is an easy-to-implement solution that can satisfy customers' desire for convenience, while minimising error rates associated with filling out a more expansive set of regulatory paperwork.
In support of a client's application for services at wealth management firms, the client may be required to submit other documents for review. Client may need to upload a copy of identification details, proof of address, financial records, marriage certificates and many other information. Rather than going back and forth with the client about signing documents and collect supporting documentation, you will able to provide an frictionless interface for your clients to provide the documents you need while they sign the agreements you have provided.
Other benefits to financial advisors include:
Governments across the world are placing increasingly greater responsibility on financial institutions to reduce funding related to criminal and terrorist activities. As a result, wealth and asset management companies have to find more efficient, effective, and profitable ways to protect their organisation against Anti-Money Laundering (AML) and financial crimes. Compliance with AML, Know Your Customer (KYC), and sanctions regulations remains a key area of concern, as firms will be scrutinised to determine the quality of their compliance frameworks relative to regional and global regulatory requirements. The risk of non-compliance can include huge fines and sometimes revoking of licences. Our electronic signature platform facilitates the collection and verification of essential documents during the onboarding process without jeopardising the customer experience. Wealth managers are able to view and verify identification documents real time, and conduct due diligence related to AML/KYC checks.
An increasingly greater proportion of wealth managers are more incentivised to adopt eSignature technology. While the challenges posed by COVID-19 have led to an unprecedented surge in the uptake of automated alternatives, there are long-term secular reasons that are supporting eSignatures in wealth management. Chief among these secular reasons is the desire of investors to work from anywhere and from any device. Investors do not want to be limited by distance and geographies, and so financial advisors need to offer a digital solution that creates flexibility if they want to continue managing clients' money.