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Room for improvement in new client administration

26 July, 2021

Current processing by many product providers and platforms of simple items of administration are costing advice firms more than money, says Anthony Rafferty, CEO Origo

This article was first published in the July/August 2021 issue of Professional Paraplanner

A recent Report produced by NextWealth on our behalf – Welcoming new clients to financial planning: The case for industry- wide process improvement – provided an eye-opening insight into how outdated processes which are still being used by providers and platforms across the industry, are causing advisers, paraplanners and administrators huge frustrations and costing them more than money.

The in-depth research, which was conducted with advice firms around the country, as well as outsourced paraplanners and administrators, shows that the delays currently inherent in the completion and processing of simple forms, like the Letter of Authority, chasing them up and dealing with the legacy (often manual) processes of providers, is not only costing advice firms time and resource it is adversely affecting the client experience, reflecting negatively on the advice firm, which is the client’s point of contact with our industry.

As one adviser quoted in the Report says: “I really get frustrated with providers and how they treat clients, because it’s someone’s income that they’re missing; it’s someone’s retirement that they’re making stressful; it’s someone’s wedding that they could ruin by not having that process quickly. These are things that they mess up. And they do not understand the implications that they’re having on that person.”

Respondents to the survey highlighted a list of outdated working practices that impact the service to clients, including:

  • manual form filling
  • different forms and processes for each provider
  • need to obtain a wet signature
  • no dedicated contact for the forms
  • the need to chase providers for updates/further information.

Every one of the financial advice firms interviewed for the Report described resultant delays and frustrations, forcing them to find workarounds and take extra unnecessary steps when onboarding new clients.

The costs to advice businesses of a poor onboarding experience mount up as a result. They include:

  • Staff time – processing different forms for different providers

– finding the right email contact to which to send forms

– chasing providers for a response/information

– keeping the client informed where a delay occurs

  • Loss of client momentum in what could be their first experience of using an adviser
  • Client stress when key personal deadlines are not met (e.g. retirement, divorce).
  • Adviser client service impact – with the adviser on the sharp end of client frustrations
  • Industry reputational damage – firms seen as inefficient and internally-focussed rather than client focussed.

The Report shows also a clear disconnect between time frames in which providers surveyed say they are turning around Letters of Authority, between one and 10 days, and advisers’ experience, which is weeks (or in some cases months). This disconnect arises because the advisers start counting from the time they begin the request for the client, while providers count from the day they input all the required information into their system, which could be some time after the request process has begun.

The Report makes clear the difficulties and frustrations that the advisers, paraplanners and administrators are experiencing on a daily basis and the reputational damage it is doing to not just the financial advice firm but the industry in general.

It seems ridiculous that a client can order something from Amazon Prime and have it arrive the next day yet it can take the financial services industry sometimes weeks at a time to process a simple piece of administration and months in a more complex situation.

Fortunately, these issues are easily solved with a digital process, which standardises the way the industry operates, enables paraplanners to complete a form once and send to many providers, and provides tracking so the paraplanner knows the form has reached the right person and is being dealt with.

The benefits are that it will make providers, advice firms and their clients’ lives so much easier, and bring the onboarding process of new clients in line with the slick, secure ways of working that clients experience every day in other industries.

We know this is a particular bane for paraplanners and administrators and we are working to change that for you through the new Unipass Letter of Authority.

From the report: What advisers, paraplanners and administrators say about providers’ and platforms’ processing

“To any administrator it’s probably the most painful part, the Letters of Authority. And I think we all feel actually it’s a really simple process. It should be standardised; it doesn’t need to be so painful. It doesn’t need to be so time consuming.”

“How much time do we spend phoning these providers trying to find out the right team to send the letter of authority to. The time that’s wasted is just incredible.”

“We shouldn’t have to have people sat there chasing LoAs and chasing agencies and chasing novations. But we do. So there’s a cost centre there that’s unnecessary.”

“What you find is, if you break down the cost of most advisory firms’ processes, a hell of a lot of that cost, if it’s costed properly, is admin, and chasing and waiting for stuff and chasing up something because you don’t get the information.”