By now, the notion of the "paperless office" should be a familiar one to readers of Financial Advisor magazine. The concept, which was considered way ahead of the curve a decade ago, has since gained wide acceptance, at least intellectually, among mainstream advisors. For those of you unfamiliar with the term, a paperless office is one that strives to minimize the use of physical paper and to maximize the use of digital documents or "virtual paper." The advantages are many; to briefly summarize, they include improved filing, more rapid retrieval, inexpensive redundancy, help with compliance and lower costs.
Recent studies indicate that the majority of advisors use some form of document management software. For example, the 2008 "FPA Practitioner Technology Report" indicated that 61% of respondents said they were using some sort of document management software. A closer look at the numbers tells a different story, however. Of those who said they do use a document management system, 21% said they use Adobe Acrobat. This is a fine application, but it is not document management software. For the purposes of this discussion, such a system must offer, at a minimum, a structured filing system, a retrieval system and storage. Additional requirements for a financial advisory firm include granular security settings and an audit trail.
Nine percent said they use PaperPort. This software has some document management capabilities, but it is not a comprehensive solution for the typical financial advisory firm. Another 22% of respondents said they use some other unnamed document management setup. Undoubtedly, some responses falling into the "other" category do not meet the system definition cited above, either. Even if we assume that 22% of "other" respondents really do use a suitable application, that still means only 31% actually use a true one.
It should come as no surprise that when asked to name their best technology investment, only 19% of the FPA report's respondents named document management software. Clearly some advisors think they own DMS software, but they really don't. Of those that do, some are using products that are past their prime. Others are not making the optimum use of what they have.
The good news is that spending on these systems should remain relatively strong. Fourteen percent of respondents said their next major technology purchase would be a document management system. This is competitive with financial planning software (16%) and customer relationship management software (also 14%). Clearly, more spending on DMS is needed. According to the 2008 Moss Adams/Genworth "Financial Performance Study of Advisory Firms," two of the top three practice management areas mentioned as a challenge by firms of every size were operations/technology and time management. A well-designed document management system addresses both of these needs.
Laserfiche Avante
Laserfiche, one of the leading providers of document management software to financial professionals, believes that there has never been a better time to invest in technology. According to Marcel Tsai, the current distress on Wall Street will lead to significant growth for independent advisors, even if revenue growth and profits will initially be constrained by declining financial markets.
Keeping expenses in check will be a challenge. Demand for talented employees will keep wages high. The fallout from abuses on Wall Street is likely to lead to even more oversight and higher compliance costs. So how will advisory firms be able to take on new business while keeping operating costs low? For small to midsize advisory firms with two to 25 employees, the new Laserfiche Avante product may be the answer.
Tsai says that Laserfiche Avante is more than a document management system; it is a business process management system. What's the difference, you may ask? Well, traditionally, most advisory firms have not fully integrated their document management system with their other office systems.
Furthermore, most firms have not created automated work flows that integrate their document management systems.
Laserfiche Avante, a business process management system, ties together a scalable, robust DMS with integrated automated work-flow software at a price that is affordable to even the smallest financial advisory firm.