Transitioning between wealth management firms can be a difficult task for advisors and their practices, but now there’s a fintech solution to help smooth the way.
Skience, a Herndon, Va.-based technology consultant and developer of digital cloud services for financial services businesses, today introduced its Advisor Transitions Solution, a tool to streamline and simplify the process advisors use to change firms.
“This is one of the last problems that hasn’t been digitized in some way,” said Marc Butler, Skience’s chief operating officer and president. “It traditionally involves a lot of back and forth between the advisor, the broker-dealer or custodian, and the end investors, and it’s fraught with challenges and inefficiencies.”
The transition process for most advisors remains filled with manual tasks and heavy paperwork burdens, and it can require them to wait for client reviews, approvals and signatures before moving forward.
There’s also significant compliance risk for advisors in transition and the firm or practice they’re moving to—several firms have recently run afoul of rules laid out by the Securities and Exchange Commission and the Financial Industry Regulatory Authority governing transitions and the sharing of client personal information.
“We think we’ve solved this problem about how you transition accounts in a way that creates a great experience for everyone, digitally, and in a compliant manner,” said Butler.
“To clarify, though, this is a post-U4 or U5 solution,” he said, referring to the Finra forms for registering and terminating registrations. “The advisor has already committed to a broker-dealer or custodian that they’ll be moving to, and has notified the current firm that they’re leaving, so all of this is aboveboard. The other piece that is very important is that it gets the end investor involved, which not only helps avoid some compliance issues, but ensures that the advisor has the most up-to-date information.”
Skience intends for the tool to help advisors open new client accounts on a custodial or brokerage platform, and then transfer their assets faster than the traditional manual transition processes.
The Advisor Transitions Solution also helps advisors easily communicate with clients when collecting required personal information to open accounts and transfer assets in a compliant manner.
The tool offers advisors guided workflows, including validation checks to see where a client is in providing their information, enabling a seamless transition of data to new custodial or clearing platforms.