Berkshire Hathaway Chairman Warren Buffett once said: “Only when the tide goes out do you discover who’s been swimming naked.”
He was talking about investors—but when the Covid-19 outbreak shut down the American economy, the tide went out on the entire financial industry. Advisors were forced, suddenly, to embrace virtual practices to continue to serve their clients amid extreme levels of market volatility.
At least advisors were wearing their bathing suits. That was the observation of Charles Schwab’s Lauren Wilkinson, senior vice president of digital advisor solutions, who noted in a May 5 webcast that most of them successfully embraced technology during the pandemic to serve clients.
“We’ve seen digital adoption steadily increasing continuously over time,” she said. “It was on the rise, but the last six to eight weeks, with much of the country sheltered in place, have raised the urgency.” One advisor she works with had not used paper once with clients throughout the shutdown, something Wilkinson called “unprecedented.”
Digital Account Openings
Over a six-week period during the outbreak, Wilkinson measured a spike in advisors using digital account opening capabilities, something they’ve had access to in some form for several years yet were slow to adopt. More than one-third of the firms working with Schwab now take advantage of the feature, she said. Three-quarters of the wire transfers to and from the Schwab platform are now processed digitally.
Online account opening has been especially effective for advisors during the outbreak, says Mark Radulovich, founder and partner at Houston-based Prota Financial. A digital workflow has emerged, he said, as advisors leave behind a paper process where lots of mistakes can be made along the way.
“We opened eight accounts yesterday, and to open eight accounts digitally is basically no effort,” Radulovich says. “We’ve seen a huge speedup in turnaround. Rather than having to mail things back and forth to offices, we’re talking on the phone, I’m entering whatever information needs to be entered, I hit submit and they see it usually before we’re off the call. They review it, e-sign it with DocuSign, and then I get an alert in a minute or two that the account is open.”
Young firms like Prota are often in the process of adding several new clients at once, says Radulovich. That makes it easier to turn around the account opening process, reduce the work in progress and free staff to serve clients and expand business.
Justyn Volesko, managing partner of New York-based AJ Wealth, adopted similar technology so he would be able to work remotely, but he also wanted to create a truly paperless firm.
“We had a large emphasis on doing everything and anything we can electronically,” Volesko says. “Moving to the work-from-home setup that we have been in for the last few weeks to months has been somewhat seamless. We all work from computers at home, and can access all of the various programs and platforms that people use while sitting in the office.”