Over the past decade, digitisation has reshaped much of the financial services industry, yet in the tax-efficient and other alternative investments space, many advice firms have been reluctant to adapt. Traditional methods such as paper-based applications, wet signatures and manual spreadsheets used to track and plan client’s investments are still favoured despite technology advances and changing regulations.
The current climate presents an opportunity for change and it is more important than ever for firms to adopt new ways of working - with technology leading the way. If one or more of the traditional methods listed above sound familiar and are still practised in your firm, we've listed four key reasons why you should join the large number of advisers embracing technology to digitise the full investment process of their client’s alternative asset portfolios.
Administering tax-efficient and other alternative asset investments can be laborious. A huge amount of time is wasted completing and posting paper-based application forms, tracking using spreadsheets and chasing managers for investment updates.
Our research suggests that over an assumed lifetime of five years for each EIS investment, an adviser firm can spend up to 34 hours on these heavily manual tasks.
Technology can be used to significantly streamline these processes. Integrations with existing back-office systems removes the need for double keying information both improving accuracy and eliminating the risk of human error. Pre-populated data, e-signatures and digital forms sent directly through for approval to fund managers allows the investment application process to be completed in a few minutes, significantly reducing administrative hours and operational costs.
Financial advisers will need to adapt their working practices to meet their client’s requirements remotely. Integrating digital processes with existing workflows will provide clients with ongoing communication, easy access to their portfolios and financial documents whilst being set-up to remotely with the resources to make investments on their behalf.
Whilst face-to-face meetings with clients will remain important, integrating this with digital innovation will deliver your clients a seamless and efficient customer service, build better relationships and in turn help you grow your business.
3. Centralised document storage
With the rise in remote working, it is no longer feasible to store and share paper-based investment documents, application forms and certificates onsite in a physical location or on email. Sensitive client information and associated documentation needs to be stored securely in a centralised location, accessible to all essential parties.
Uploading and storing digital copies on a secure digital investment platform allows you and your colleagues to access, share and download sensitive files through one portal. Individual client profiles can be created, giving your clients permission to view and retrieve the information you’ve made available to them.
4. Secure client data
Data security and the necessity to comply with changing regulations are two of the biggest challenges for those advising on tax-efficient investments. GDPR made it even more important to protect client data and maintaining this information on spreadsheets no longer satisfies these rules. A data security breach could undermine your firm’s reputation and incur a significant fine.
So, how can you make your processes more robust and safeguard against future risks?
Using a secure cloud hosted investment platform to store your personal records, investment data and receive manager reporting updates will increase your security. When selecting a technology partner, ensure all data is encrypted and stored on secure servers, independent security tests are conducted and advanced security features such as two‐factor‐authentication can be enabled to maximise your security and firm protection.
Next steps
If you're looking for a solution to digitally manage your client’s tax-efficient and other alternative asset investments, view coinvestor.co.uk for more information and create your free account in a few minutes.