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The Less Paper Office. IFAs can't ignore paper, but they can be smarter about how they store it

These days compliance departments are much more relaxed about replacing paper with scanned documents. This is a boon to adviser businesses as scanning and electronically storing client records and documents is both efficient and cost effective. However, it is essential to have in place proper procedures and, in particular, to consider security i.e. are those procedures and your storing mechanisms fool proof? 

Scanning paper brings on a different set of hazards from keeping paper copies. If you rely 100% on paper then if you have a fire, although compliance would not be at all pleased, the paper has gone - although I have heard that some compliance firms insist on two sets of paper copies if there are no electronic versions. 

If you lose your scanned documents and you do not have an adequate copy, there is far less sympathy. So, it is essential to check your backup procedures, in particular by running a proper check, not just relying on other people to get it right. You need to see for yourself that you can recover all your documents easily and that they are easy to identify. 

Some real examples of where things have gone wrong when storing scanned documents into folders are as follows: 

  • Your backup firm stores your details incrementally, you have a tidy up where you rearrange files to look more accessible and delete some files, the incremental backup that you retrieve is now out of sync with your folders, making information retrieval more difficult. 
  • Your backups only go back a few months and you inadvertently delete a file but do not notice for a while. Most commercial storage firms do not keep backups beyond a certain date. 
  • You delegate backups to a third party that goes into administration or a key person dies without leaving details of access. (This seems unbelievable but as I said, these are real examples). 
  • You think you are backing up but you are actually backing up emptiness. 
  • The data is stored in folders on several PCs so there is no consistency and the documents may not be available to other colleagues, creating confusion and the potential problem of disjointed and incomplete information being recorded. 

My advice is that you should keep at least one complete (not incremental) backup each month to supplement the main backups and it is checked and maintained by you, so that you are in complete control of your overall data. You should use more than one media (e.g. more than one memory stick, hard disk, DVD etc) to keep these backups, preferably in separate places, to avoid the danger of theft, corruption, fire, etc.  By doing this you are at most one month out of date with your data and are assured of business continuity. 

You may decide to use an online back-up facility such as Google Apps. At first glance, this has many attractions. However, if you look at the price and service comparison chart of what you get for free, what you get for $5 and what you get for $10 per person per month you soon realise that to use Google Apps for an adviser business where you need to search for and reference documents compliantly then you need to buy the most expensive version. You have the added disadvantage of your dependency on the documents being stored out of your control with no backup coming back to you. Ideally, for peace of mind, you will need to setup your own backups to complement the service. 

I have a degree of cynicism as to just how Google could and may use your data - they have such powerful tools to interrogate, interpret, collate and market the information that is stored on their servers. Those in the financial services industry have a duty to ensure that any client details are not available to any outsiders. The main advantage of Google Apps is the powerful search engine, which is great to have but not essential for a Financial Adviser business if the documents are well indexed and can be exported for analysis. 

Another solution is to store all your documents into Document Management Software systems. However, these can cost more than Client Management Software (CMS) so why not use proprietary back office software that gives you the scanning functionality plus all the things that really make an adviser’s day easier to manage, like evaluations. You can incorporate all forms of communication, i.e. not just your scanned documents but your emails, faxes, voice recordings, notes, client reports, letters etc and link them to all the other details of the business.

This means that when you are looking at a client, you see all the associated information about the client and policies in one place and you can filter down by many options including what, when, who, etc. And your CMS can do so much more for the business because it is built with Financial Adviser workflows in mind. 

Some advantages of storing your documents into a CMS database structure rather than into folders include: 

  • The storage is better structured. 
  • Easy retrieval, you can search on many more criteria. 
  • All the data is together which ensures that all the data is backed up together. 
  • If the CMS is accessible through the Internet or on tablets, you can view and search the less paper office from any location. 

Documents are the core of any business and they must be easily found and accessible. The title of this article “The Less Paper Office” reflects the fact that in many cases it is easier to print so that you can read documents on paper, so paper cannot be ignored, but storing your documents electronically using a familiar system designed to satisfy Financial Advisers’ business requirements makes operational sense. 

Ann Dempster
Plum Software Ltd 


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Author: Ann Dempster
Posted: Saturday, September 29, 2012 | 4:30:26 PM

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