Workflow Sofware May Aid Investment Advisers
July 6, 2009
The 150-year sentence handed down last week to Ponzi king Bernie Madoff reminded the world yet again of how the investment advisory industry's less regulated and sometimes poor disclosure and transparency practices failed investors.
But now comes the industry overhaul, led by the plan announced last month by the Obama Administrations to implement a series of new rules that promise to demand greatly improved record keeping.
"From a regulatory standpoint, it's all going to be around disclosure and transparency - that's evident from the Obama Administration's recommendations - and especially reporting requirements for registered investment advisers will increase," said Matthew Bienfang, senior research director in Boston-based TowerGroup's brokerage and wealth management service.
Many of those requirements will likely lead investment firms to beef up their reporting systems with better or newer documentation management and workflow software. And a number of companies - including software companies NetDocuments, SpringCM, and Laserfiche, as well as brokerage and RIA clearing firms Fidelity Investments and Pershing - are now looking to serve those firms. They're targeting the new sweetspot - Midsize and smaller advisers - with new lower-cost software options or software packages that can be accessed over the Internet.
So What's New?
Document management solutions have been popular for at least 10 years and more recently workflow components have been added that automate the flow of documents among key departments and personnel. There are a number of big, traditional software companies offering products, including EMC, Open Text, and IBM's FileNet division.
However, the systems they offer can be too big and - with market watchers saying prices range upward of $50,000, plus annual seat licenses of $2,500-$3,500- expensive for many midsize and small investment firms, where it's common to find companies with less than 100 people.
And that has opened doors for companies like Laserfiche.
Xpyria Investment Advisors, which manages $500 million in assets for 140 customers, last summer deployed the Laserfiche document management platform.
Xpyria uses applications such as the Advent AXYS portfolio reporting system and software to aggregate information into reports customized for each client, a process that used to take four to five weeks before quarter-end. Laserfiche's software stores the documents in appropriate folders and enables them to flow to the appropriate staff for approval. "Now everyone knows immediately what's going on with everyone else in the office," said president and CEO Joseph Salpietro, adding the software has shaved two weeks off the reporting process.
Halbert Hargrove, an advisory firm managing $1.3 billion in assets, is also using a system from Laserfiche. It migrated to the document management system in 2003 from a FileNet product primarily for cost reasons.
"We didn't think Laserfiche would be as strong and robust, and we were surprised that it was, and affordable," said J.C. Abusaid, the firm's chief operating officer. "Everything we dreamed about doing with FileNet but involved paying its consultants, we did in six months with Laserfiche, and we did it ourselves."
Halbert Hargrove doesn't have staff devoted to IT, although two of its 29 employees, including 10 advisers, are technically savvy. They connected the system to the firm's existing Web server and its original customer relationship management software, through which advisers can access customer statements, notes, and other relevant documents.
