by Rebecca King
As an adviser, it can be helpful to learn from your peers-key tips on how they use technology or mistakes they've made that you can avoid. In August, in collaboration with ActiFi, FPA gathered feedback from 338 advisers on their use of compliance software, consultants and other compliance solutions.
Findings from this research show that advisers are generally satisfied with the compliance solution/electronic tool they currently use. The full research report, FPA-ActiFi Adviser Technology Reports: Compliance Edition, sponsored by TD Ameritrade Institutional, is available online at www.FPAnet.org/AdviserTechnologySeries.
Adviser Satisfaction With Compliance Solutions
Advisers overwhelmingly say that their compliance software/electronic tool is useful for all of the activities for which they use it. The software/electronic tool was more useful in developing the compliance policy manual and procedures for the practice than for any other activity. More than three-quarters of advisers who use a compliance software/electronic tool for an activity said it was useful. This suggests that advisers who do not currently use a compliance solution may want to consider adopting one.
In addition, the research found that advisers are satisfied with their compliance solution/electronic tool. In fact, no adviser reports being very dissatisfied, and only one in 27 are somewhat dissatisfied. See Exhibit 1.
Exhibit 1: Adviser Satisfaction with Compliance Software/Electronic Tools
Very satisfied: 42.7%
Somewhat satisfied: 39%
Neither satisfied or dissatisfied: 14.6%
Somewhat dissatisfied: 3.7%
Very dissatisfied: 0%
Advisers are also generally satisfied with the various support aspects and value of their compliance solution purchase. The area of least satisfaction is training. Therefore, if training on the use of the software is an important aspect for your practice, be sure to get a clear picture of the training offered and any associated costs. See Exhibit 2 for details on fellow adviser satisfaction with these support and value areas.
Exhibit 2: Percentage of Advisers Very/Somewhat Satisfied with Aspects of Compliance Solution/Electronic Tool
The value for the price: 61%
Business benefits (revenue, scalability, efficiency, productivity): 53.7%
Vendor/product support: 52.4%
Vendor/product training: 42.7%
Using Other Software for Compliance Activities
Advisers also use other software solutions, such as CRM or financial planning software, to assist with compliance functions. The percentage of advisers who use each of the different categories of software varies from 22 percent to 86 percent, and those who have the software frequently use it for compliance purposes. In fact, while financial planning software is used for compliance purposes less than any other software, more than one-third of advisers report using it for compliance activities.
So, for which compliance activities do advisers use these software solutions? They vary by the type of software, but the most common ones include providing necessary disclosure, ethics forms and other materials to clients, and maintaining documentation that they were received; and providing necessary information to complete annual forms or updates, as well as reminders to file them.
Advisers give this strategy of using existing software solutions to help with compliance/regulatory needs a positive rating, with two-thirds saying they are satisfied with using those software solutions to assist in that area.
Rebecca King is the manager of the FPA Research Center. Contact her at Rebecca.King@FPAnet.org.
Download the complete FPA-ActiFi Adviser Technology Reports: Compliance Edition online at www.FPAnet.org/AdviserTechnologySeries. In addition to key findings from adviser research, the full report includes vendor information and helpful insights on using software to assist with your compliance needs. FPA members receive this valuable report free of charge, courtesy of TD Ameritrade Institutional.
TD Ameritrade participated as a custodian respondent in the study. TD Ameritrade is separate and not affiliated with FPA or ActiFi and is not responsible for the policies or services of any third party. In no instance should the listing of a third party be construed as a recommendation or endorsement by TD Ameritrade.