Sponsored by Laserfiche
This is the final installment in “A Path to a Billion Dollar Firm,” a three-part series that explores the five phases of Laserfiche’s Digital Transformation Model. In parts one and two, we learned about several advisory firms’ efforts to move their practices into the digital age and to position themselves for sustained growth. Part three addresses the fifth and final phase in the Digital Transformation Model, in which advisors leverage predictive analytics to gain a deeper understanding of their business and a better perspective on how to grow.
Consider this scenario: A financial advisor who owns his own independent practice is mapping out his firm’s short- and long-term growth plans. He wants to know how quickly he can grow the firm’s assets under management, and how many clients it will take to reach that goal. But he lacks data about growth trends and client acquisitions, so he’s limited to back-of-the-envelope calculations. With such limited insight, he can only guess at a reasonable growth rate—and he knows that his growth plans are built on a shaky foundation.
What if this advisor could avoid the guessing games? What if instead he could easily gather the data he needed to forecast growth in assets, client expansion and other key metrics with confidence? It would be a game changer, says Linda Ding, director of strategic marketing at Laserfiche. “This is the kind of information you really need if you’re planning to take your company to the next level,” she says.
Fortunately, many tools can help advisors collect and use meaningful data simply and efficiently. In particular, workflow automation and document management software can help provide the data advisors need to perform key operations such as forecasting client growth and identifying inefficient internal processes. “This is the promised land,” says Tim Welsh, president and founder of Nexus Strategy, a wealth management consulting firm. “But you can’t get there if your data is hiding in a file cabinet. You need data that is accessible, and you need data that can be leveraged for business intelligence.”
Learning the Ropes
As advisors increase their technology fluency, they are able to use the tools for more powerful initiatives. Advisors using Laserfiche’s workflow automation and document management platform follow an educational five-phase Digital Transformation Model. The model begins simply, by guiding advisors through the process of digitizing and organizing documents and information. Next, advisors build processes that automate complex tasks such as gathering compliance data from client files.
Ultimately, advisors can leverage the digital data at their fingertips to provide critical insights into the firm’s growth patterns and prospects for future growth. “In Phase 5, you can start extracting real business intelligence from your data,” says Ding. “For instance, an advisor can use predictive analytics to measure the likelihood of adding a certain number of new clients within the next 30 days, or to forecast the firm’s growth as new clients come on board.”
| Phase 5: Transform Processes |
| The fifth and final phase of Laserfiche’s Digital Transformation Model focuses on driving innovation by leveraging sophisticated tools such as predictive analytics. In turn, firms can gain deeper insights into their growth patterns and identify ways to transform processes that aren’t aligned with business needs. The result: greater agility, with processes built to support growth and other organizational goals. |
Breaking Down Silos
The five phases of the Digital Transformation Model aim to help advisors broaden their perspective on the health of their practice and its potential for growth. Ding says advisors often are too entrenched in day-to-day operations to take a long-term view of their firm’s growth prospects.
To fully understand a practice’s long-term growth potential, an advisor needs to gauge whether the firm’s operations and processes align properly with its business needs. Take new client recruitment: Welsh notes that legacy onboarding processes—in which gathering and signing all the relevant paperwork may take weeks or even months—no longer work for advisors. “Robo-advisors can onboard a client instantaneously,” he says. “When clients see that speed, they won’t put up with an onboarding process that takes three months.” Document management systems can speed up and streamline that process by automating manual tasks and eliminating the time-consuming practice of advisors passing paper documents back and forth.
Digital documents and smart workflow automation processes can help advisors keep pace with a changing industry, says Welsh. What’s more, tools such as these are not just for big financial institutions—the increasing availability of cloud-based technologies make them accessible to smaller firms as well. “There’s a huge opportunity for smaller firms to adopt these technologies today and be miles and miles ahead of the bigger firms,” he says. “The paradigm has been reversed—innovation is happening on the fringes, and that’s helping to fuel the rapid growth of RIAs.”
The five phases of Laserfiche’s Digital Transformation Model provide a systematic approach to integrating new technologies into an advisory practice. The early stages represent the first steps into the world of workflow automation and digital document storage. By the final phase, advisors are prepared to make use of the full range of data available to them. “This level of business intelligence can help advisors make more realistic predictions for future performance, and can help make sure that every part of the firm is on the same page when it comes to achieving business objectives,” says Ding. “It’s a truly organization-wide digital transformation.”
