FEBRUARY 12, 2018 | ARTICLE | BY FUNDKEEPER TEAM |
Anybody who ever bought a new car has been there. You found your dream vehicle, took it for a spin, bonded with the sales guy and negotiated a sweetheart deal. He even threw in the deluxe floormats. You’re feeling great. Just one more step, your new buddy says: “Let me introduce you to Chuck, our finance manager, who will take you the rest of the way.” You are about to enter … the Paperwork Zone.
And just like that, your new-car euphoria disappears and is replaced by a mix of tedium and dread.
The Check-and-App Zone
Now consider a brand-new investor under the historic “check-and-app” framework for opening mutual fund accounts. They finally bit the bullet and engaged you as their financial advisor. They are feeling great and ready to get going. The two of you just spent an hour reviewing their needs and goals and put together a solid, fund-based plan: 60% equity (small-cap growth, mid-cap value, S&P 500 index and international) and 40% fixed income (core bonds and high yield).
Then you hand them a raft of applications—one for each fund—and ask whether they have plenty of checks in their checkbook. Or maybe you hand them your 12-page, FINRA-approved, new brokerage account form. Halfway through, they sheepishly ask: “What’s a ‘margin?’ Do I need to worry about that section of the application?”
With FundKeeper, we set out to create a better account opening experience for fund-only clients and a much more efficient workflow for independent broker dealers and registered reps.
Streamlined account opening from the rep’s perspective
Reps will appreciate the efficiencies FundKeeper seeks to create for their clients. Many reps are frustrated by the limited options for processing client mutual fund accounts. Leveraging the conventional brokerage model is often far too complex and more costly than necessary. And opening accounts directly with a multitude of mutual fund companies opens the door for numerous headaches and errors.
For one, Not In Good Order (NIGO) flags are all too common with the direct mutual fund process. Unfortunately, that means regular and possibly frustrating NIGO interactions between the rep and the back office, as well as the rep and their client.
The same goes for compliance suitability checks. Finding out after-the-fact from the compliance team that a particular mutual fund wasn’t approved or deemed appropriate for an investor is frustrating for reps. With FundKeeper, a menu of approved investment options is readily available so the rep can make an informed, appropriate investment selection from the get go.
With all the information about the investor and their fund choices consolidated on a single, electronic platform where compliance checks can be easily automated in a rules-based framework and with exceptions being highlighted for further investigation, the compliance process may be more efficient too. It also means that reps can open and fund new client accounts that same day.
Streamlined account opening from the client’s perspective
Fund-only clients can easily get tripped up or frustrated by complicated forms. FundKeeper’s straightforward account opening interface eliminates the manual paperwork from multiple mutual fund families for clients. It also presents a clean, electronic internet portal that’s branded by their brokerage firm (versus a mutual fund company or fund they’ve never heard of). Clients also only have to write a single check, which can be captured electronically instead of mailed, with the proceeds able to be invested in multiple funds, across fund families.
FundKeeper. A shiny new model for account opening. Let us know if you’d like to take it for a test drive.