Advisor Group’s eQuipt is a Quantum Leap in Onboarding Technology

Taking a page out of the robo-advisors’ playbook, Advisor Group has replaced their cumbersome, paper-based account opening process with one that is completely electronic and digitally advanced.  Christened “eQuipt”, it has advanced their platform to be among the top providers known for technical prowess such as Dynasty Financial, United Capital and HighTower.

Advisor Group is the country’s largest independent broker-dealer network with over 6,800 advisors affiliated with their four broker-dealers: FSC Securities based in Atlanta, GA, Royal Alliance based in Jersey City, NJ, SagePoint Financial based in Phoenix, AZ, and Woodbury Financial based in Oakdale, MN.  While the firm has had some digital account opening applications, this is the first deployment of an end-to-end account opening process that is completely digital, according to Matthew Schlueter, President, Advisor Group Wealth Management Solutions.

Advisors who have been part of the initial rollout of the new system have gushed that it is “game-changing technology,” Schlueter reported.  They made sure to consider all parties that are involved in onboarding activities and created a single digital flow for everyone, with the advisor driving the experience, he stated.

The system provides advisors with the flexibility to hand-off specific onboarding events to the client, collect profile and suitability information and then make recommendations based on that data. It allows advisors to be more agile by leveraging the latest technology to drive a great overall experience, Schlueter claimed.

If you aggregated all four firms, Advisor Group would be the second largest IBD in terms of number of advisors behind only LPL Financial.  One goal when designing eQuipt was to provide a robo-like experience for consumers with a self-directed account opening process.  A side benefit of digitizing the entire workflow was a 50% time saving over scanning, attaching, and mailing paper forms, Schlueter noted.  This reduces the common friction points and streamlines all activities from the consumer through the middle office, to the back office and all the way through to the custodian.

While most robo-advisors launched their platforms with end-to-end digital onboarding, the vast majority of RIAs and broker-dealers are still lagging behind and depend on the old logistics of printing and moving around stacks of paper.

Even the major vendors are playing catch-up with eliminating paperless processes. It wasn’t until just last September that Envestnet announced fully digital account opening for their Tamarac unit with two of the big four RIA custodians, Schwab and TD Ameritrade.

Pushing the Envelope

The old account opening process that eQuipt replaced involved navigating a myriad of systems including Salesforce, Client Central (Sungard CRM), DocuPace (document storage), Envestnet and Pershing NetX360 as well as printing out hard copies of all paperwork in order to open a new account.  This often took advisors more than an hour, assuming every form was filled out correctly the first time. It took longer if there were NIGOs or problems moving data between systems.

All of these different systems have their own data silos and need different subsets of information that is capture by the client onboarding process:

• Salesforce needs demographic and contact data;
• Envestnet needs fee-billing schedules, the proposal, and the output of the RTQ for portfolio model selection;
• Compliance needs suitability data;
• Pershing needs certain books and records data for accounts that Advisor Group introduces to them;

With almost $200 billion in assets under administration, Advisor Group has leverage with vendors that smaller firms lack. This enabled them to push both Envestnet, one of the largest provider of wealth management technology, and Pershing, the biggest custodian for broker-dealers, to create new APIs that were critical to their new account opening process, Schlueter explained.

The new APIs from Envestnet included the ability to query all custom portfolios that were created by the advisor (to populate the model portfolio selection) while those from Pershing allow clients to view their custodial account immediately after clicking the link to sign off on the account paperwork.  In the past, getting access to the custodial account view could take 24 hours or longer and required a different set of login credentials. Now the same credentials are persistent from the client portal all the way through to the custodian.

As I have written in the past, Envestnet and Pershing not only have a long relationship but have a number of different relationships, including partners, competitors and clients. Their relationship could be referred to as “frenemies” or “coopetition”, but needless to say, they have been forced to improve their relationship due to their mutual clients many of whom, like Advisor Group, are among the largest financial services firms in the country. Their clients agree since it just doesn’t make good business sense for your wealth management platform provider and your custodian to be at odds with each other.  (See How the Quovo Deal Validates Envestnet’s Vision for Yodlee)

Refining the Flow

In our consulting practice, one of our most important rules is “don’t rebuild bad processes with new technology”.  Advisor Group took this to heart and reviewed every question in the RTQ and new account data flows to see where they could optimize and streamline. Most wirehouses, full service firms and independent broker-dealers require around 100 fields to be filled out to onboard a new client, but Schlueter and his team cut it from 85 down to just 35 fields to onboard a new client (w/o dependents) onto their platform.

This more than 50% reduction in the number of fields in the RTQ and new account flow questions means less information that had to be gathered by advisors and less hassle for clients who had to provide it. Fewer fields also mean fewer mistakes and fewer NIGOs, which reduces the overall operation cost of doing business.

The RTQ and risk assessment process was built internally rather than using external software like Riskalyze, which is used by some of their advisors.  This choice was made to keep a consistent look and feel throughout the onboarding process.

eQuipt can not only open both brokerage and advisory accounts, but also supports multiple goals per client relationship and multiple accounts funding a single goal. This is a big differentiator when compared to other wealth management platforms, Schlueter explained. (See Stranger Things Are Happening to Financial Planning Software)

As part of their top to bottom process review, Advisor Group wanted to change the flow of how a consumer is onboarded, to be more in line with how an advisor traditionally starts a conversation with a client, makes a recommendation and then goes through the admin activities of funding and opening accounts.  In order to build a framework that was flexible enough, they partnered with IFS to implement their business process automation solution to handle the onboarding workflows in eQuipt.

The IFS New Account Opening (NAO) Solution allows the workflow be adjusted dynamically based on attributes from the applicant and/or the type of account being opened. For example, it can automatically skip the new client pages if an existing client is selected or update the account registration dynamically between qualified accounts and joint accounts, Schlueter noted.  (See The Secret Sauce in the Top 6 Client Onboarding Vendors)

According to their website, IFS clients also include LPL Financial, Ameriprise, Wells Fargo Advisors, and Envestnet.

Seamless Experience

One of the design philosophies that was adopted for eQuipt was the ability for advisors to start a process in one system and pickup in another without losing data or breaking workflow, Schlueter stated.  If an advisor was part of the way through opening a new account and realized they didn’t have all the information necessary to construct a portfolio recommendation, they could click the Invite Customer Button.  This will send an email to the customer or prospect with a hyperlink that takes them through a self-directed goal discovery process where they can select from four goals: income/accumulation, college savings, retirement savings, or general investing. The system evaluates their goal from an investment time horizon and risk classification perspective and then sends control back to advisor to continue the account opening process from that point.

In the recommendation section of the process, eQuipt filters the list of available model portfolios to only display those that meet the customer’s risk classification and account-level funding. Advisors have a long list of pre-built portfolios using investments from asset managers including Vanguard, BlackRock, Russel Investments, Envestnet PMC, Beacon Capital, Innealta Capital and Frontier Asset Management.

One departure that the IBD took that differs from the B2C robo-advisors is their decision not to use DocuSign for managing the eSignature process. Almost every robo-advisor we have reviewed uses DocuSign, which requires a separate set of user credentials. Instead, Advisor Group chose a lesser known vendor, Signix. Their software allows for an in-session signing experience, which means that the client is not forced to leave the broker-dealer website to go to a third party and enter a separate set of credentials. (See Mission: Impossible – Choosing the Right Digital Advice Vendor)

eQuipt will automatically combine all of the necessary documentation including the ADV, new account form, ACAT forms (if applicable), custodial paperwork and program documents into a super-bundle and then generate a link to email to the client that takes them back to the Advisor Group website for esigning, rather than going to the DocuSign website.

This was a bold decision to split from the pack, but based on the demo and how seamless it appears to the user, it looks as though Advisor Group made the right call.

Another aspect of new account opening that can throw a monkey wrench into a digital process is account transfers. They require use of the Automated Customer Account Transfer Service (ACATS) which is managed by the National Securities Clearing Corporation (NSCC). ACATS can include all securities held in an account (full) or only a subset (partial) and these can get tricky when it comes the creation and transmission of the digital envelop that is a wrapper for the esignature process.

In our consulting work, we have seen more than a few digital onboarding processes get choked up when handling ACATS when vendors promised support didn’t meet the broker-dealer requirements.  It’s the number one cause of NIGOs, according to Schlueter.

Schlueter assured us that eQuipt can handle both true ACATS (securities that settle through NSCC) as well as non-NSCC investments such as the liquidation of an annuity that might require a physical transfer form with a wet signature. In this case, the system prompts the advisor to upload an image of the brokerage statement that is routed internally to handle the transfer. A new account opening initiated by a consumer would only allow in-kind transfers to avoid issues where consumers might be confused by the partial ACATS process, he noted.

The eQuipt application is also available on mobile devices with a more guided experience for consumers. The mobile app includes remote check deposit to allow clients to fund their accounts electronically rather than mailing a check.

The 2019 roadmap for eQuipt includes support for corporate entity accounts (corporation) as well as integrating maintenance activities into the portal such as new investment recommendations, manager changes, and updating ACH instructions. All of these will tie back to consumer portal to handle all issues that could arise during the life of a client relationship.

Advisor Group eQuipt

The eQuipt system connects to and/or utilizes software from the following vendors:

• DocuPace – document storage
• Envestnet
• Fresh Consulting – UI/UX design
• IFS – workflow automation
• Pershing
• RSA – credentialing and multi-factor authentication
• Salesforce
• Signix
• Sungard