Storing information and managing its storage is critical to a financial advisor’s behind-the-scenes success.
Fortunately, there are options available to advisors and their clients. One solution that has emerged within the past few years and is gaining traction within the advisory community is online document storage vaults.
“It’s a value-added service for clients and their advisors,” says Josh Bohlander, vice president of technology at Raymond James & Associates Inc. and the firm’s liaison with advisors. “It’s an easy way for them to share documents and collaborate securely online.”
Essentially, an online vault is a digital-storage mechanism with secure encryption accessible to clients, the client’s advisors, potentially advisors’ extended team of financial practitioners, as well as family members of the client.
“It allows a user to see all their financial documents in one place within the vault,” says Christian Cordoba, president and founder of California Retirement Advisors, a financial consulting and services firm in El Segundo, Calif., which has used vault technology for eight years.
Think of it as a safe deposit box. Rather than having essential documents stored at one brick-and-mortar location, clients can access them from anywhere as financial documents in one place within the vault as long as there is an Internet connection.
Typical documents that may be stored include client reports; investment and estate planning documents; tax, insurance and real estate documents; and travel information.
There are a number of third-party providers of online vault activity, including eMoney Advisor LLC, recently purchased by Fidelity Investments. EMoney Advisor remains an independent company.
One main attraction was eMoney Advisor’s collaborative features, according to a Fidelity spokeswoman.
Fidelity will be working closely with eMoney Advisor as it builds its next-generation technology platform.
Fidelity recently found that advisors who are using more technology, dubbed “eAdvisors,” had 40% more assets under management than their peers and are serving more Generation X and Y investors.
Raymond James has been using its vault technology in a test environment and plans to roll it out to its advisory community in the first quarter as a standard part of its technology, unlike Fidelity and other independent advisory firms, which have to subscribe to a third-party provider, Bohlander says.
Although online vaults are becoming more popular, they still aren’t widely used by advisors, says Cordoba, whose firm uses eMoney technology to power its myretirementorganizer.com for vault access.
The online vault’s relatively high cost, the technology’s subscription or contractual obligation, and the extra manpower it takes to operate it effectively could all inhibit its growth within the advisory community, he says.
They are best used with a dedicated staff member who can focus on that part of the business, Cordoba says.
“But once you spend the time on the front end, you can make significantly better use of your time,” he says. “In client meetings, for example, you can have more meaningful conversations about already updated technology.”
Bruce W. Fraser, a New York financial writer, contributes to Financial Planning and On Wall Street.
This story is part of a 30-day series on leading tech trends for advisors.