Jeff Panik, an Invest advisor at Community Bank of the South in Smyrna, Ga., knows something about leaps of faith—three years ago, he sent all his clients’ paperwork through the back of an industrial shredding truck. And while he had a knot in his stomach at the time, he hasn’t looked back since.
Back in 2008, Panik was facing a problem familiar to any successful advisor: “More clients meant more filing cabinets, and I was at the point of running out of room,” he says. Because the job is so security-sensitive, it all had to be safely locked away in Panik’s office.
Panik knew he was at capacity, and that as his business got bigger, his problem would only get worse. So he decided to go paperless at a cost of $95 per month.
Going that route is not without its challenges. “You have to set up folders and sub-folders for every client and you have to make sure every member of staff who uses the system is trained so it’s compliant,” he says. “You need procedures in place to make sure everyone knows what they’re doing.”
Panik had two assistants at the time and training took around three hours, which wasn’t too onerous. The real time-sap was scanning in every client’s documents, a process that took 30 days to complete. “I was still paranoid, so I kept the paper files for another two or three months before bringing the shredding truck in,” laughs Panik.
There are several document storage services on the market, but Panik uses Redtail, which has a relationship with his broker-dealer. He notes that “very few” of his peers are ditching paper, but the strategy is already paying dividends when it comes to servicing clients on the go.
“The challenge was that if a file was in my main location and I was at a different branch and my assistant wasn’t available, the client would have to wait until I got back,” he says. “Now, I can access any client’s files anywhere from my laptop.”
How did clients feel about Panik’s switch to paperless recordkeeping? “If you can explain that it’s fully secure, backed up and encrypted, they don’t mind,” he says. With paper files, “there’s always the fear people will break in and steal those files or you’ll lose them in a hurricane or a fire, but with electronic file storage you don’t have those problems.”
Losing those filing cabinets has been a boon to the feng shui of Panik’s office. In their place now sits a round table, where he meets with clients in a less formal setting than at his desk. And he has all their files at his fingertips. “It’s a lot easier to access their information and print out whatever they need,” he says.
The same goes for auditors. “The better organized you are, the better you can defend yourself because everything’s time stamped,” Panik says. “Paper isn’t going away, but this is a way to streamline from a compliance and organizational standpoint."