servicing strategies | PLANADVISER November/December 2016

Cultivating Your Practice

By John Manganaro | November/December 2016

“First and foremost, straight-through processing is about connecting better and smarter with each client from the very beginning of the relationship—getting their digital profile set up within the firm’s systems immediately, not a week or a month after the relationship starts,” he says. “If you take a high-level look at what the Department of Labor [DOL] is doing to the industry today, it’s really all about transparency and improving the ability to connect with and service your client as best as you possibly can.”

Embrogno says the push for more connectivity and transparency does not just apply to individual clients—it is also about bringing disparate systems together to create a truly holistic approach to advice. Information must flow among all providers touching a client, and it must be brought together in an elegant way to provide the new level of reporting and transparency the DOL will require.

“The real point of all this thinking is to get advisers, broker/dealers [B/Ds] and other providers to a point of perfect, real-time processing,” Embrogno continues. “To make a rapid increase in scale possible, processing must be as efficient as possible, and get you to the lowest cost of operation possible. Perfect processing means you can electronically process any type of important information coming from a client, in real time—whether that’s a request to open a new account, or it’s a commission payment or it’s a simple communication with a client. It also means an unprecedented documentation capability.”

Embrogno expects that many firms over the next several years will move to implement what he refers to as “perfect processing,” wherein they will look to onboard new clients with a baseline of data already collected, to be keyed into the adviser’s systems immediately upon hire—potentially even drawing the data automatically from payroll or recordkeeping systems. Under this approach, he says, a firm would immediately and automatically be able to tell if a given client was going to need a best interest contract (BIC) exemption to be papered, for example, or what specific model or suite of products would likely fit the client best—and, perhaps most important, why that is the case.

“Image that, as you are bringing clients on board, you can also have mechanisms and technology validations in place that are able to parse out exactly what fees and expenses will be assessed in that account—and this can be automatically converted into a report to be shared with the investor,” Embrogno says. “Not only is this great from the fiduciary protection standpoint, but it’s going to be very easy for the adviser to be more consultative and to be able to very quickly pull the key information on a client.”

Like Sweet and Clark, Embrogno feels this type of evolution will naturally free up advisers to focus more on what they do best: “actually engaging with clients, discussing the long-term plan and building a coherent set of financial goals.”


  • As advisers spend only 20% of their time on investments, outsourcing this function so that they can concentrate on the client relationship many times is sense worthy of consideration.
  • Data shows that technology has enabled advisory practices to become more efficient, so the need to expand staff as assets grow may not be not as urgent as it was a decade ago.
  • Technologies on which advisers should rely on include investment management, customer relationship management, straight-through processing and videoconferencing.