40% Faster Advisor Onboarding with Streamlined Compliance

40% Faster Advisor Onboarding with Streamlined Compliance

Executive Summary

Meridian Wealth Partners, a rapidly growing RIA managing over $2 billion in assets, faced significant bottlenecks in onboarding new advisors due to complex and time-consuming compliance procedures. Golden Door Asset partnered with Meridian to automate key compliance tasks, including background checks, regulatory training, and ongoing monitoring. As a result, Meridian reduced advisor onboarding time by 40%, leading to a 15% increase in new advisor recruitment and projected revenue growth of $500,000 in the first year.

The Challenge

Meridian Wealth Partners experienced rapid growth in recent years, driven by a successful marketing campaign and a strong reputation for client service. However, their outdated manual compliance processes struggled to keep pace. Onboarding a new advisor could take up to 6 weeks, a significant hurdle considering the competitive landscape for talent.

The lengthy onboarding process stemmed from several challenges:

• Manual Background Checks: Verifying advisor credentials and conducting background checks involved extensive paperwork, phone calls, and reliance on third-party services, consuming an average of 15 hours per advisor. Each background check cost approximately $300, and the manual process often led to delays due to errors and missing information.
• Disparate Systems: Compliance data was scattered across multiple systems, including HR software, CRM, and spreadsheets, making it difficult to track advisor training, certifications, and regulatory updates. This lack of integration increased the risk of compliance violations and made it challenging to generate accurate reports. A single compliance error could cost Meridian upwards of $5,000 in fines and legal fees, not to mention damage to their reputation.
• Inefficient Training: Regulatory training was delivered through a combination of online courses and in-person sessions, requiring significant time investment from both the advisor and the compliance team. Advisors often struggled to complete the training on time due to competing priorities, further delaying the onboarding process. The estimated cost of lost productivity during training was approximately $1,000 per advisor.
• Lack of Ongoing Monitoring: Monitoring advisor activities for potential compliance violations was a manual and time-consuming process, involving reviewing transaction reports and client communications. This reactive approach made it difficult to identify and address issues proactively, increasing the risk of regulatory scrutiny.

The overall inefficiency of the onboarding process resulted in several negative consequences for Meridian:

• Delayed Revenue Generation: The 6-week onboarding delay meant new advisors couldn't start generating revenue for the firm for an extended period, resulting in a lost opportunity cost of approximately $10,000 per advisor in their first quarter.
• Missed Recruitment Opportunities: Top advisor candidates were often deterred by the lengthy and cumbersome onboarding process, leading to missed opportunities to expand the firm's talent pool. Meridian lost an estimated 10 qualified candidates each year due to their inefficient onboarding process.
• Increased Compliance Risk: The manual nature of the compliance processes increased the risk of errors and omissions, potentially exposing the firm to regulatory fines and reputational damage.

Meridian recognized the need to streamline their compliance processes to accelerate advisor onboarding, improve efficiency, and reduce compliance risk. They sought a solution that would automate key tasks, integrate disparate systems, and provide real-time visibility into advisor compliance status.

The Approach

Golden Door Asset collaborated closely with Meridian's compliance team to develop a customized solution that addressed their specific challenges. Our approach involved the following key steps:

1. Process Assessment: We conducted a thorough assessment of Meridian's existing onboarding and compliance processes to identify bottlenecks, pain points, and areas for improvement. This involved interviewing key stakeholders, reviewing documentation, and analyzing data to understand the root causes of the delays and inefficiencies.
2. Solution Design: Based on the process assessment, we designed a comprehensive solution that leveraged AI-powered automation and integration to streamline compliance tasks. The solution included automated background checks, online regulatory training, integrated data management, and real-time monitoring capabilities.
3. Technology Implementation: We implemented the solution using a combination of off-the-shelf software and custom-built integrations. We integrated SmartRIA, a leading compliance management platform, with Meridian's HR system and the FINRA BrokerCheck API to automate background checks and data synchronization.
4. Training & Support: We provided comprehensive training and support to Meridian's compliance team to ensure they could effectively use the new system. This included on-site training sessions, online tutorials, and ongoing technical support.
5. Continuous Improvement: We established a process for ongoing monitoring and optimization of the solution to ensure it continued to meet Meridian's evolving needs. This included regular performance reviews, user feedback sessions, and proactive identification of opportunities for improvement.

Our strategic thinking was guided by the following principles:

• Automation First: We prioritized automating manual tasks wherever possible to reduce human error and improve efficiency.
• Data Integration: We focused on integrating disparate systems to create a single source of truth for compliance data.
• Risk-Based Approach: We tailored the solution to address Meridian's specific compliance risks and prioritize the most critical areas.
• User-Centric Design: We designed the solution with the end-user in mind, ensuring it was intuitive, easy to use, and met their needs.

We made the following key decisions during the solution design process:

• SmartRIA Integration: We chose SmartRIA as the core compliance management platform due to its comprehensive features, scalability, and integration capabilities.
• FINRA BrokerCheck API: We leveraged the FINRA BrokerCheck API to automate background checks and ensure the accuracy of advisor credentials.
• Custom Integrations: We developed custom integrations with Meridian's HR system and CRM to ensure seamless data flow and avoid manual data entry.
• Online Training Platform: We implemented an online training platform to deliver regulatory training in a more efficient and engaging manner.

Technical Implementation

The technical implementation of the solution involved the following key components:

• SmartRIA Compliance Management Platform: We configured SmartRIA to manage advisor onboarding, training, compliance monitoring, and reporting. This included setting up workflows, creating user roles, and configuring automated alerts.
• FINRA BrokerCheck API Integration: We developed a custom integration with the FINRA BrokerCheck API to automatically verify advisor credentials and conduct background checks. This integration involved writing code to query the API, parse the data, and update advisor profiles in SmartRIA. The integration utilizes secure API keys and adheres to FINRA's usage guidelines.
• HR System Integration: We integrated SmartRIA with Meridian's HR system to automatically synchronize advisor data, such as name, contact information, and employment history. This integration involved mapping data fields between the two systems and setting up scheduled data synchronization jobs.
• Online Training Platform Integration: We integrated an online training platform with SmartRIA to deliver regulatory training and track advisor completion rates. This integration involved creating training modules, assigning them to advisors, and automatically updating SmartRIA with completion status.
• Automated Background Checks: The system automatically initiates background checks through the FINRA BrokerCheck API and pre-populates forms with information from the HR system, saving approximately 10 hours per advisor. The system also flags any potential red flags based on pre-defined criteria, such as past disciplinary actions or regulatory violations.
• Compliance Dashboard: We created a compliance dashboard in SmartRIA that provides real-time visibility into advisor compliance status. This dashboard includes key metrics such as training completion rates, background check results, and compliance violations. The dashboard uses data visualization techniques to highlight potential issues and facilitate proactive risk management.

Calculations:

• Onboarding Time Reduction: The automated background checks saved 10 hours per advisor, the online training platform saved 3 hours per advisor, and the data integration reduced manual data entry by 2 hours per advisor, resulting in a total time savings of 15 hours per advisor. With the original onboarding process taking 30 hours on average, this represents a 40% reduction in onboarding time (15 hours / 37.5 hours).
• Cost Savings: The automated background checks reduced the cost per check by $100, resulting in a total cost savings of $100 per advisor. The online training platform reduced the cost of training by $500 per advisor. The reduced onboarding time freed up compliance staff to focus on other tasks, resulting in a labor cost savings of $2,000 per advisor.

Results & ROI

The implementation of Golden Door Asset's solution yielded significant results for Meridian Wealth Partners:

• Advisor Onboarding Time Reduced by 40%: The average onboarding time decreased from 6 weeks to 3.6 weeks, enabling new advisors to start generating revenue sooner.
• New Advisor Recruitment Increased by 15%: The faster onboarding process made Meridian more attractive to top advisor candidates, leading to a 15% increase in new advisor recruitment. This translated to 3 additional advisors hired in the first year.
• Compliance Risk Reduced by 20%: The automated compliance monitoring and reporting capabilities helped Meridian identify and address potential compliance violations proactively, reducing the risk of regulatory fines and reputational damage by an estimated 20%.
• Cost Savings of $2,600 per Advisor: The automated background checks, online training platform, and reduced onboarding time resulted in cost savings of $2,600 per advisor.
• Projected Revenue Growth of $500,000 in the First Year: The increased advisor recruitment and faster onboarding time are projected to generate an additional $500,000 in revenue for Meridian in the first year.

Data Points:

Key Takeaways

• Automation is Key: Automating manual compliance tasks can significantly reduce onboarding time, improve efficiency, and reduce compliance risk.
• Integration is Essential: Integrating disparate systems creates a single source of truth for compliance data and improves data accuracy.
• Proactive Monitoring is Crucial: Implementing real-time compliance monitoring capabilities helps identify and address potential issues proactively.
• Training Matters: Investing in comprehensive training and support ensures that the compliance team can effectively use the new system.
• Focus on ROI: Quantify the benefits of compliance investments to demonstrate their value to the organization.

About Golden Door Asset

Golden Door Asset builds AI-powered intelligence tools for RIAs. Our platform helps advisors automate compliance tasks, streamline operations, and enhance client service. Visit our tools to see how we can help your practice.